The Main Stages of Conducting a Real Estate Valuation
The real estate valuation process follows a well-structured system of consecutive stages, beginning before any opinion is issued and ending with record retention for many years. Below is a detailed explanation of these stages.
First: Before Conducting the Valuation
The valuer focuses on four main areas:
1. Defining the Scope of Work
This includes:
Identity and independence of the valuer
Purpose of the valuation
Type of value
Methodology used
2. Proper Planning
This includes:
Understanding work requirements
Evaluating available information sources
3. Determining Fees
This includes:
Estimating working hours
Profit margin
Responsibility and liability
4. Completing the Contracting Process
This is done through:
A formally signed agreement
Clarifying the details and conditions of the process
Second: During the Valuation Process
The process goes through four steps:
1. Collecting Basic Data
This includes:
The asset being valued
Ownership rights
Market conditions
2. Data Analysis
This is carried out through:
Studying strengths
Studying weaknesses
Identifying available opportunities
3. Estimating the Value
This is based on:
Analyzed information
Market conditions
Purpose of the valuation
4. Preparing the Final Report
The report includes:
Description of the asset
Concluded value
Reasons and justifications
Methods used
Third: After Conducting the Valuation
The valuer performs the following:
Preparing files
Retaining records for ten years in accordance with the accredited valuers’ regulations
Preparing a completion letter according to the client’s purpose
Providing a disclaimer for any use that violates the stated conditions
The Standard Field Valuation Process
The process passes through seven stages:
Receiving instructions and agreeing on terms
Office review
Site inspection
Market investigation processes
Analysis and valuation
Report writing
Archiving and file retention