Industry Glossary

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Comparable Data

Data generally used in a valuation analysis to develop value estimates; comparable data relate to properties that have characteristics similar to those of the property being valued (the subject property). Such data include sale prices, rents, income and expenses, and market-derived capitalisation and yield/discount rates.

Comparable Sales Method (Market or Direct Market Comparison Method)

A valuation methodology using sales prices or rentals of assets similar to the subject asset as a basis for estimating its market value for sale or rent. The underlying assumption is that an investor will pay no more for a property than he or she would have to pay for a similar property of comparable utility. Also called Sales Comparison Approach.

Compliance Statement

An affirmative statement attesting the fact that the Valuer has followed the ethical and professional requirements of the IVS Code of Conduct in performing the assignment. In some States, a Compliance Statement is known as Certification of Value. IVS 3, 5.1.10 and deal with the contents of a compliance statement.

Market Value

The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion.

The concept of Market Value reflects the collective perceptions and actions of a market and is the basis for valuing most resources in market-based economies. The professionally derived Market Value is an objective valuation of identified ownership rights to specific property as of a given date. See also Highest and Best Use.

Professional Property Valuer

A person who possesses necessary qualifications, ability, and experience to estimate property value for a diversity of purposes including transactions involving transfers of property ownership, property considered as collateral; to secure loans and mortgages, property subject to litigation or pending settlement on taxes, and property treated as fixed assets in financial reporting. A Professional Property Valuer may also possess the specific expertise to perform valuations of other categories of property, i.e., personal property, businesses, and financial interests. See also Independent Valuer, Valuer.

Property Company

A holding company in real property.