Why is the initial valuation required? Or what is the difference between initial valuation and full-scope valuation?
There are 2 main types of property valuation which are ‘initial valuation’ and ‘full-scope valuation’. For the initial valuation, it is suitable for those who would like to know the value of the property and asset that is not yet the stage where the valuation report is required for the transaction with other parties. Instead, it will be for the preparation stage for the transaction, for example, to be used for analyzing and summarizing some internal aspects of the business such as determining the purchase price or preliminary analysis of possibilities. As for the principle of the initial valuation, the valuation will be conducted within the office which means that the valuers do not need to go to the property to conduct the survey, certify the condition of the property’s location, and certify document of rights. For your information, all this information will be provided and certified by the clients. Therefore, this is different compared to the full-scope valuation since a proper survey and inspection at the property together with the certification of the document of right as well. In conclusion, the initial valuation is a very convenient, fast, and safe cost when it comes to a basic level of valuation.
Procedures for requesting an initial appraisal price
(1) Clients must prepare must send the information to the valuers for consideration such as details of title deeds, location of land, deed no., land area, list of buildings and improvements within the land, number of buildings, building size/area, utilization type, and etc. (2) Valuers inform the result together with the market information in that area whether the ‘initial valuation’ can be applied in this case or not, the scope of service, and let the customer proceed with the payment. (3) Clients must fill out the form together with sending the documents which are a copy of title deed, photos of internal and external of the property, and other documents, if any or as requested by the valuers. (4) Valuers may request an interview with regard to the additional information of property from the clients in case there is any question. (5) Valuers summarize the property appraisal price as a company certificate and send it to the customer to be used in their business internally in the beginning. (6) If the clients have used and analyzed the initial report and would like to bring it to apply for a transaction externally with other parties, please let us know so that we will issue a full valuation report. However, valuers will need to survey and inspect the property and if there is any difference compared to the previous information that is received from the customer, the price will need to be adjusted according to the survey.
Is there any difference between an opportunity of an ‘initial’ and ‘full-scope’ valuation?
The answer is there are different opportunities for some reasons since the information regarding the property and assets will be provided and certified by the customers themselves according to the required form as well as additional interviews from the valuers. Therefore, this information can turn out to be different for example when surveying the property and found that the information is not matched with the one that was provided by the clients earlier such as public utilities, land level, width, building style, building size in square meters, building age, and maintenance condition. In this case, in order to reduce the mistake, the customer must always provide true information that is accurate.
The price difference between an ‘initial’ and ‘full-scope’ valuation.
The service fee will be a cheap or safe cost when it comes to an initial valuation compared to a full-scope valuation. For your information, the service fee for an initial valuation will be around 40-50 percent of the full-scope valuation.
Is there any restriction regarding the use of an initial valuation report?
According to the purposes of the initial valuation, the property survey & inspection will not be required to conduct as the property information will be certified and provided by the customers. Therefore, the utilization of an initial valuation report will be only for internal use within the business which cannot be brought out for an external transaction with other parties. In case you wish to, please get back to us and we will issue a full-scope valuation report.
What do you have to do if you would like to have a full-scope valuation report
If clients have already analyzed the initial valuation report and wish to use the report for an external transaction with other parties, please contact us for an issue of the full-scope report. However, please note that our valuers will have to conduct a property survey & inspection and if we spot any differences compared to what we were told by the clients, an adjustment with regard to the price might have to be made as final. Last but not least, the request of full-scope reports within 90 days after initial reports are issued, there will be special privileges such as a special rate which are only the remaining proportion, transportation cost, and inspection of document of right for certification.
Contents that are included in the valuation report?
The valuation report for land and building real estate according to the standard contains: (1) Details of land’s document of right, (2) Details of land and building conditions. (3) Buildings appraisal list and indoor living space. (4) Market comparison data used to appraise. (5) Appraised value analysis method. (6) Valuation assumption, valuer’s comments, conditions, and restrictions. (7) Market value summary report certified by a licensed key valuer alongside the signature of the authorized directors of Prospec Appraisal Company Limited. (8) Documentation for property location plan as well as market data location. (9) Property photos. (10) Building floor plan (if any) (11) Copy of title deed. (12) Documents that are related to the valuation provided by clients. (13) Other supporting documents from the Lands Office or other government agencies.
Can the clients obtain the appraised value from the valuers immediately after the survey?
For the property appraised value, there is a process in collecting data in many sources. For your information, visiting and surveying the property site is just a part of it that must be used to combine with the company internal database together with using an in-depth price analysis model and who are responsible for making decisions and give approval to the price in the form of committees. Therefore, it is not possible for the valuers to provide any information regarding the price to the clients as the information received from the survey must be gathered to process in the office in order to summarize the appraised value. In addition, the person who will be authorized and entitled to provide such information is a marketing officer who is looking after that specific customer. In the case of the valuers or surveyors have visited the property site and informed the appraised value to the clients is considered as a risk caused by the wrong performance for the employees. If customers do not feel comfortable with this, please kindly inform the company immediately.
Can credit customers of financial institutions request for a valuation report directly from the company?
Presently, the regulation has not yet been officially announced by the Bank of Thailand in disclosing price information or reports directly to the customers to be able to submit to other institutions. Therefore, traders need to obtain a valuation summary or request for a report from the institutions where the customer applied for the loan. In this case, please note it is not a duty for the company to reveal the information or deliver the report directly to the clients except in the case that customers contact the company directly without coming through any financial institutions.
How long can the valuation report be used for an internal transaction?
Usually, the valuation report is able to be utilized within 6 months starting when the report has begun unless it has been specified to be something else in the report due to a period of changes in property conditions, environment, and the market structure that may change. Therefore, if the said period is expired and you would like to use the valuation report for transactions, please contact us back so that we will reissue the new one with the certified value once again.
Whom the valuation report can be applied to use in a transaction?
Property and asset valuation report is a type of report that states the limitation of responsibility according to the person named in the report which is quite similar to purchasing a car insurance policy that limits the responsibility of the driver that must be specified and affects the insurance premium, same as the valuation report that the name of the who will be using the transaction must always be specified for example applying for the loan with Krung Thai Bank, the institution will be specified as a reference in the report. In case the client would like to use the report with other banking institutions, he/she must notify and request for changing the company’s purpose which there will be an additional fee in order to do this. For your information, if the period is still within the scope of not more than 6 months, the work can be conducted right away. However, if exceeding that given period, it will be considered that the survey and inspection must be reconducted which the service fee will depend on the content that is generated.
What are the documents required if you would like to apply for a valuation request?
For property and assets in general, if it is vacant land, the document required will be a document of right in the form of title deed with all pages. On the other hand, for land and buildings, we will require an additional building plan to be used in calculating the utilized area for building valuation. Other additional documents can be requested during an interviewing session with our marketing officer or valuer according to the purpose of valuation such as servitude entrance and exit, construction permit, business license and etc. Therefore, clients must prepare all these stated documents to be ready upon request.
What can you do if you cannot find the building plan?
For a type of property which is land and buildings are required to have a building plan to be used as a reference for building size and area. However, if the clients do not have the building plan, our valuers will have to recreate it by measuring the size at the property together with making a sketch which will definitely cause more time. Last but not least, please note that there will be an additional fee for this.