Specialists: evaluation reports issued by the resident to its clients should include the result of fulfilling its obligations

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During a workshop organized by Asharqia Chamber, specialists said that evaluation reports issued by the resident to its clients should include the result of fulfilling its obligations.

During a workshop organized by Asharqia Chamber entitled, "Professional Reading of Real Estate Evaluation Reports" on Sunday, March 4, 2018, experts in the real estate sector discussed several aspects of the evaluation. They talked about the importance of evaluation, the resident's obligations and the approved evaluation criteria.

During the workshop, which was conducted by Mohammed al-Subhi (a member of the National Committee of the Council of Saudi Chambers), the accredited trainer and a member of the Saudi Commission for Accredited Residents, Mohammed Al-Hindi, reviewed the evaluation reports. Al-Hindi revised the evaluation reports as the document issued by the resident to its clients including the result of the evaluation, meeting the resident's obligations, and complying with the approved evaluation criteria. He explained the difference between price, cost, and value. As the price means the actual amount of the trade, the cost is the amount required for the acquisition or production, and the value is the estimate of the potential amount achieved in the market.

Regarding the meaning of the market value, Al-Hindi said it has two types. The first is the estimated amount on which the asset should be exchanged at the valuation date between a willing buyer and a willing seller in a neutral transaction after appropriate marketing. It is where each party acts on the basis of knowledge and prudence without coercion. Moreover, the second type of value can be called liquidation value, which is reasonably collectable from the sale of a property within a limited time frame.

On the most important types of real estate value, Al-Hindi said that the first type is the investment value, the value of the property from the perspective of a specific investor depending on the set of objectives and criteria for the investor. The investment value may be higher or lower than market value. The second type is the private value, which is the value of a property linked physically or functionally or economically to another property or the value of a property to a buyer with a special interest. The third type is the complementary value, which is an additional value arising from the merger of two or more real estate rights. It represents a specific case of private value.​