How is property valued?

A property valuation is a professional process: agree the purpose and scope, review and inspect the property as required, analyse market evidence, select suitable methods and document the opinion of value.

1. Purpose and scope

Identify the client and intended users, purpose, valuation date, basis of value, limits of the assignment and relevant assumptions.

2. Information and inspection

Review property information and inspect as the scope requires to establish the location, use, condition and value-relevant characteristics. Documents may include title information, permits, plans, leases and income or expense records.

3. Market evidence

Analyse relevant transactions and listings, locations, areas and uses. Consider comparability, differences affecting value and the reliability of each source.

4. Appropriate valuation methods

The market, income or cost approach may be used, alone or in combination, where supported by the property characteristics, assignment purpose and evidence.

5. Reconcile the results

Review each method's relevance and input reliability before forming a professional opinion consistent with the agreed basis of value.

6. Issue the report

Document the scope, property, information, assumptions, methods, analysis, conclusion and required professional disclosures.

Valuing property in Riyadh

The same professional process applies, with attention to the exact location, permitted use, surrounding roads, planning characteristics, supply and demand and relevant local comparables.

Is a general price per square metre enough?

No. Properties in the same area can differ in access, shape, size, use, building age and condition, rental income and the dates of market evidence. Appropriate comparables and adjustments are needed.

Compare the valuation approaches or read about price and market value.