In its simplest form, valuation may be describe as ' the analytical process followed by the valuer', or even an experienced investor considering property for investment, to occupy or for speculation.
This process includes:
- Defining the particular property to be valued
- Identifying the particular right or interest to be valued, for example the freehold interest or the sub-lessee's interest; or the compensation business or property owners would claim in the even of their properties are compulsorily acquired
- Date of the valuation - this is especially crucial in land acquisition proceeding, since valuation will be based on the date the notice to acquire is published, in accordance with the provisions of the Land Acquisition Act 1960, and not necessarily when the title transferred or when physical possession of the acquired land is taken. This date is important in the even of litigation that can last many years, during which the value of the property can appreciate or depreciate.
- The purpose and objective for the valuation. In most cases, it is to determine the ' market value ' but valuation may also be carried out to determine the property's insurance value, its value to a business or the value to a purchaser with special interest.
- The appropriate method of valuation most suitable for the type of asset to be valued. This must be in keeping with the objective of the exercise.
- Limiting conditions, if any, which must be stated in the valuation report.
