Are you looking to sell or buy a property? Are you worried that your property will not be valued accurately? A real estate valuation report is the solution as it is an essential document, as it provides an accurate analysis of the value of the real estate and determines its real market value. 

In this article, we will explain the importance of the form and specifications of a real estate valuation report according to the specifications approved by the Saudi Authority of Saudi Valuers. 

The importance of a real estate valuation report in making your decision 

Real estate valuation plays an important role in many real estate transactions as it determines the market value without exaggeration and guarantees the rights of both the seller and the buyer. 

The real estate valuation report form is an official document from a valuer accredited by the Saudi Authority of Accredited Valuers and this report includes an analysis based on many factors including the location of the property, its condition, the size of the property, and other specifications that make you make better decisions and the importance of a real estate valuation report is as follows: 

• Market value: 

The real estate report determines the market value of the real estate based on an accurate analysis by international standards, so the evaluation is based on factors specific to the property and the real estate market, which makes it reliable and reliable. 

• Investment decisions:

 A real estate valuation report contributes to making better investment decisions, whether buying, selling, or otherwise, as it determines the valuation based on the condition of the property and the state of the market 

• Legal and financial processes:

A real estate valuation report supports various financial and legal procedures, including mortgages, inheritance distribution, insurance, taxes, and dispute resolution. It provides a detailed, certified assessment to protect the rights of all parties.

The real estate valuation report is a way to facilitate all real estate transactions and preserve the rights of all parties in addition to its great role in real estate investment, A’ain is one of the best real estate valuation companies in Riyadh and provides a detailed report according to the specifications of the Saudi Authority for Accredited Valuers. 

Form and specifications of the real estate valuation report  

Article (28/16) of the executive regulations of the Accredited Valuers System issued by Ministerial Decision No. 107 issued on 28/1/1445 AH, in implementation of the provisions of Article 15 of the system, stipulates that the accredited valuer who holds a licence to practise the profession must comply with the minimum requirements for submitting the valuation report form and the contract for valuation services, as prepared by the standards of the Saudi Authority of accredited Valuers. 

Therefore, the real estate report form must include specific specifications and the valuer can add other elements according to the condition of the real estate unless included in the approved form by the rules and regulations governing the valuation profession, and a real estate valuation report conforms to the specifications of the Authority and includes the following: 

Introduction:  This page includes the name of the valuer who carried out the valuation or its affiliated company 

The first requirement: is the executive summary, which includes the executive elements, including: 

• Owner’s identity: The name of the owner, whether a person, an organisation or a group of people 
• The identity of the valuer and the nature of their work: The valuer’s name and identity, whether a person, a legal entity or a group of persons, and the nature of the valuer’s work and any limitations in the inspection, enquiry or analysis of the valuation assignment.
• Destination of the report: The entity that will use the report must be identified and their needs must be clearly defined and not confused with the identity of the client
• The date of the valuation: The date on which the final opinion of value was issued, which is different from the date of issuing the valuation and may coincide or precede it, and if the asset being valued was inspected on another date, this should be mentioned in the report.
• Determine and present the real estate specifications: in terms of (address, location, type of property, land area, building area, age of the property)
• Purpose of the valuation: The purpose of the appraisal is clearly stated in the report so that it is not used for any other purposes, in addition to mentioning the extent to which the purpose of the appraisal affects the value 
• Valuation currency: The currency used in the report is in case the valuation is for assets of multiple countries or the transaction is conducted in different currencies.
• Basis of value: The basis of value should be determined based on the terms and purpose of the valuation and the basis of value used and its source should be defined and stated in the report. 
• Value assumption: The valuer shall document in the report the value assumption and specify whether it is the highest and best use, current use, orderly liquidation, or forced sale 
• Information the valuer depends on: The valuer’s report should contain the information he relied on The report should contain the information and its source on which the valuer depended, and the scope of his research
• Assumptions: All assumptions, both general and specific to the work scope, are identified and recorded in the assessment report and supported by evidence. 
• Type of the report: The report must be described in terms of format and method of delivery. The type of valuation does not affect whether it is narrative or abbreviated, but it must include all the essential requirements as per the Authority’s specifications 
• Restrictions on use and publication: There are no restrictions on use, publication, distribution and inclusion in the evaluation, taking into account the provisions of Article (18) of the Authority’s Regulations. 
• International evaluation standards: It should be emphasised that the assessment has been carried out by the international assessment standards approved by the Authority according to the time of issuing the assessment 
• Intended use: The intended use of the report should be stated and the contractual terms between the client and the assessor should clarify the client’s need to prepare the assessment 
• The method of evaluation: There are three methods used by the valuer (income method, cost method, and market method) The valuer must state which method he/she used, the reasons for using it, and its impact on the value 
• Valuation methods: The valuation method(s) used should be mentioned, which is the methodology and calculations used by the valuer to derive the basis of the value assigned to the asset, as according to international standards there are a number of valuation methods under each method and the tools and inputs must be available to apply the appropriate valuation method
• Key inputs used: All inputs relied upon by the valuer should be stated in the report based on (method(s) used, nature of assets, assets being valued).
• Conclusion of value and the main reasons for the conclusion reached: If more than one valuation method is used, the valuer should not take average values and apply the average method in IAS 105 to arrive at the original value
• The date of the report: The date the report was issued, which is different from the valuation date 

The second requirement: Systemic elements: The detailed requirements include: 

• Valuer name, number, and date of license: On each page of the report, the valuer’s name and date of license, which is different from the membership number 
• Signature: This is the valuer’s special mark to signify his/her identity, not just a barcode 
• Filing code: This is the code for the report in an evaluation platform and must be included in the report before submission 
• Membership category: The type and category of membership granted to the assessor authorized by the Authority. 
• The type of branch in which the assessor is authorized to practice the profession: This includes the branches of valuation (real estate, economic establishments, machinery, and equipment).
• Data of the participants in the preparation of the report: The report must include the data of all participants in the preparation of the report, the type of their memberships, and an explanation of their role in the evaluation with their signatures 
• Independence: The extent to which the valuer is independent of the asset being valued is stated.

These are the basic items that must be available in any real estate valuation report according to the specifications of the Saudi Authority of Accredited Valuers, and the real estate report contributes to many investment decisions if done by the conditions of the Authority, and Aain is one of the real estate valuation companies that provide a detailed report that serves your investment decisions. 

Real estate valuation plays a crucial role in investment decisions, serving as a key guarantee before proceeding. Aain, a leading real estate valuation company in Riyadh, provides reports that meet international evaluation standards and specifications.

If you are looking for an accredited real estate valuer who provides you with an accurate real estate valuation report, do not hesitate to contact Aain and enjoy an experience with a group of professional valuers.