Practice Briefing Valuations for secured lending: the problem of restricted marketing periods

Chris Thorne

Journal of Property Investment & Finance, 2023, vol. 41, issue 3, 333-340

Abstract: Purpose - The aim of this practice briefing is to provide clarity on property valuations provided for secured lending. The principal basis of valuation is market value but there is confusion on when and where it is appropriate or inappropriate to provide a valuation with an assumption of a restricted marketing period, sometimes referred to as a “forced sale”. This practice briefing examines the nature of the problem and steps which a valuer can take to provide advice which is consistent with the valuation standards. Design/methodology/approach - This practice briefing is an overview of the role of valuation standards when providing valuations for secured lending and specifically what to do when asked for a value with an assumed restricted marketing period. Findings - This briefing is a review of valuation standards and practice. Practical implications - The role of the practising valuer, when providing valuations for secured lending, is to provide a valuation to aid and underpin the lender in assessing the risk attached to the loan. This briefing considers the provision of valuations in practice. Originality/value - This provides guidance on how to undertake valuations for secured lending.

Keywords: Market value; Restricted marketing period; Forced sales; Worth; Valuation standards; Comparable evidence; Secured lending (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:jpif-02-2023-0008

DOI: 10.1108/JPIF-02-2023-0008

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