Valuation reports may be required for various reasons. Such requests can be varied, complex and numerous but each purpose could be easily identified, analysed and tackled expertly by an Estate Surveyor and Valuer who has been exposed and thoroughly schooled in the art of valuation. Requests for Valuation report could be made for the following purposes:
- Mortgage: When a client is seeking for a loan in commercial banks, he may require his property to be offered as collateral security for the loan.
- Insurance: When a client wants to protect his life savings particularly in landed properties against fire, he will have to take an insurance policy to cover such future losses.
- Probate: When the estates of dead relations are to be valued for estate duty to enable the dependants obtain letter of administration.
- Going concern: When any operating business venture of peculiar nature is transferred either by sale or otherwise, it requires the Estate Valuer to advise on its capital value.
- Rating: When the client’s property would have to be assessed for taxation called tenement rates.
- Pre-investment analysis or feasibility and viability studies: Where the client wants forecasts of financial returns from an investment. He wants to be sure of the practicability of the project and good economic returns.
- Sales and purchases or assignments: Clients wanting to be guided in their negotiations for sale, purchases so that the best price could be obtained on the properties.
- Compensation claims: Clients whose properties have been acquired must be adequately compensated since they cannot successfully challenge the power of the government to acquire their property.
- Balance sheet purposes: When operating companies want to update the book values of all their assets.
- Shares in properties: When two jointly or generally own properties require valuation of assets to determine the values of individual shares particularly at times when one or more partners want to pull out.
- Etc
The special features of each purpose are considered from the point of view of the method of valuation; basis of valuation; general precautions to be taken in preparing the report and arriving at valuation figures. According to the Appraisal Institute of Canada (2008), all valuation reports should contain the following basic information:
- the estimate of value
- the effective date of the appraisal
- the certification and signature
- the purpose of the appraisal
- the qualifying conditions
- the condition of the neighbourhood
- an identification of the property and its ownership
- an analysis and interpretation of the data and the assumptions made
- the processing of the data by one or more of the three approaches to value
- other descriptive support material such as maps, plans, charts, photographs, etc.
