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The RICS Valuation Professional Standards 2014 defines Market Value as “The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.”
HIGHEST AND BEST USE:
The use of an asset that maximizes its productivity and that is possible, legally permissible and financially feasible.
A supposition taken to be true. It involves facts, conditions or situations affecting the subject of, or approach to, a valuation that, by agreement, do not need to be verified by the valuer as part of the valuation process. Typically, an assumption is made where specific investigation by the valuer is not required in order to prove that something is true.
An estimation of the age of a property that is based on the amount of observed deterioration and obsolescence it has sustained, which may be different from its chronological age. If a building has had better than average maintenance, its effective age may be less than the actual age; if there has been inadequate maintenance, it may be greater.
That loss in value experienced by a structure as a result of negative environmental forces outside the boundaries of the property. Also known as environmental obsolescence or economic obsolescence.
Impairment of functional capacity or efficiency. Functional obsolescence reflects the loss in value brought about by such factors as defects, deficiencies or super adequacies that affect the property item itself or its relation with other items comprising a larger property.
A title not subject to reasonable doubt or suspicion of invalidity in the mind of a reasonable, intelligent person; one which a prudent person guided by competent legal advice would be willing to accept and purchase at a market value.
REMAINING ECONOMIC LIFE:
An estimation of the number of years remaining in the economic life of the structure or structural component, as of the date of the valuation. In part, it is a function of the attitudes and reactions of typical buyers in the market, and in part a function of the market reactions to competitive properties on the market.
A private agreement that restricts the use and occupancy of real estate that is part of a conveyance and is binding on all subsequent purchasers.
An assumption that either assumes facts that differ from the actual facts existing at the valuation date or that would not be made by a typical market participant in a transaction on the valuation date.
A property that is rarely, if ever, sold in the market, except by way of a sale of the business or entity of which it is part, due to the uniqueness arising from its specialised nature and design, its configuration, size, location or otherwise.ion or otherwise.