Market comparison
Comparing the property against evidence from similar properties, adjusting for the differences that matter: location, area, condition, date. The most-used approach where genuinely comparable evidence exists.
Valuation Methodology
The point of a methodology is that the conclusion can be understood and discussed — not simply a figure you are asked to take on trust.
The stages
How a value is built, step by step
- 01
Establish the purpose and scope
Before looking at the property, these are settled: the identity of the property, who is instructing, the purpose of the valuation, the institution the report will go to, the required valuation date, and the scope of the work.
These are not formalities. A report for a settlement between heirs and a report for bank security can concern the same property and differ in depth, in form, and even in the basis adopted.
- 02
Identify the information and documents needed
The documents requested are those that establish the property's identity, characteristics and legal position. The list is not the same for every file; it varies with property type and purpose.
Documents required - 03
Inspection
Where an inspection forms part of the work, the property's physical characteristics, its surroundings and the factors bearing on value are recorded: actual condition, build quality, access, noise, outlook, current use, and everything that shows on site and on no document.
An inspection is not a quick visit to take photographs. It is a data-gathering stage, and its findings feed the analysis rather than sitting in an appendix.
- 04
Analysing use
For some properties — land and development sites especially — it is essential to understand both the current use and the use that is possible within the planning and technical constraints.
Land used as a yard while its zoning permits residential development is not worth what a yard is worth. The gap between existing use and best possible use is a central element of value.
- 05
Choosing the approach
Depending on the property and the quality of the data, different approaches may apply:
- 06
Reaching the conclusion
Where more than one approach is used, the results are compared and weighted according to the reliability of the data and how well each approach fits the case.
The conclusion is not an average of the figures. The weighting is a reasoned decision: an approach built on strong evidence carries more than one resting on wider assumptions.
- 07
The report
The report normally contains: definition of the instruction, description of the property, sources and documents, inspection findings, the methodology used and why, the analysis, the conclusion, and the assumptions and limitations.
Valuation approaches
Choosing the approach
No approach is applied mechanically. The choice is a professional judgement resting on the purpose, the property type and the quality of the available data — and it is justified inside the report.
Income approach
Suited to income-producing property, analysing the revenue, the risk and the expected return. Its accuracy rests on the quality of the income data and how realistic the occupancy assumptions are.
Cost approach
Useful for certain buildings and assets where estimating replacement or reinstatement cost is the appropriate route, allowing for depreciation and obsolescence. Particularly useful where comparables are scarce, as with specialised facilities.
Scope and limits
What the methodology does, and does not, do
What it does is produce an opinion whose reasoning can be traced and whose every step can be questioned.
The valuation date
- Every value is tied to a date.
- If the market moves, the property is altered, or its planning status changes, the value may need updating.
- A report issued two years ago is not wrong; it is correct as at its date, and may no longer describe today.
What the methodology does not do
- It does not produce a guaranteed sale price.
- It does not bind a bank or a court to its conclusion.
- And it does not remove the need for legal or engineering due diligence where a file calls for those.
Tell me the property, the region and why the value is needed.
The file is reviewed first: documents required, scope of work, expected timeframe. No fee is quoted before that.