UNIT 1 : WRITING A REPORT : PREREQUISITES

INTRODUCTION :
Reports can be broadly classified as technical reports and non-technical
reports. Each of these reports has distinct characteristics, styles, requirements as
also definite purposes.
A report on technical matter in general and report on valuation of an
immovable properly in particular, is initiated with instructions given by a client in
response to which the task of writing a report is undertaken. Instructions given by the
client define the scope and limitations of the task to be performed. It is therefore
necessary to precisely understand the nature and extent of instructions. Further
acceptance of such instructions by a professional valuer creates a legal contract
casting certain responsibilities and obligations on the valuer. It is therefore essential
to understand the importance of the terms and conditions of such a contract.
Further in order to carry out efficiently and satisfactorily the responsibilities
cast on him by such contract, it is necessary for a valuer to master, in addition to
technical expertise, certain attitudes and skills for producing a good report.
This unit emphasizes the importance of the normal terms and conditions of a
contract formed by giving instructions by the client and acceptance of such
instructions by the valuer as also the attitudes and skills required to be developed for
writing an effective report.

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 STRUCTURE OF THE UNIT – 1
1.0 OBJECTIVE
1.1 TYPES OF REPORTS
1.2 PURPOSE OF TECHNICAL REPORT
1.3 CONTRACT WITH THE CLIENT.
1.3.1 The Client
1.3.2 Formation of Contract
1.3.3 Disclosure
1.3.4 Instructions
1.3.5 Preliminary inspection
1.3.6 Fees
1.3.7 Caveats : Confidentiality
Physical
Information
Miscellaneous
Specialised
Conclusion
1.4 THE PROCESS
1.5 ATTITUDES AND SKILLS
1.5.1 General
1.5.2 Direct relation with Client
1.5.3 Accountability
1.5.4 Technical Skill
1.5.5 Professional Integrity
1.5.6 Communicative Skill
1.6 CONCLUSION

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1.0 OBJECTIVE :
By the end of this unit it is intended that the student will learn about the
preliminaries required to be gone through prior to writing a report as well as
the attitudes and skills required to be developed for writing a good and
effective report. He will specifically learn about –

• Types of Reports – Technical and Non-Technical

• Purpose of Technical Reports.

• Care to be taken in dealing with the client.

• Terms and conditions of contract with the client including fees and
caveats.

• Process of writing a report.

• Attitudes and skills required for writing a report.

1.1 TYPES OF REPORTS :

1.1.1 General –
Any narration giving information about any event, or describing any fact
or any object is a report. It is basically a means of communication between
two persons, one presenting a report communicating information and the
other, the recipient who usually initiates the report.
1.1.2 A Written Report –
A report may be either oral or written. An oral report can be altered
modified or even denied subsequently at any time. A written report, on the
other hand, becomes a statement binding on the person reporting and
therefore becomes a document. No changes or modifications can be made
subsequently in a written report except with a reasonable and valid
justification. In writing a report, it is therefore necessary to personally verify
the information, data and facts and it is also necessary to choose words with
utmost care with understanding of their correct and precise meaning.
1.1.3 Technical and Non. Technical Reports -
Written reports can be classified in two broad categories viz. Technical
reports and Nontechnical reports. Nontechnical reports such as news paper or
media reports give information, usually without expressing any opinion or
advice which is left for the reader to infer. The main purpose in writing a
technical report, on the other hand, is the practical exercise of technical
expertise on behalf of a client. Technical reports therefore give all the

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 necessary information and data, analyse the same and express definite
opinion and also render specific advice if and when asked for.
1.1.4 Technical Reports -
Technical reports, among other reports, include structural or survey
reports, estate management reports, reports on valuation of real estate and
plant and machinery which are related to immovable properties. The purpose
of these reports is to inform the client or reader enabling him to take decisions
regarding management of financial affairs concerning his property. In writing a
technical report it is necessary to put into words in best possible manner the
information and data together with its analysis and the opinion which the client
is seeking. In addition to sound technical expertise therefore, it is necessary to
acquire and develop the skill of expressing facts and opinion in the best
possible manner. Since important decisions depend on the information and
opinion given in the report, the opinion and advice should not be expressed in
ambiguous words confusing the client and should not be worded so
unskillfully as to convey impression or meaning different than that intended.
1.2 PURPOSES OF TECHNICAL REPORT :
1.2.1 A technical report initiates with a client. A client desires to know about
physical and financial conditions of his property with a view to manage his
problems and seeks opinion and advance from an expert. In real estate a
client may require a report on (i) Structural conditions of his property and
buildings or (ii) Management of his estate or (iii) Valuation of properties for
various purposes.
1.2.2 In the case of a report on structural conditions the client may need to
know about stability and safety of a structure and services, any defects
therein, present condition of maintenance and repairs, immediate repairs
required to ensure safety of the property or complete pulling down and
rebuilding along with financial requirements etc.
1.2.3 In a report regarding management of his estate, the client may like to
know about general physical and financial status of each of the properties and
buildings comprised in his estate, terms and conditions on which they are
occupied and used, their potential use, whether it would be advisable to
renew leases on new terms and conditions or to dispose off some of the
properties etc. etc.
1.2.4 In a report on valuation of properties the client may desire to know fair
market value of his properties for various purposes like purchase for
occupation or investment, sale, mortgage for obtaining loan from financial
institutions, letting on lease including renewal of lease, municipal or Govt.
taxation, insurance etc. and seeks advice from a valuer in such matters.

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1.2.5 The client intends to take decisions regarding management of his
practical and financial matters on the basis of information, opinion and advice
given in such reports. Each information given, each opinion expressed and
each advice rendered in a report is therefore extremely important since it
influences further action resulting in benefit or loss to the client.
1.3 CONTRACT WITH THE CLIENT -
1.3.1 The client is important in three ways. Firstly, he is the source of
instructions i.e. instructions are given by him thereby creating and defining the
job. Secondly, he is the receiver of the report with opinion and advice on the
basis of which he takes further action regarding management of practical and
financial matters related to his property. Thirdly, he pays the fees for
performing the task and presenting report as per instructions given by him.
1.3.2 Formation of Contract
A client coming across a problem or a certain situation approaches a
valuer for his report. It requires performing certain task on the part of a valuer
according to instructions given by the client. Whenever instructions are given
by the client orally or on telephone it is always essential to get them confirmed
in writing by keeping a detailed note covering all the aspects or points of
instructions and getting such note duly confirmed, in writing, from the client
before taking any further action on such instructions. When instructions are
received from the client in writing, receipt thereof should be immediately
acknowledged by writing a letter addressed to the client. Similarly acceptance
or otherwise of instructions received should be communicated by writing a
letter addressed and delivered to the client.
Instructions given by a client form an offer and acceptance thereof
creates a ‘Contract’ which becomes legally binding in all respects on both the
parties. Since giving instructions and acceptance of instructions form a legal
contract enforceable at law, all instructions and acceptance thereof, forming
terms and conditions of such contract should be precise, specific, clear and
specified in unambiguous words and terms. The terms and conditions of
contract include (i) instructions given by a client and accepted by a valuer
(ii) terms and conditions regarding preliminary inspection etc. (iii) fees and
caveats (iv) miscellaneous.
A professional valuer while submitting his report and giving opinion and
advice to a client is virtually selling his services. On acceptance of instructions
a valuer essentially becomes the agent of his client acting on his behalf in the
matters which are technically important to the client. It is therefore most
important and implied condition of a contract, formed by giving and accepting
instructions, that a valuer shall carry out the required services with reasonable

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 care and skill as would be expected from a reasonably competent
professional valuer.
1.3.3 Disclosure –
Prior to or while communicating acceptance of instructions i.e. prior to
entering into a contract with a client, it is essential for a valuer, according to
professional ethics, to disclose any interest he or any member of his staff has,
directly or indirectly, either in the property to be valued or in the owner
occupier or any other person interested in the property. If he or any member
of his staff has such interest, it is advisable that he should prima – facie refuse
to undertake the work. The valuer accepting the instructions and undertaking
a work should perform the task without any bias and should carry out the work
with all the professional integrity.
1.3.4 Instructions -
The instructions given by a client identify and define the task as well as
its limitations. The instructions for a valuation report will normally cover
1) The purpose of valuation e.g. market value, for purchase, sale, lease or
for taxation, mortgage etc.
2) The date of valuation i.e. the material date.
3) The basis of valuation e.g. a) Open market value. b) Forced sale or
distress value. c) Depreciated reproduction or replacement cost,
especially in cases of properties which are rarely sold in the market due
to their specialized nature.
4) The interest in the property to be valued.
5) The general form and details to be included in the written report.
Instructions in this respect may or may not be given and the form and
details to be included in a report are often left to the discretion of the
valuer.
6) The time table of work i.e. the date(s) of inspection(s), dates of giving
preliminary report and final report, date of issuing valuation certificate
etc.
7) Caveats and Fees
In the case of complex and /or complicated task the process of giving
and receiving instructions may be in two stages, (i) a preliminary
inspection, discussion with the client and initial study of documents and
then (ii) drafting of detailed instructions and caveats and estimating
realistic fees.

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 The purpose of valuation, the material date of valuation, interest to be
valued and the basis of valuation identify the task to be performed and also
define the same. Instructions in respect of these matters are usually contained
in a few sentences. It is necessary to distinguish between the ‘basis’ of
valuation and ‘method’ of valuation to be adopted in estimating value of a
property. The ‘basis’ of valuation specify the kind or type of value such as
open market value, distress sale value, depreciated reproduction or
replacement cost etc. etc. The ‘method’ of valuation denotes the methodology
for or approach to valuation e.g. income approach, market approach, cost
approach etc. by which value is to be estimated. The method of valuation to
be adopted for estimating value is often left to the judgement and discretion of
a valuer and no instructions are usually given in this respect.
1.3.5 Preliminary Inspection :
On receipt of initial instructions it may not be possible to accept or
confirm instructions in detail without making enquiries about various aspects,
especially in the case of extensive properties, complex valuation tasks etc. It
is always advisable to carry out preliminary inspection of the property to be
valued and its surroundings. Such preliminary inspection will also enable a
valuer to identify characteristic of the locality in which the property is situated
and sources of information and quality of information available.
The preliminary inspection will help in making arrangements to obtain
comparable sales and rentals. It will also broadly reveal physical condition of
the property the type of detail inspection required probable time and staff
required for completing the jobs and whether specialist consultant will be
required to be engaged for reporting on services and other special aspects
etc.
The preliminary inspection will also provide opportunity to have
informal discussion with the client, occupiers, other persons interested if any,
leading to much vital information which may alert a valuer about the details of
caveats required, the enquiries to be made with local authorities and other
statutory authorities, boundary disputes, if any, history about the use of
property from time to time etc. It will also help in estimating fees to be charged
on realistic basis taking into consideration the work involved time and staff
required, possible difficulties in carrying out the work and resources required
to complete the work in time.
1.3.6 Fees
In accepting instructions the parties to such contract, i.e. a client and a
professional, will also come to agreement about the fees along with the other
terms and conditions. Basically a professional valuer charges fees

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 commensurate with the time and energy spent by him and by his staff which
also includes proportionate part of time and energy spent for acquiring
technical knowledge and experience for performing the task.
Generally there are three different approaches for charging fees viz. (1)
Ad. Valorum Scale i.e. charging fees at certain percentage of estimated value
(2) Quantum meruit based on time or time measured basis and (3)
Contingency or ad-hoc basis after. (a) taking into consideration possible
difficulties in completing the task, time or working hours required, salaries of
staff, remuneration to owner or partners, overhead charges etc. etc. but
(b) without detailed calculations thereof. Some times actual expenses
required for completing the job i.e. ‘Out of Pocket’ expenses are included in
the fees charged on the above basis. Usually however such ‘Out of Pocket’
expenses are not included in fees and recovered in addition to fees charged.
It is therefore necessary to specify whether fees are inclusive or exclusive of
such ‘Out of Pocket’ expenses.
1.3.7 Caveats :
Caveats are essential part of instructions setting limits to the extent of
contract between the parties. Caveats are especially regarding (a)
confidentiality (b) physical (c) information (d) miscellaneous and (e) special
circumstances. Some such limitations may be revealed or can be anticipated
during the preliminary inspection, and may be generally discussed with the
client, while some other limitations may become known while performing the
task. Caveats are usually mentioned in a report at one place, but can also be
stated in the relevant paragraphs in a report.
Confidentiality:
In giving and accepting instructions a contract has been created
whereby certain duty is owned by a professional to a client. It is necessary to
make the extent of such liability clear and limited to the client only. While
writing a report it must be borne in mind as to how the data and information in
a report will be used especially when such data and information is passed on
to solicitors or third parties. In order to limit the liabilities it should be stated in
the report that “The report is confidential to the client for specific purpose to
which it relates. It may be disclosed to other professional advisors assisting
the client in respect of that purpose only but the client shall not disclose the
report to any other person”. It should also be clearly stated that “No
responsibility can be accepted to any third party in respect of whole or part of
the report.”
Further considering the eventuality of litigations in respect of the
subject matter of valuation it is advisable to include a clause in the report that

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“The valuer does not agree to any appearance or giving testimony / evidence
in any court, any hearing or any other proceedings by reason of rendering this
report unless prior arrangements have been made in that respect.”
Physical:
A detailed inspection of the property to be valued is a ‘must’ for a
valuer. However even after carrying out the most searching and
comprehensive site inspection and investigations latent defects i.e. defects
which cannot be normally revealed even after through search of record and
site inspection, will remain hidden. A valuer can be further protected by stating
that no investigations were possible for latent defects if any.
In case of structural surveys being carried out, its limitations such as
difficulties in access to roof, voids in floors, difficulties in investigating
foundations and wood work etc. should be clearly stated.
In case where a reasonably competent professional valuer should have
known from the age and type of construction that there is likelihood of latent
defects, then the client should be advised to make more detailed investigation
and analysis. Same thing holds good in respect of services like plumbing,
electrification etc. especially when concealed.
Information:
In carrying out the work as per instructions various types of data and
information are required to be collected from various sources. While data and
information regarding physical condition of properties, location and situation is
collected at the time of site inspection, the data regarding property market
conditions and economic conditions is collected from Govt. records, enquiries
during the site inspection and also from data published in various journals and
other publications like census books, economic journals etc. All such data
should be verified and ascertained and only such data and information which
has been personally verified by a valuer should be included in the report.
The data regarding instances of sale collected from the office of the
Registrar / Sub Registrar, Land Records Dept. should be verified during site
inspection, preferably by interviewing the vendors or purchasers or witnesses
to the documents. The data regarding rentals is usually collected by
interviewing landlords or lessees / tenants. In carrying out work the client,
owners, occupiers, other persons interested etc. supply information during site
inspection either voluntarily or otherwise and some times even try to mislead.
All such information and its quality should be personally verified and
ascertained and a valuer should avoid getting mislead. The information from
primary sources including vendors or purchasers, which carries authority
should be included in a report. In all circumstances it needs to be stated in a

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report that “In carrying out the work information has been obtained from public
records and also collected from concerned individuals during site inspection.
Such information is considered to be correct and reliable”.
Further it is advisable to quote the source of information such as public
records, census reports, publications, journals etc. in a report. Any
information, if attributed to its source, creates no liability for a valuer unless it
is so erroneous or misleading which a reasonably competent professional is
expected to realise.
Any property or its use in contravention of any statutory requirements
or otherwise, any statutory notice served etc. is matters which usually affect
value of a property. Necessary enquiries can be made with the Local Planning
Authority or Local Municipal and Govt. authorities, and copies of consents,
licenses, certificates, permissions etc. can be obtained to reduce the scale of
caveats.
Normally interpretation of documents of title such as relevant deeds,
leases and tenancies, planning permissions etc. is the responsibility of a
lawyer. Usually however a valuer interprets legal and statutory documents on
the basis of his academic and professional education relating to various
aspects of land laws. He is however not held responsible for finer points of
law and in cases involving finer points of law, a client may be clearly advised
to seek legal opinion.
Miscellaneous:
In valuing a number of properties in a portfolio it is necessary to make
clear whether properties have been valued independently or as a group where
they together enjoy certain benefits which would not be enjoyed separately.
It may also be necessary to state in a report (i) whether the cost of
acquisition or disposal (e.g. agent’s commission, stamp duty etc) is allowed or
not in the estimated value. (ii) whether any allowance for any liability to
taxation, which arise on account of disposing off a property, is made in
estimating its value or otherwise and (iii) in case of a flat / plot in a co-
operative housing society or apartment association, transfer fee payable, if
any, is allowed or not.
Specialiesd:
Some times it becomes necessary to continue or renew particular
licenses for certain types of specialized users for which necessary charges
are required to be paid. In such cases this fact should be clearly stated in a
report.

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 Further clients’ attention should be invited to defects, if any, in
maintenance and repairs of buildings and / or services and such other
particular circumstances, if any, and if it is not possible for a valuer to estimate
cost of immediate repairs or cost of making good the defects a client should
be advised to ascertain such costs.
Conslusion:
The main purpose of caveats seem to be (i) to prevent liabilities to third
parties and misuse of a report by the client or other persons (ii) to limit the
responsibility, of a valuer in respect of quality of information supplied by
others as well as for finer points of law and (iii) the task being limitless, to set
limitations to the task. The limits to be established by caveats however, must
be relevant to the client’s needs and practical in terms of the task that can be
undertaken by a reasonably competent valuer otherwise it will be of little or no
benefit to the client. By pointing out the limitations of the report in certain
specific matters the caveats, in general also guard the client against
misinterpretation of the report and thereby getting mislead. A reasonably
qualified and experienced professional valuer, in fact, needs no other
safeguard than that provided by his professional integrity and honesty.
1.4 THE PROCESS
A technical report on structural survey estate management or valuation
is often initiated by instructions from the client. The process of preparation of
a report follows the process of valuation and involves following steps.
1) Indentifying the Task and objectives -
On receipt of instructions from the client it is necessary. (i) to identify
the problem, (ii) to define the purpose and objective of a report and (iii)
to grasp the essential points involved.
2) Defining Scope and Limitations and Adapting Methodology -
The task is then determined by defining the scope and limitations of a
report and suitable methodology is adopted.
3) Collection of Data -
Identification of the problem, defining the purpose of a report and
determination of the task leads to the type and quantum of data
required to be collected by inspection of site / property, by carrying out
enquiries and also from secondary sources such as Govt. and public
records, published documents, journals and publications etc.

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 4) Analysis of Data -
Systematic and logical analysis of the information and data collected,
indicating the process of reasoning is the most important step in the
process of preparing a report. Such analysis requires application of
hard earned expertise to a particular problem.
5) Conclusion and Opinion -
Systematic analysis of data and information, alongwith logical
reasoning leads to conclusion, forming opinion and deciding about the
advice to be given, whenever called for.
The result of the process is then communicated to the client in
the form of either oral or mostly written report. The main purpose of the
report is to communicate opinion to the client enabling him to take
decisions regarding management of his financial affairs. The opinion
therefore should be expressed in clear and unambiguous terms and in
a convincing manner.
1.5 ATTITUDES and SKILLS
1.5.1 General –
It is necessary to develop certain attitudes and skills for producing
efficient and effective report. A report written without acquiring and developing
any of these attitudes and skills would not be a good, practical and useful
report.
1.5.2 Direct Relation with the Client:
A valuer or a professional writing a report must have a clear, precise
and perfect understanding of the problem faced by the client for which he is
seeking expert professional opinion and advice. This is the basic requirement
for producing a better and practical technical report. It is therefore necessary
to establish and maintain direct contact and relation with the client with a view
not only to have clear and precise understanding of his problem but also to
get the doubts cleared and difficulties duly resolved which may arise from time
to time while performing the task.
1.5.3 Accountability:
A written report duly signed acts as a formal record and becomes a
document. While writing a report, it is therefore necessary to bear in mind that
every information, every piece of data and every word written in the report
should be such as to stand the judicial scrutiny in the court of law. All the
information and data given in a report should therefore be factual and first
hand (except data from secondary sources) and should not be ‘hearsay’

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 evidence. A high degree of accountability is thus cast on the person writing a
report, and emphasis should be on disclosure of what has been done (scope)
and what has not been (or could not be) done (limitations). No attempt should
be made to hide any information or data, however unfavorable it may be to
the interest of the client. It is also absolutely necessary to verify personally, all
the information and data before it is included in a report.
1.5.4 Technical Skill:
In order to produce a good technical report it is primarily essential to
acquire technical skill by intellectual and practical training in the particular field
of study. Acquiring qualification, competence as well as the post qualification
training and experience are necessary for acquiring technical skill. Sound
technical knowledge and experience have no substitute.
1.5.5 Professional Integrity :
A high degree of detachment with the client or a person interested in
the property as also with the property to be valued, is another prerequisite for
an unbiased and balanced report. At the same time perfect involvement in the
problem or the task along with integrity in exercising professional judgement
on behalf of a client is also required for a sound technical report. A person
writing a repot should always bear in mind his responsibility for maintaining
competence and integrity to the profession, keeping profession above the
client.
1.5.6 Communicative Skill :
Report writing is basically a technique primarily concerned with ‘HOW’
to communicate rather than ‘WHAT’ to communicate though ‘What’ to
communicate is also important. It is absolutely essential to develop an
original and analytical approach to arrive at solutions to the problems as
well as to acquire and constantly improve communicating skills. One may
have sound technical knowledge and experience but it may not be of any
practical use if he is unable to present information, data and analysis thereof
and to express his opinion and advice in an effective and convincing manner.
On the other hand, one may have acquired skill of communication but his
opinion and advice may be misleading and of no practical use if the same is
not based on sound technical knowledge, experience and analytical
approach. Technical knowledge and experience and good communicative skill
are thus complementary to each other and not substitutes for one another.
One is incomplete and of no practical use without the other.

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1.6. CONCLUSION
The scope of this study material is mainly limited to writing reports
relating to Real Estate such as report on valuation of various types of
properties and for various purposes. It is basically presumed that the person
writing a valuation report has already acquired necessary technical knowledge
and experience in the filed of valuation, and has developed a sound analytical
mind. The thrust is therefore mainly on developing a good and effective
communicative skill. Once an inquisitive and analytical mind is committed,
with enthusiasm, to the task coupled with good and effective communicative
skill, better quality report is bound to be obtained.
**************
Exercise

1) What care you would take in general, in accepting instructions from a client
and entering into a contract with him.
Explain caveat of confidentiality and its necessity.
2) What are the attitudes and skills required for writing a good report.
3) Comment on “Technical skill and communicative skill are complementary to
each other”.

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 UNIT 2 : ESSENTIAL QUALITIES OF A REPORT

INTRODUCTION:
The valuation process and the process of writing valuation report are two
distinctly different processes. The purpose of valuation process, which is the process
of forming opinion, is to find out a solution to a problem i.e. to estimate market value
or some other value required or to reach at some conclusion concerning real estate
etc. The purpose of valuation report, which is the process of reporting or
communicating opinion, is to present the process of valuation i.e. to communicate
the data, information, reasoning and the opinion and / or advice. Good report writing
requires logical presentation which makes it obligatory that the process of valuation
is completed before writing of a report begins.
A valuer who is an expert in technical aspects is required to communicate the
result of valuation process effectively in his valuation reports. Writing valuation report
may be difficult due to several reasons like lack of writing technique, lack of writing
experience, uncertain grasp of English language (or language in which a report is
written) and its usage etc.
This unit is designed to help a valuer to communicate data and information
analysis and opinion efficiently in his valuation reports. The unit therefore includes
suggestions for improving writing skills, correct usage of words, construction of
sentences and arrangement of information, facts, concept and ideas in a logical
sequence of paragraphs leading to conclusion and opinion.

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 STRUCTURE OF THE UNIT 2
2.0 OBJECTIVE
2.1 AIM
2.2 FORM
2.2.1 General
2.2.2 Objectivity
2.2.3 Structure
2.2.4 Style
2.2.5 Tone
2.3 CHOICE OF WORDS
2.3.1 Clarity
2.3.2 Use simple and short words
2.3.3 Words and phrases to be avoided
2.3.4 Effective use of words
2.4 SENTENCES AND PARAGRAPHS
2.4.1 Sentences
2.4.2 Emphasis
2.4.3 Modifiers
2.4.4 Length of sentences
2.4.5 Paragraphs
2.5 ESSENTIAL QUALITIES OF A GOOD REPORT
2.5.1 General
2.5.2 The Essentials of A Good Report
1. Systematic and Methodical
2. The Continuity : Continuous Reading
3. Well Set-out
4. Definite and Concise
5. Legible

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2.0 OBJECTIVE
It is expected that the student will be able to develop and improve his
communicative skill after studying this unit. He will specifically learn about –

• The Aim of the report

• The Form of the report

- Objectivity
- Structure
- Style
- Tone

• Choice of Words
- Clarity
- Use of simple and short words
- Words and phrases to be avoided
- Effective use of words

• Sentences and Paragraphs

- Construction and emphasis

• Essential Qualities of a Good Report

- Systematic and Methodical
- The Continuity : Continuous Reading
- Well Set Out
- Definite and Concise
- Legible
2.1 AIM :
2.1.1 In non-technical reports like a story or a novel, weekly columns in newspaper
covering news etc the emphasis is on the literary quality of writing and
communicating effectively. In technical reports the primary purpose of writing
is that of practical exercise of the professional skill on behalf of a client and
the skill of writing a report or communicating is often neglected. In order to
ensure effective communication between a client and a professional valuer it
is necessary to develop and improve reporting or communicative skill.
2.1.2 In oral report or oral communication there is mutual response between both
the parties i.e. a client and a professional advisor or valuer and accents,

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 phrasing, vocabulary and even physical signs such as facial expression and
body language all help a client in understanding technical aspects of a report.
In a written report however, words alone have to do all the work and clarify all
aspects including technical aspects, and justify conclusion and opinion.
2.1.3 Most of the valuation reports are intended for specific individuals or a group of
individuals of known characteristics and known level of perception or
understanding. The extent of factual information and data, balance in
emphasis between practical and conceptual issues, level of technical
phrasing, reference to statutory and other aspects, use of words and
language etc. in a report should be such as would be easily understand and
well received by individuals for whom a report is intended.
2.1.4 The aim of a technical report is to communicate, to a client or a reader, the
information and data, analysis thereof, reasoning, conclusion and opinion
efficiently and effectively. This requires not only the technical skill but also the
skill of communication. A report should in the first instance be received and
read with interest. At the same time it should generate confidence about its
technical contents in the mind of a client or reader. A report should therefore
be presented in an easily readable written form and in logical sequence using
simple language and simple words and with professional credibility.
2.2 FORM
2.2.1 General :
The physical appearance of a report together with its form, the style of
presentation, analysis of data and information by application of technical
expertise, arrangement and phrasing of concepts and ideas leading to
conclusion all play important role in understanding technical contents of a
report by a reader. A report has a distinct form indicated by objectivity,
structure, style and tone of writing which distinguishes it from other forms of
communication.
2.2.2 Objectivity :
A report should be objective and should not be subjective with any
bias. The information and data should be collected by carrying out rigorous
and comprehensive search, enquiries and site inspection without any
preconceptions as to which information, data and facts could be more relevant
or otherwise. The information, facts and data so collected and recorded
should be analysed and evaluated objectively, without any prenotions, by
application of professional expertise leading to sound conclusion and
professional opinion. A report will then have professional credibility generating
confidence in the mind of a client or a reader. It will also help in dealing with
further consequences arising by the reason of submission of a report.

18
2.2.3 Structure -
Writing a report is preceded by the process of (i) receiving instruction,
(ii) conducting surveys, site inspection and inquiries on and off the site for
collecting information and data (iii) analysing of data and information etc. and
(iv) drawing inferences and reaching at conclusion. This process is reflected
in the physical form of a report and in deciding ordering of the contents of the
written report forming the structure of a report. A report should ideally stand
as a document in its own right and a client or a reader should be able to
interpret technical aspects and to observe as to how the writer of a report has
responded to instructions.
Every effort should be made to clearly distinguish facts from opinion.
The final part of a report will comprise drawing inferences from analysis of
information and data etc., resolving the balance of alternative arguments
using technical expertise and past experience and identifying possible effects
or events which may arise from the present situation. This process leads to (i)
the conclusion (ii) the final opinion with recommendations regarding steps or
actions required to be taken for implementation of the opinion, and
(iii) possible consequences. The opinion should be accompanied by detailed
reasoning and explanation for better appreciation of the opinion.
A characteristic structure of a report helps a reader to use a report
efficiently and effectively. It also helps the writer of a report in ordering the text
so that the logic of inspection, data collection and analysis is reflected in a
report.
2.2.4 Style :
A report is an essay on technical subject written in simple non-technical
words. The style of a report should therefore be that of an essay with simple
words and simple and short sentences. Complex, complicated and long
flowing sentences, which create confusion more often than otherwise, should
preferably be avoided. At the same time staccato or disconnected sentences
giving impression of brief notes or specifications should also be avoided. A
report should be a sequence of simple, short and neat sentences, each
sentence communicating only a single element or point of information and
each group of sentences or a paragraph covering only one aspect of
information data analysis etc. or one aspect of the subject matter e.g. a
property to be valued.
Further the style adopted should be impersonal style using passive
voice instead of active voice. Repeated use of “I”, “me”, “my” etc. is often
annoying to a reader and may give smell of an ego. A report written in first
person may also give impression of lack of objectivity and may result in loss of

19
 interest on the part of a reader. The world “we” can be used only some times
if absolutely unavoidable. Instead of “I inspected the property” or “I collected
the data” etc. it is better to say “The property was inspected” or “data was
collected” etc.
The use of ‘simple’ past tense’ in the above sentences however
suggests that the action was completed sometime in the past. In order to state
that certain action was completed just at the time of writing a report it is better
to use ‘present perfect tense’. Instead of stating that “the property was
inspected” or “data was collected” etc., it is better to say that “the property has
been inspected” or “data has been collected” etc. which indicates that the
actions have been completed at the time of writing a report.
2.2.5 Tone :
A person writing a report should primarily have sound technical
knowledge and experience and is considered as having authority in the
concerned field. A report however should not be written in a highly
authoritative, dictating or official manner as it may carry smell of arrogance. At
the same time a report should not be written in a too casual tone as it will not
be effective, will give impression of lack of expertise in the field and will not
generate confidence in the mind of a client or a reader. A report should
therefore be written in the style of a Demi. Official (D.O.) letter which is neither
too authoritative nor too casual. It is necessary to preserve certain dignity of
tone so that the information facts, analysis and opinion can be expressed
convincingly.
2.3 CHOICE OF WORDS :
2.3.1 Clarity –
Clarity is one of the most important qualities of a good report. Use of
inappropriate words or improper construction of sentences often results in
lack of clarity. Choice of proper befitting or apt words conveying the exact and
precise meaning is therefore crucial for a good report. A dictionary, a
thesaurus and/or word processor are therefore important tools for producing
good reports. Word processors offering speedy and attractive editing facilities
can make increasing contribution to office practices.
Lack of clarity may result from poor words used and improper
construction of sentences. Poor word selection and weak writing may indicate
failure to think before writing. One should always bear in mind the famous
quote “Whatever cannot be made clear in writing probably is not clear in
mind”. Whatever is to be stated in a report should be stated clearly, in simple,
straight forward words and sentences. Instead of saying “ABC Mall is a nexus
of retail and office activity in the city and is diagonally across the M.G. Road

20
 from the properly under valuation” say “ABC Mall is the Center of commercial
activity and is situated just opposite the property under valuation, across the
M.G. Road”. Instead of saying “No prominence of any public utility exists in
close proximity to the property under reference” say “No public utilities are
located near the property under reference”.
2.3.2 Use Simple and Short Words :
Good English requires not only a good command over language but
also a rich vocabulary and full understanding of the precise meaning of words.
The best effect of a report is usually achieved by using shorter and simpler
words rather than by using long, pedantic words. Pompous expressions and
long words used for creating impression of scholarship or learning often result
in creating bad impression. “Begin” is more effective than “commerce”, “give”
is better than “present” or “confer”.
With the use of longer words there is the tendency to exaggerate which
should be avoided in report. Instead of stating that “the property presents a
wonderful opportunity” it is better to state that “the property is a sound
investment” Do not say that “the property is extraordinarily good” when it is
meant that the property is suitable for the purpose of the client.
2.3.3 Words and Phrases to be Avoided
Avoid use of redundant words, hedge words, trite expressions,
pointless phrases and false elegant and bombastic words which make a
report unnecessarily wordy. When a writer fails to appropriate correct
meaning of a word, the report may become unnecessarily repetitive and
wordy. A few examples of such words are given below :-
a) Redundant, Repetitive Words :
i) Fundamental principles, basic fundamentals. Use either
fundamentals, or principles and either basic or fundamentals.
ii) ‘exactly identical’. Use identical which means exactly alike
iii) ‘personal opinion’ – say opinion. When one is expressing
opinion in his report it is always his personal opinion and not
opinion of someone else.
iv) ‘true facts’ – say facts – Facts are true
v) ‘in order to do this’ – say ‘to do this’
vi) ‘important essentials’ say only ‘essentials’
vii) Redundant words like ‘relatively’, ‘definitely’, ‘exceptionally’ etc
have no place in a report.

21
b) Hedge Words :
Hedge words like ‘appears’, ‘seems’, ‘might’, ‘suggests’,
‘possibly’ etc should have no place in a report. Such hedge words
indicate that the writer is not sure about the facts, information or
evidence given in a report. Phrases such as “the information seems to
suggest” should be avoided. A valuer who uses many hedge words
conveys insecurity and the reader may lose faith in the report.
“The walls appear to be damp” is meaningless because the
client himself could see that. A valuer is paid, not to say what it
“appears” he is paid to say what it “is”. He must find out whether the
walls are damp or not.
Further modifiers such as ‘more’, ‘most’, ‘very’, ‘extremely’,
‘quite’ etc may be used only if at all necessary and that too, with great
care. The use of quite conveys indecision. Instead of saying “The
properly market is quite strong” say that “The property market is
strong”.
Similarly, avoid the use of “also” in a report as far as possible.
c) Trite or Common Place Expressions –
Trite expressions are commonplace expressions which
accumulate in our vocabularies and crop up in daily use. These
expressions are too familiar and are often overused. They can be
replaced by simpler phrases. “At your earliest convenience” means
“soon”. Some trite expressions like “enclosed herewith please find” “at
this point of time” “pursuant to your request” and “in connection with”
can be easily replaced by “enclosed is”, “now” “as requested by you”
and “about” respectively.
d) Pointless Phrases
Phrases such as “it is interesting to note that” “it may be said
that” should not be used in a valuation report. These are simply fillers
and give impression that the writer is only filling space while his mind is
warming up and thinking about or groping for further write-up.
Further instead of “accounted for by the fact” use “due to”.
Instead of “notwithstanding the fact that”, “although” is simple to use.
Similarly instead of “based on the fact that” “in close proximity” and “in
the course of” it is better to use “because”, “near” and “during”
respectively.

22
 Similarly the phrase “In my opinion” is redundant and points
less. Since a report is duly signed by a valuer and therefore it goes
without saying that the opinion(s) expressed particularly regarding the
estimate of fair market value and advice given are his opinion and/or
his advice.
e) Technical Terms:
A client is a common man not familiar with the valuer’s technical
work and language. A valuer must therefore avoid using technical
words and phrases which a client will not understand No technical
terms should be used in a report. More often than not, a technical word
can be substituted by an ordinary simple word.
In cases where technical terminology is unavoidable and is
required to be used, it should be defined and explained by example or
by implication in simple words, when first used.
f) Adverbs:
Care should be taken to ensure that the adverbs are placed in
the correct positions. Do not say that “the property needs repairs or
repainting badly” when it is intended to say “the property badly needs
repairs or repainting”.
g) Punctuation:
The incorrect use of punctuation may often change or distort the
meaning of a sentence. Care should therefore be taken to see that any
ambiguity or misunderstanding is not resulted due to careless or
incorrect punctuation. Such situation can be easily avoided by keeping
sentences simple and short. Modifying or qualifying clauses often lead
to complicated sentences requiring exact punctuation.
2.3.4 Effective use of words :
Words are the basis of all communications. When used properly, they
describe objects and actions correctly. When used poorly they lead to poor
communication and reflect adversely on the writer. In writing a report every
word should be chosen with utmost care so that the maximum and precise
meaning is conveyed with the minimum words. Good selection and proper
usage of words are the products of education, common sense, and most
important of all, a willingness to recognize and correct bad writing habits.
Once a writer has confidence in his selection and use of words the
composition of sentences and paragraphs becomes easier.

23
2.4 SENTENCES AND PARAGRAPHS
2.4.1 Sentences :
It has already been suggested to avoid complex and compound
sentences in a report and to use simple and short sentences.
A sentence is a group of words conveying a single point or a complete
thought. Each sentence should be constructed as to communicate a single
element of information or idea with greatest economy in uses of words.
A clause is also a group of words which may (independent clause) or
may not (dependant clause) convey a complete thought. In the sentence “As
(we) agreed earlier, (dependant clause) the fair market value is estimated as
on 1st March 2006 (Independent Clause)” the earlier part is dependant clause
and later part is independent clause. A complex sentence consists of one
dependant clause and one independent clause, while a compound complex
sentence consists of one dependant clause and two independent clauses. “It
has been already suggested earlier, that it is better to avoid long winding
sentences and preferably use short sentences” is itself an example of
compound complex sentence.
2.4.2 Emphasis :
Sentence construction can serve to emphasies or deemphasize ideas
or points. Simple sentences are emphatic because they contain only one
point. In a report however it is not always possible and desirable to write in
simple sentences. Dependant clauses are less emphatic than independent
clauses. Proper emphasis is therefore created by stating major information or
ideas or thoughts in independent clauses. Emphasis also depends on the
position of the subject and the object in a sentence. In a sentence, “The
suburban area is growing slowly” the emphasis is on the suburban area while
‘slow growth’ is emphasized by saying that “slow growth is characteristic of
this suburban area”. In order to properly assess the importance and
significance of information or idea, it is necessary to develop and use the
technique of giving emphasis.
2.4.3 Modifiers :
The order in which words are placed in a sentence is also important
because the sense of the sentence may depend on it. Modifiers such as
adjectives, adverbs, phrases, clauses etc. should be placed near or next to
the words they modify. Wrong placement of a modifier can produce ridiculous
meaning as illustrated by the sentence “the property needs repairs badly”
when it is intended to say that “the property badly needs repairs”. Further
stating that “The valuer, by the reason of submitting this report, shall not be

24
 required to give evidence in the court” does not actually mean to say that
because the valuer has submitted this report he shall not be required to give
evidence in the Court. What is intended to say is that the valuer shall not be
required to give evidence in the court just (or only) because he has submitted
this report. It would therefore be proper to state that “The valuer shall not be
required simply by the reason of submitting this report, to give evidence in the
court”
2.4.4 Length of Sentence :
The length of a sentence depends on the complexity or complication of
the idea, information or point to be expressed or conveyed. Normally a
sentence length of about 20 words is preferable. Discussion regarding method
of valuation or reasoning about estimation of value and analysis of data may
require longer sentences than those required for description of a property.
In order to maintain interest of a reader, it is necessary to vary
construction of sentences, alternating between simple, complex and
compound sentences. A string of simple sentences or repeated use of one
type of complex or compound sentences would be monotonous and tedious.
By varying structure or construction of sentences and by varying length of
sentences, information data, analysis etc. can be presented in a more
interesting manner.
2.4.5 Paragraphs :
A sentence is a group of words expressing a complete thought or point.
Similarly a paragraph is a group of sentences developing a single topic or
aspect or part in a report. The effectiveness of a paragraph and the clarity of
what if intends to convey or express depends on the quality of individual
sentences and how they are linked together. Sentences are linked in many
ways like repeating words used in preceding sentence by using transitional
words as connecting words such as ‘further’, ‘also’, ‘yet’ etc. etc. No sentence
should however begin with words ‘If’ ‘But’ ‘Therefore’ ‘Because’, ‘How ever’
etc..
A paragraph may consist of only one sentence or several sentences.
The main idea or thought to be conveyed by a paragraph is contained in the
topic sentence. A topic sentence is usually used as the opening or closing
sentence of a paragraph because these are emphatic positions.
It is advisable to give headings and subheadings to paragraphs
indicating the aspect or topic covered in them, so that a reader can know, at a
glance, the contents of a paragraph. It is however not necessary to give
heading or subheading to each and every paragraph. Similarly it is better to
number to headings and subheadings.

25
2.5 THE ESSENTIAL QUALITIES OF A GOOD REPORT :
2.5.1 General :
It is already pointed out earlier that a technical report is an essay on
technical subject written in a simple language for easy understanding by a
common layman. It should also create interest in the mind of a reader so that
he is tempted to read it from the beginning to the end in one sitting like a story
a novel. It is therefore necessary that a report should have certain specific
qualities which are essential to make it a good report.
2.5.2 The Essentials of a Good Report are –
1. Systematics and Methodical :
The report should be systematic and methodical. This implies
that before writing a report the exact order in which it is proposed to
present information data, analysis, findings and conclusion should be
decided. Such order should follow a clear definite, systematic and
logical sequence. The description should not be shifting from one
aspect to another aspect at random, but should follow a systematic
order and logical sequence. The information and data, its analysis
findings should then be given in a series of paragraph each paragraph
being independent and yet logically following the earlier paragraph.
Naturally conclusion will be given at the end after recital of facts
analysis and findings.
2. The continuity : Continuous Reading :
The report should be such that it can be read as a complete
continuous reading from start to finish, without any break in its reading.
There should not be any jerkiness and there should be no break felt
between any of the parts of the whole report. As already pointed out, a
report should not be like a catalogue, nor it should be like a
specification and that it should be an essay written in a simple
language forming a continuous reading. It is therefore imperative that
schedules, statements, maps, graphs and such other appendices
should not form part of the main body or text of the report, but should
be attached to the report as annexures. A reader of the report who may
be interested in details can find them in schedules etc. attached to the
report while a reader who may not be interested in the details of the
schedules etc. but is interested only in the findings or results of the
schedules is not compelled to go through details which may be
unnecessary for him. The appropriate form and use of supporting
material such as schedules, statements, graphs, charts, maps etc. will
be discussed in details in the next Unit 3.

26
3. Well Set Out :
A report should be arranged in such a manner that a client can,
at any time, easily refer to any particular part of a report without any
difficulty. Headings given to a group of paragraphs covering a particular
broad aspect and Sub headings given to a paragraph or a group of
paragraphs covering particular part of such broad aspect will serve this
purpose.
Headings and sub-headings to paragraphs or groups of
paragraphs can be given either in the margin where they can be easily
seen or found out or just to the right of the margin touching it. Sub-
headings should be in bold type than the general text and headings
should be bold than the sub-headings.
It is also a good practice to give serial numbers to headings and
sub-headings. Headings may be numbered in single or two digits e.g.
“2” or “3.1” while numbering of sub-headings should be in continuity of
that of the concerned heading and in two or three digits such as “2.1”
or “3.1.3” or “4.3.2” etc. Such numbering should invariably be in the
margin.
4. Definite and Concise :
The report should be concise and definite. The length of the
report should be such as may be just necessary to convincingly convey
the information, facts, analysis and opinion with reasoning. It should be
no longer or no shorter than required. The words, sentences and
paragraphs should be such as to convey maximum meaning in
minimum of words.
A report should contain definite facts, clear and definite opinion
and clear and definite advice, whenever called for, since the client is
just seeking the same. There should not be any ambiguity anywhere in
the report. The words ‘about’ ‘approximate’ ‘within the range of’ etc.
should have no place in a report and especially in the opinion.
The opinion and advice given in a report must be definite and
should be expressed in clear and unambiguous words so that only the
meaning intended is drawn and any meaning other than what is
intended cannot be drawn from it.
5. Legible :
The report, if handwritten as in the case of examination, should
be legible. In practice reports are usually typed, but the draft if any,
from which it is typed, should be legible. In present era of computer

27
 typing not only this essential quality is ensured, but a report can be
neatly arranged and well set out without much difficulty.
Each of these qualities is as important as the other i.e. all the
five qualities are equally important and essential for a good report.
***************

Exercise :
1) What is “Objectivity?”
Why and how is ‘objectivity’ important for writing a report?
2) What style and tone will you adopt for writing a report? Explain giving
reasons.
3) Why is proper choice of word essential in writing a report?
What care will you take in choosing words and which types of words and
phrases will you avoid in writing a report.
Explain giving reasons and examples.
4) What are the essential qualities of a good report and why are they essential.
Which of these qualities is most important and why.

28
 UNIT-3 THE GENERAL STRUCTURE OF A REPORT

INTRODUCTION:
A valuer is required to prepare and submit to the client valuation reports for
various purposes like purchase for occupation or for investment, sale or lease,
mortgage, local or Govt. taxation e.g. rating, stamp duty, income tax etc., estate
management, compulsory acquisition etc. etc. Valuation reports for such purposes
may be required in respect of different types of properties like residential,
commercial shops and offices, factories etc. etc. The purpose of valuation report
being that of presenting the process of valuation i.e. communicating information and
data analysis, reasoning and opinion and advice, if needed, the system or the
process of preparing a valuation report follows the valuation process beginning with
instructions from the client and ending with opinion and /or advice. The valuation
process is generally the same for various purposes and for different types of
properties. The basic or general structure or framework of valuation reports therefore
remains the same irrespective of the type of property or the purpose of valuation.
The difference in valuation report arises due to the fact that the information and data
required to be collected and the method of analysis thereof varies according to the
purpose of valuation and the type of property to be valued.
This Unit is intended to make the learner / valuer familiar with the basic and
general structure of a valuation report. It will include guide lines for collection of
information and data, various sources from where it can be collected, technique of
making enquiries for collecting information and data, tabulation and presentation of
data and its analysis etc. Suggestions are also given for preparation and
presentation of supporting material in the form of annextures or appendices to be
appended to a valuation report.

29
 STRUCTURE OF THE UNIT 3

3.0 OBJECTIVES
3.1 PURPOSES OF VALUATION
3.2 STRUCTURE OF A VALUATION REPORT
3.2.1 General
3.2.2 Parts of A Report
3.2.3 Definitions
3.2.4 Assumptions and Limitations
3.3 INTRODUCTION
3.3.1 Forwarding Letter
3.3.2 Title of a Report
3.4 RECITAL OF FACTS : COLLECTION OF DATA
3.4.1 General
3.4.2 Instructions
3.4.3 Method of valuation
3.4.4 Purpose of valuation
3.4.5 Third Parties
3.5 FACTUAL EVIDENCE
3.6 SOURCES OF INFORMATION AND DATA
3.6.1 General
3.6.2 Public Records
3.6.3 Publications and Economic Journals
3.6.4 Site Inspection
3.6.5 Inquiries – Information to be collected by –
3.6.6 Technique of Inquiry
3.7 ANALYSIS
3.7.1 General
3.7.2 Fair Land Value and Fair Market Rent
3.7.3 Rate of Interest for Capitalisation

30
 3.7.4 Discussion of Instances of Rentals and Sale
3.8 CONCLUSION
3.9 SUPPORTING MATERIAL
3.9.1 General
3.9.2 Schedules / Tables
3.9.3 Graphs
3.9.4 Bar Charts and Pie Diagram
3.9.5 Plans / Maps
3.9.6 Photographs
3.9.7 Other Supporting Material
3.9.8 Documentation
3.10 THE GENERAL FRAMEWORK OF VALUATION REPORT
3.11 FORMAT REPORTS

31
3.0 OBJECTIVES
The basic or general structure of a valuation report follows the system or
process of valuation. It, therefore, remains the same with variations according to the
purpose of valuation and the type of property to be valued. The student is expected
to understand the reasoning leading to logical and systematic arrangement of such
basic structure of a valuation report so that he will be able to make additions,
alternations, deletions etc. in the general structure of a valuation report, whenever
and wherever necessary, according to the purpose of valuation and the type of
property to be valued.
In this Unit the student will specifically learn about –

• The Purposes of Valuation

• The General Structure of A Valuation Report

• Introduction : Forwarding Letter and Title of A Report

• Recital of Facts : Data Collection

• Factual Evidence

• Sources of Information and Data

• Analysis of Information and Data

• Conclusion

• Supporting Material

• The General Framework of A Valuation Report

• Format Reports

3.1 THE PURPOSES OF VALUATION

3.1.1 A valuer may be required to report on valuation of a property for various
purposes. A client may require a report on valuation of a property for the
purpose of (a) purchase for occupation (b) purchase as investment (c) sale (d)
lease (e) mortgage (f) Local or Govt. taxation such as rating income tax,
wealth tax etc. (g) compulsory acquisition including injurious affection
(h) estate management (i) town planning matters etc. Some times reports are
required for more general matters like trend of property market conditions and
advisability for buying or selling a property.
3.1.2 A valuation report for any of these purposes should be organised to lead the
client or reader smoothly from defining the problem through descriptive
information and data, through analysis thereof and eventually to the reasoning
process producing specific conclusion and opinion.

32
3.2 THE GENERAL STRUCTURE OF A VALUATION REPORT :
3.2.1 General :
It is not possible to give, in this unit, examples of reports on all types of
properties and for all purposes. Every report in respect of any specific
property for any specific purpose should be built upon certain basic
framework. Once the general principles and system of such basic framework
is understood, then there will be no difficulty in making suitable alterations in
writing a valuation report to meet any particular requirement.
3.2.2 Parts of a Report –
Every report should be comprised of five parts viz.
1. Introduction which includes the forwarding letter duly signed by a
valuer and the title of a report.
2. Collection of information and data and Recital of facts.
3. Analysis of information and data
4. The conclusion, opinion and advice duly signed when needed.
5. Supporting material i.e. statements, tables, charts, graphs, plans,
maps, photographs etc. forming annexures to the main descriptive
report.
3.2.3 Definitions
Some schools of thought advocate that (a) the definition of value (b)
assumptions and limitations and (c) method of valuation adopted should be
clearly stated in a report. As a general rule where no definition of ‘market
value’ is given in a report the standard definition of market value held by the
Supreme Court of India in its judgement and also adopted in valuation
standards prescribed by professional institutions, viz. The price offered and
accepted by a ‘willing, able and prudent’ seller and buyer in an arms length
transaction’ is presumed to have been adopted in a report. In cases where the
‘value’ estimated is / other than this standard definition it should necessarily
be clearly defined in a report.
3.2.4 Assumptions and Limitations :
No assumptions should be made, as far as possible, in a report, unless
by compulsion, which is very rare. Limiting conditions will mostly arise in
collection of information and data where a valuer is prevented or obstructed in
collecting and verifying it, either due to physical circumstances or legal
circumstances. In such cases the limitations may be stated in the paragraphs
relating to ‘Data Collection or Recital of facts’. In certain circumstances value

33
 statement can also be subjected to qualifying clauses. Utmost care should
however be taken to ensure that such qualifying clauses shall not, in any
case, render value statement almost meaningless.
There may be limiting conditions regarding use of a report. These
should be clearly stated in the form of caveats as already mentioned in Para
1.3.7 in the Unit 1 and especially regarding leading expert evidence in any
legal proceedings.
3.2.5 Method of Valuation :
A valuer cannot be compelled to adopt any particular method of, or
approach to, valuation. The method of valuation adopted will be evident from
collection of information and data and analysis thereof leading to reasoning
and ultimately to opinion. It may therefore be redundant to make specific
mention of the method of valuation adopted. In a case where the valuer
makes a specific statement in a report regarding the method of valuation
adopted, it is advisable that he should also give reasons for adopting a
particular method of valuation. Once a particular method is adopted it is
absolutely necessary that a valuer shall carefully collect all the information
and data required and analyse the same as may be required for thoroughly
and logically following the method adopted.
It is not necessary to estimate fair market value of a property by
adopting all the three approaches to valuation, unless the valuer himself
desires to cross-check. In any case, however, temptation to arrive at an
average value should always be scrupulously or strictly avoided.
3.3 INTRODUCTION :
3.3.1 A short forwarding letter to the client and title of the report constitute the
introduction part of a report.
3.3.2 Forwarding or Transmittal Letter :
A report is usually sent to a client under a short covering letter. The
letter should briefly refer to the subject matter i.e. identification of the property
being valued and the purpose of valuation. The letter should include a concise
statement of conclusion about value and the date on which the value is
estimated. It may also indicate that the value estimated is subject to certain
limiting conditions, if any as mentioned in the valuation report. The letter
should be signed by the valuer or by the person duly authorized to sign such
letter on behalf of the valuation firm.
A forwarding letter may preferably be written on the letterhead of a
valuer or a firm of valuers. It should state (a) the reference number comprising
code number, if any, indicating type of job, file or job number, year and serial

34
 outward number and (b) the date of sending the letter. The letter should be
addressed to the client, stating his postal address. If the client is a corporate
company it is preferable to specify the name and designation of the person
dealing with the matter who will receive the letter and the valuation report. The
forwarding letter may also repeat the caveats, if any as stated in the report
regarding the use of valuation report, especially relating to judicial
proceedings.
Following is the example of a typical forwarding letter.
Letterhead of the Valuer / Firm.
(including address)
Ref. No. VAL/PA-45/2007-08/1107 21st June 2007
To,
Shri.
101, -------------- Apartments,
-----------------, Pune – 411030.

Sir,
Subject: Valuation of property bearing CTS No. ---------- Plot No. ------, -------
Co.op. Housing Society, -------------, Pune – 411004.
Reference:: Instructions given in your letter no. ……….. dt. 10th May, 2007.
We have inspected the site, collected the necessary information and data and made
necessary inquiries. On the basis of analysis of the available information and data,
the fair market value of freehold interest in the property bearing CTS No. …………..
Plot No. …….., …… Co.op. Housing Society, -----------, Pune-411004 for the purpose
of sale with vacant possession, as on 1st May 2007, is estimated at Rs. 75,40,000/-
(Rs. Seventy Five Lakhs Forty Thousand Only) subject to limitations stated in our
valuation report.
Our valuation report containing pages 1 to 21 with annexures A to K, identifying the
subject property stating assumptions and limitations giving pertinent facts about the
property, the results of investigations and analysis and explaining the reasoning
leading to estimation of market value of the subject property as above, is enclosed.
Our Bill of fees is also enclosed. Early payment is requested.
Thanking you. Yours sincerely,
Sd/-
(A.B.C. Valuer)

35
3.3.3 Title of Report
A report will begin with a title comprising (a) identification of the
property being valued e.g. City Survey number or Final Plot number, T.P.S.
…….. of City / Village etc., name of the property, if any, and locality (b) the
purpose of valuation and (c) The date on which value is estimated. The
purpose and the date of valuation both are very important and the title will be
incomplete without any one of these.
Sometimes legal interest valued e.g. ‘freehold property bearing C.S.
No.’ .. is also mentioned in the title of a report. The better place for describing
legal interest being valued is in the opening paragraphs of a report regarding
Recital of Facts’ or ‘Data Collection’.
A typical title of a report will read as
Report on Valuation of
Identification- The Property bearing C.T.S./F.P. No. . TPS …, Panchpakhadi, Thane
Purpose - For Purchase for occupation
Date of As on 31st March 2007
Valuation

3.4 RECITAL OF FACTS : DATA COLLECTION :

3.4.1 General
A report should give sufficient information about the property to be
valued so as to be of assistance to a client and to those for whom a report is
intended. It should define exactly the subject matter of a report and give all
the relevant facts including legal interest in the property which is being valued.
3.4.2 The Instructions :
Instructions given by a client (a) identify the property and thereby the
type of property and interest therein to be valued. (b) define the purpose of
valuation (c) state the date of valuation and (d) suggest the scope and
limitations, if any, of the task to be performed. The information and data
should be collected taking into consideration these four aspects of the
instructions. The information and data to be collected should be in respect of
(i) the property to be valued including interest therein to be valued and
(ii) properties comparable to the property to be valued and involved in recent
instances of rentals and sales in the neighbourhood. Secondly the purpose of
valuation determines the type or the nature as also the extent of details of the
information and data required to be collected. The objective, scope, and
limitations of the task also decide the type and the details of the information

36
 and data required. The material date of valuations sets the time limit since the
information and data to be collected should be as on the material date or as in
the recent past i.e. up to two to three years, or at the most five years prior to
the date of valuation.
3.4.3 The method of valuation :
The method of valuation adopted also determines the nature of
information and data to be colleted. In addition to the data regarding the
property and its surroundings the data regarding the prevailing schedule of
rates of construction or rate of construction per unit (i.e. per sq. metre or per
cubic meter) and recent instances of sale in respect of comparable open
lands in the nearby area will be required in the cost approach to valuation.
The market, approach to valuation will require the information and data
regarding the transactions of sale of similar and comparable properties
situated in the surrounding locality, while for income approach to valuation,
information regarding instances of rentals as well as instances of sale in
respect of similar comparable properties in the vicinity, will be necessary.
3.4.4 Purpose of Valuation
A simple rule for deciding which information and data and the details
thereof should be collected is that a valuer should consider or imagine`
himself to be in the position of a client and think and decide about information
and data he would like to know for logically and systematically arriving at the
conclusion. Having done this, he should consider himself to be in the position
of a party on the other side and decide about the information and data
necessary for the purpose. For example in estimating fair market value of a
property for purchase for occupation he should consider himself as a
prospective occupier and then also as the owner or vendor while in the case
of valuation for mortgage, a valuer should consider himself to be a mortgager
taking loan on mortgage of his property and thereafter consider from the point
of view of the mortgagee or financial institution granting loan on mortgage of
that property. Such thinking from both sides will help in ensuring that no
important point of information and data has been overlooked or remains to be
considered before arriving at a conclusion.
3.4.5 Third parties
A valuer writing a report should be careful and must always bear in
mind as to how it will be used and should particularly consider such cases
where information and data will be wanted by and passed on to solicitors or
other third parties.
3.5 FACTUAL EVIDENCE :

37
3.5.1 It is the duty of a valuer to give all relevant facts of the case to the client. He
must also satisfy himself that whatever he writes is TRUE. He must always be
prepared to defend and maintain his evidence about the facts in the court of
law whenever needed. It is therefore necessary that the factual evidence
given in a report should be first hand evidence. He must himself ascertain
verify and get satisfied that the evidence and facts stated in a report are true
and correct. He must also guard against and should never rely on hearsay
evidence. Phrases like “It is learnt”, “ABC tells me”, “I am informed” “It seems
or appears” etc. heave no place in a valuation report.
3.5.2 All information, data and facts gathered by site inspection or from records,
journals and such other secondary sources should be verified before including
it in a report. The data collected from secondary sources should be attributed
to its origin by quoting the source, so that it may not cast any additional
responsibility on a valuer.
3.5.3 A valuer may not have first hand knowledge or is doubtful about some facts
which he may be unable to verify, e.g. about tenure and title to a property. In
such cases he should advise his client to get it investigated or verified by his
solicitor.
3.5.4 The information and data included in a report should be factual, true, precise
and definite. The words “appears”, “seems” etc. should never find any place in
a valuation report.
3.6 SOURCES OF INFORMATION AND DATA :
3.6.1 General -
Information and data can be collected from various sources. These
sources are mainly (i) public records i.e. Govt. and Municipal records (ii)
publications and journals (iii) site inspection and (iv) inquiries especially on
site. Only such information and data which is relevant to the problem should
be collected. Information and data which is not relevant to the problem often
gives rise to considerable confusion in which one may get lost and also
results in wastage of time and energy.
3.6.2 Public Records -
A) City Survey / Tahsildar Office :
Information regarding title (ownership) and tenure (conditions of
holding) i.e. freehold, leasehold, Inam tenure etc., is obtained from
property register cards (P.R. Cards) from City Survey Office in case of
properties situated in Urban City surveyed areas and from VII / XII
extracts from Tahsil Office in case of properties situated in rural and
non city-surveyed areas. Sometimes encumbrances like mortgage,

38
 easement rights etc. are recorded on P.R. Cards and 7/12 Extracts. It
is however advisable to conduct enquiries in respect of any such
encumbrances on a property during site inspection.
It is also advisable to obtain City Survey maps or village maps
showing location of the property and its surroundings from the
concerned City Survey Office or Tahsildar / Collector Office.
B) Registrar’s / Sub. Registrars Office : Land Records Department
The information regarding sale and lease transactions can be
obtained from the records maintained in the offices of Sub. Registrar /
Registrar from Index Two form, which gives information such as names
of vendors and purchasers or lessors and lessees in case of lease
deeds, identification of land and area sold etc., amount or prices at
which it is sold, date of transaction etc. It is necessary to weed out
transactions which are not genuine (like sale and resale between same
parties indicating money lending) and which are not ‘at arms length,
e.g. those between relatives etc. and select only genuine transactions.
In majority of cases recorded prices are shown lower than the actual
prices paid and the information regarding actual price paid needs to be
skillfully extracted from the vendor or the purchaser during inquiries on
site.
C) Office of the Executive Engineer P.W.D. / Z.P. –
Information regarding Dist Schedule of Rates (D.S.R.) as on
relevant dates and cost of construction can be collected from the
Offices of the Executive Engineer, Public Works or Roads and
Buildings or Irrigation Department of concerned district or from the
office of the Executive Engineer of the concerned Zilla Parishad.
D) Municipal Records :
Information about identification of the property, its area, rateable
value, annual municipal taxes etc. can be obtained from the office of
the Assessor and Collector of Taxes, of the concerned Municipal
Council / Corporation.
Information about permissible and potential use of a property,
permissible intensity of use in terms of the permissible Floor Space
Index (F.S.I.) or Plot Ratio (P.R.) etc., other Development Control
Rules (D.C.Rs) or Mun. Building By-laws and Regulations having
effect on value of a property will be available from the office of City
Engineer or Development Plan Department of the concerned municipal
authority. Similarly information regarding Development Plan proposals

39
 or Town Planning Scheme proposals or proposals regarding regular
lines streets etc. affecting the property being valued will also be
available from the office of the City Engineer or Development Plant
Dept. of the concerned Municipal Authority or the Special Planning
Authority / Development Authority if any, established for the area. The
information about the existing or proposed infrastructure development
can also be collected from the office of the concerned local authority
i.e. Municipal or Development Authority.
The plan or part plan of the Development Plan showing location
of the property being valued, its surroundings and proposals for
development providing infrastructure, amenities and facilities etc. can
also be obtained from the Office of the Local Planning Authority or the
Development Authority.
3.6.3 Publications and Economics Journals :
A) Census Books :
The increase in population and in the number of household over last
two or three decades indicates increasing trend of demand for residential
accommodation while figures of available houses gives information about
the trend in supply of housing. Similarly the number of workers engaged in
trade and commerce over last two or three decades indicate increasing
demand for commercial accommodation. The increase in employment in
tertiary sector activities is index, to some extent, of growing economic
activities and prosperity giving some idea about the level of property
values.
B) Economic Journals and Publications :
Information and data regarding economic indices, which are indicators
of national economic conditions, such as capital market indices e.g. B.S.E.
and N.S.E. (Bombay and National Stock Exchanges), Foreign Exchange
rates, wholesale price indices (W.P.I.) consumer price indices, (C.P.I.),
inflation rates, interest rates on Central and State Govt. bonds etc are
available in various economic journals and bulletins. These are helpful in
deciding appropriate rate of interest in comparison with those shown by
the study of the local real estate market by analysis of sale instances.
Similarly data regarding Per Capita Income, domestic savings and its
investment in various forms viz shares, debentures, Govt. bonds, fixed
deposits in banks and financial institutions, assets etc, as well as the
information regarding Gross and Net Fixed Capital Formation (at national
level) in the Real Estate sector (generally indicating demand side) and the
Construction sector (indicating supply side) indicating trends in the real

40
 estate and construction sector of economic, are also available in various
economic journals and publications.
Some such economic journals and publications are Reserve Bank of
India Bulletins, Economic Intelligence Service (E.I.S.) of the Centre for
Monitoring Indian Economy (CMIE) Journals, Hand Book of Industrial
Policy and Statistics published by the office of the Economic Advisor,
Ministry of Industries, Govt. of India, Economic Survey of Maharashtra
Published by the Directorate of Economics and Statistics, Planning Dept,
Govt. of Maharashtra, Economic Times, Financial Express etc. etc.
3.6.4 Site Inspection :
Most of the information and data can be gathered and verified during
inspection of site and property by observations and inquiries. The following
information and data can be collected and verified during such site
inspection:-
1) Situation of the property with reference to
(a) access i.e. fronting on main road or internal access road, corner
plot or intermediate plot etc.,
(b) amenities and facilities, recreational facilities like gardens,
playground, cinema halls etc. and
(c) Utility services available in the locality.
(d) development in the surrounding area i.e. commercial, higher,
middle or low income group residential, slums etc.
2) Site or Land – Area, Size, shape, level, foundations boundaries etc.
3) Buildings (if any) :
(A) Main buildings
a) Engineering aspects – type of construction, number of stories,
specifications and quality of construction estimated life etc.
b) Architectural aspects – (i) accommodation gross external (super
built-up) gross internal (built-up) areas of buildings or flat, and net
internal (carpet) areas of rooms, to arrangement of flats in a
building and arrangement of rooms in a flat, (iii) light and
ventilation, (iv) elevation and aesthetics etc.
c) Services: Water supply, sewerage, drainage, plumbing,
electrification etc., availability and duration of services, state of
maintenance etc.

41
 d) Maintenance and Repairs: State of and immediate repairs required,
if any in case of structure and services and cost thereof.
(B) Subsidiary buildings, if any, constructional and architectural
aspects, utility services state of maintenance and repairs as in the
case of main building, but in brief.
4) Open spaces within the site or plot, garden, parking, yards etc.
5) Occupation: Owner occupied, leased, tenanted, occupied by protected
tenants paying controlled / standard rent etc.
6) Finance: Gross annual rents, taxes and other outgoings like cost of
maintenance and repairs, insurance etc.
7) Encumbrances, easement rights Dominant and servient properties,
unauthorized constructions, encroachments, mortgage etc.
8) Instances of rentals of comparable properties in the surrounding areas
and their details regarding all comparison factors.
9) Instances of Sale-Verification of instances of sale collected from
Registrar/Sub-Registrar Office by interviewing either vendor, purchaser
or witnesses to transactions, inquiries, regarding documented/
Registered price and actual/price, factors of comparison with reference
to property under valuation and properties in rental instances. Inquiries
should also be made regarding genuineness of instances of sale,
whether transactions are at arm’s length or not etc.,
Information and data gathered by site inspection should be
definite and precise.
The owners / occupiers sometimes dissuade the valuer from
inspecting certain areas or parts or prevent him from making proper
inspection. In such cases where a valuer is hindered in his inspection
or prevented from making investigations the same should be clearly
pointed out in a report.
Many a time owners / occupiers are eager to give uncalled for
information or try to misguide. A valuer should guard against such
eventualities during inspection. He should also guard against hearsay
evidence.
3.6.5 Inquiries : Information to be collected -
During inspection of site / property, information regarding various
aspects can be gathered by making inquiries with concerned persons and

42
local residents. Inquiries should be made especially in respect of the following
aspects:
1) Leased properties: A copy of lease deed may be obtained or seen and
terms and conditions influencing net-income such as those regarding
rent reserved, revision of rent, renewal, restrictive covenants,
covenants regarding external and internal repairs etc. should be noted.
While reporting it is essential to indicate those statutory provisions and
terms and conditions of lease which influence –
a) Flow and scale / level of rent,
b) Obligations on the parties regarding management, financing and
attractiveness as investment etc. influencing rent and net income.
In case of Licence, it does not pass on any legal right to the
land.
2) Instances of Rentals of comparable properties in the locality are usually
not available on record. The information regarding the properties let
out, liabilities for maintenance, repairs and municipal and other taxes,
premium etc paid, if any, and the last date of fixing / revising rent etc.
needs to be collected by interviewing owners, occupiers, tenants.
3) Instances of Sale of comparable properties in the vicinity, available on
record do not reveal full and correct information. The information about
the actual price paid, including unaccounted money needs to be
skillfully extracted by interviewing vendors or purchasers.
4) Latent Defects: Information about defects, if any, in the property to be
valued, which normally cannot be revealed by careful inspection of
records and on site, such as easements and other encumbrances,
hidden defects etc. can sometimes be obtained by inquiries with
occupiers etc.
5) Relative Importance of factors of comparison. The relative importance
and priorities given by local residents of the area for various factors of
comparison and their levels should be ascertained by interviewing local
residents, occupants etc. Such information would be useful in
comparing properties involved in instances of rentals and sale
transactions with the property to be valued. It would also be useful for
assigning appropriate weightages to various factors of comparison and
their levels for comparing properties more objectively by adopting
weightage system.

43
3.6.6 Technique of Inquiry :
The success of inquiries in obtaining reliable information mainly
depends on the skill of a valuer in winning confidence of the person being
interviewed inducing or creating feeling of safety in his mind that imparting
information will not cause any harm what so ever, to him or to his interest and
that enough secrecy will be maintained. The goal of making inquiries is to
obtain good accurate and reliable information. It is therefore necessary to
develop skills needed especially about whom to ask, what to ask and how to
ask. Some simple and important rules to be followed in making inquiry are –
1) Do your homework before going for site inspection. Prepare lists of
questions to be asked to (a) Owners (b) Occupiers (c) Tenants (d)
Vendors and purchasers (e) Local residents etc. Arrange questions
logically and ask them systematically, beginning with simple questions
and progressing to complex questions.
2) Ask simple, direct and straightforward questions listen to answers
carefully and do not hesitate to ask obvious follow up questions and
probe abstract or vague answers.
3) Do not adopt interrogative or investigational attitude and tone. Do not
do anything that may provoke the person being interviewed. This is
very important rule.
4) Be considerate and keep the tone as conversational as possible. Be
informal and make the person feel at ease. Formal attitude will not
achieve openness or frankness necessary to elicit all the information
needed. One to one interview will ensure maximum frankness.
5) While asking questions use two most important and powerful words “I
need”. “I need information” will generate positive and better response
than to an expression “I want information”.
6) Be tactful and diplomatic. Always maintain professional composure.
Note the respondent’s reactions to questions and be careful not to bore
or intimidate him.
7) Be conscious about the time factor. One should neither hurry nor be to
slow and should ensure that the interview is at ease.
8) Be appreciative of the respondent’s co-operation in spearing his
valuable time and kind consideration and express your gratitude for the
same. Also leave the door open by expressing that you may call back if
you need any further information.

44
Analysis:
3.7.1 General
Analysis involves drawing, from the information and data collected,
logical and reasonable inferences and findings relevant to and helpful in
valuation of the property to be valued. The process to be followed for analysis
will depend on the method of valuation adopted.
3.7.2 Fair Land Value and Fair Market Rent
In cost approach or Land and Building method, land value is estimated
by comparison of properties while in Income approach or Income
Capitalisation method fair market rents of properties involved in the instances
of sale as also of the property to be valued are estimated by comparison of
properties let out with the properties sold and the property under valuation. In
market approach property to be valued is directly compared with the
properties sold. Such comparison between properties can be made directly
considering various factors of comparison or by adopting weightage system
where (ii) appropriate weightages are assigned to various factors of
comparison and their levels in accordance with their importance and priorities
indicated by local residents, and (ii) properties are compared on the basis of
total weightage score, areas of the properties and dates of transactions.
3.7.3 Rate of Interest for Capitalisation :
In income capitalization approach, the rate of interest and years
purchase (Y.P.) is estimated (i) by finding out Y.P. and the rate of interest
yielded by properties sold, dividing actual price paid (including unaccounted
money) by net annual income and (ii) by finding out relationship between
rates of interest so yielded by properties sold with the economic indices
(especially B.S.E. and N.S.E. indices) on the dates of transactions and then
estimating rate of interest considering the economic indices as on the date of
valuation.
3.7.4 Discussion of Instances of Rentals and Sales
In a valuation report discussion regarding comparison of properties
involved in the instances of rentals and sales and the property to be valued is
most important. Since the factors of comparison, total weightage scores,
areas and dates of transactions will appear repeatedly in such discussion it
may become tedious, uninteresting and boring. Changing the places of the
comparison factors, total weightage scores of properties areas and dates of
transactions in discussing instances of rentals and sales can introduce some
variety in the discussion and make it less tedious and somewhat interesting.

45
 Such discussions should be short and to the point. It will help to form opinion
about fair market rents and fair market values of lands or properties.
3.7.5 In analyzing the information and data it should be kept in mind that the
purpose of such analysis is to provide logical reasoning leading to conclusions
about fair market rents / values.
3.8 CONCLUSION :
Every report should end or conclude with opinion and advice, if needed
both duly signed based on logical reasoning and justification. The opinion and
advice should be expressed in clear and unambiguous words so that no
meaning other than that intended can be drawn and there should be no scope
for any misinterpretation. The opinion and advice must be definite and clear
since the valuer will thereby be committing himself absolutely. The opinion
“The property is worth Rs. 50 lakhs” has no meaning and is ambiguous and
indefinite. “The property is worth Rs. 50 lakhs for the purpose of occupation /
investment as on the date of valuation” is clear and definite opinion since it
defines the purpose and the date of valuation. Expressing fair market value as
“in the range of” or “varies between Rs. ….. to Rs….” or “about Rs….” is
vague and meaningless. The opinion must be definite and expressed clearly
and in unambiguous words.
The opinion and advice should be given without any type of qualifying
clauses, conditions or riders and should be unequivocal and absolutely clear.
Similarly no alternative solutions should be given since the client requires
definite opinion and definite advice of the expert.
3.9 SUPPORTING MATERIAL :
3.9.1 General –
Valuation of properties is becoming increasingly subject to grater
scrutiny and analysis. It has therefore become necessary to collect
comparatively large quantity of information and data. A text alone is
inadequate for the presentation and analysis of such data, which contributes
to formulation of professional opinion. The narrative part of a report is
therefore supported by a wide range of technical papers such as schedules
tables, graphs, diagrams, charts, maps, plans and photographs etc. which are
appended to the main wirte-up of a report. Such supporting material
complements the text and can achieve the same effect as can be achieved by
written words but more economically and in clear and concise form.
Schedules, tables, technical papers about legal provisions, Development
Control Rules etc. as also graphs charts, diagrams, maps, plans, photographs
creating quick visual impact are decisive in achieving effective

46
 communication. Care must however be taken not to drown the reader in the
data.
Each of the supporting material must have the same title as that of the
main report so that it can be put back in its proper place if misplaced. It should
also have a sub-title clearly indicating its contents / information and should be
arranged in a logical sequence with annexure / appendix number. The
annexure number, title and sub-title should be properly aligned at the top
right, as far as possible, with job number and date etc at the bottom right. The
annexures which may need folding should be folded in such a manner that the
annexure number, title, sub-title, job number etc. should be seen easily and
clearly.
It is advisable to write at the end of each of the supporting material,
including schedules, tables, graphs, charts, maps, plans etc. analytical
statements about its findings or observations. Such statements, if arranged in
logical sequence, may make writing of the narrative report easier by including
such concise analysis in the text. There is considerable merit in making the
written report as short as possible so that it acts as a summary with all the
details in the annexures. A reader is thus not compelled to go through all the
details but one who desires to know the details can always refer to the
annexures.
3.9.2 Schedules / Tables :
Schedules statements or tables are normally used to summarise (i)
Description of accommodation and areas of rooms etc. (ii) Description of
conditions of parts of buildings and state of repairs with estimated cost of
repairs (iii) Clauses in leases, particularly those regarding rents, repairs, other
covenants having effect on net income, etc. (iv) Details of sales and rentals –
statements showing instances of sales and rentals (v) characteristics of
comparable properties and weightages assigned for various factors of
comparison (vi) Portfolio characteristics (vii) Individual properties and market
performance / market conditions etc. etc. The statement showing instances of
sale and rentals is the most important statement and should accompany every
valuation report. The comparison statements showing weigtage scores of
properties and the statement comparing rates of interest yielded by properties
with various economic indices are also important accompaniments.
Schedules / Tables should have the same title as that of the report and
sub-title identifying contents of a schedule or table. Schedules, statements
and tables are in column form and the following important points should be
scrupulously followed –

47
 1) The information in columns should be arranged logically and
comparable data should be in the adjacent columns.
2) Each of the columns should have proper and appropriate heading and
appropriate unit of measurement for each element (e.g. sq.m., hectors,
Rs, Rs / p. month etc).
3) Selection of column heading and type spacing should be such as to
achieve a unity of presentation and the visual arrangement on page
should be attractive.
4) Sufficient space should be left in the last column for brief notes or
remarks if any, for essential qualifications, changes in data base or any
additional information. A statement showing instances of sales is
illustrated in the Annexure to this Unit.
3.9.3 Graphs :
Where the contents of schedules tables are solely numbers or figures
then it is possible and often advisable to present such information in a graph,
since this will have much more immediate visual impact on the reader.
Carefully prepared graphs permit the presentation of considerable amount of
data in an easily and quickly understandable or comprehensible form,
enabling the reader to arrive at conclusions which may not be possible for him
by mere reading of numbers. A graph clearly shows comparative changes in
one or more variables, shown in carefully selected colours or notations
against one variable (often time), usually shown along horizontal or ‘X’ axis,
other variables being shown along the vertical or ‘Y’ axis.
In preparing graphs, the scales are critical. It is necessary to satisfy two
criteria viz.
1) The scales must be large enough to permit various lines to be
distinguished over the relevant period of time, and
2) The scales should not result in gradients which create wrong or false
impressions as regards the relationship between two variables. This
happens if disproportionate scales are chosen for variables shown
along vertical (Y) and horizontal (X) axes.
3.9.4 Bar Charts and Pie Diagrams :
Vertical or horizontal bars in Bar Charts are useful in showing
comparison between variables of quantitative changes in variables over the
relevant period of time. In this case also the colours or notations representing
variables need to be chosen carefully.

48
 Pie Diagram is used to show percentages, for example percentage of
allocation of resources, percentage of workers and non workers, percentage
of workers in different sectors of economy or categories of employment,
percentages of receipts and expenditure etc.
3.9.5 Plans and Maps:
Location map, Area descriptive map, site plan, building plans and floor
plans etc. are used for description of land and accommodation, and their use,
all of which help summarily to describe location, area, accommodation etc. in
the text and simultaneously understand it clearly and quickly.
A plan showing instances of sale and rentals is the most important and
should accompany every valuation report. It helps in:
(a) Comparing various instances in respect of locational factors, rates of
prices or rents per unit area, dates of transaction etc., at a glance.
(b) Thereby help in arriving at some conclusions.
Care should be taken to show such data in respect of all the instances
of sales and rentals very clearly, distinctly and without mixing or jumbling it,
with long lines and arrows. Showing details of instances of rental and sales as
nearer to the locations of concerned properties on plan as possible would help
in avoiding such jumbling.
Standardisation of plans -
It is necessary to have some standardization in the presentation of
maps and plans. Margins should be adjusted about 4 cms on the left side and
2.5 cm on the other three sides. These margins should be marked by bold
lines. Further an extra space of about 15 cm to 20 cm, depending on the size
of the plan / map should be left on the right hand side, beyond the 2.5 cm
margin, for writing the following particulars.
1. Annexure number in the right hand top corner.
2. Title of the report (i.e. valuation of C.T.S. No.… of …. etc.) and sub-title
identifying the information and data shown in the plan / map. These
should be shown in about 1/3rd of space at the top.
3. In 1/4th of the space at the bottom of the said strip should be shown (a)
job number the year, name of the firm or valuer etc. and (b) North line
and scale above the job number etc.
4. The legend or references, with colour code or notations etc., should be
written in the central space of the strips.

49
 Colour coding or notation is very important in marking on the
plan / map several interest in the land, various rights involved, different
land uses and operations, distinctly showing instances of rentals
instances of sale and the property to be valued etc. etc.
5. The findings or observations / conclusions, if any, of the plan / map
should be written in the space below the plan / map proper, above the
2.5 cm. margin at the bottom and not in the above space of 15 to 20
c.m.
3.9.6 Photographs :
Photographs are the most underrated supporting material. However
photographs give very clear idea about the property to be valued and its
surroundings and also about the state of maintenance and repairs.
Photographs also add to the impact of the report and form permanent record
showing the property and its surroundings exactly as on the day of taking the
photographs. The caption on the photograph should identify what is shown in
it and should also identify the point from which the photograph is taken along
with its direction, which should also be shown on the plan / map where
possible. Care should be taken to ensure that the surroundings of the
property, with land marks if any, are seen in the photograph so as to avoid
any dispute about its identity. Many cameras have now the facility of recording
the date and time of the photograph. It is also advisable that the photograph
should bear, at its back, signature of the photographer with date and time.
3.9.7 Other Supporting Materials
These include copies of relevant public documents such as
administrative orders, planning permissions, valuation lists, Development
Control Rules, Building Preservation orders etc. as also private notices, legal
documents relating to the property under valuation including lease deeds and
tenancy covenants regarding rent, internal and external repairs etc.
The reports of specialists, if any, also form supporting material and
should be appended to the report as they have been received without making
any change in them or without paraphrasing them or their précis.
3.9.8 Documentation :
Documentation is often neglected. It is however essential for protecting
the writer of a report against plagiarism (or breach of copyright) and to ensure
that reliable information is used. Every supporting material including
statements, tables, schedules, graphs, diagrams, charts, plans, maps other
appendices etc. should mention the source of information in the foot note. The

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 integrity of report writers is proved with the use of footnotes and other
documentation crediting the sources of information.
3.10 THE GENERAL FRAMEWORK OF VALUATION REPORT :
The general framework of the text of the main report, with headings
and sub headings of paragraphs is given below as an example. The details of
the information and data, and consequently the description, analysis etc. will
vary according to the purpose of valuation and also according to the type of
property, which is discussed in the Study Units to follow. Headings and
subheadings for paragraphs should be clear and placed just against the
margin, with numbering, with numbering in the margins.
REPORT on
VALUATION of CTS No. / F.P.N. No…. TPS No. ….of ……… (Locality) …. (Town)
For the PURPOSE OF PURCHASE AND OCCUPATION
As on 31st January 2008.
1.0 INTRODUCTION :
The fair market value of the property bearing S.No. / CTS No. / F.P.
No. …… of T.P. Scheme No. …. of ……. …. (area or locality) of ….. (Village /
Town / City) is to be estimated for the purpose of purchase and occupation,
as on 31st January, 2008.
2.0 DESCRIPTION OF PROPERTY :
The property consists of a level piece of land, rectangular in shape,
having area of …… sq.meters and a three storied R.C.C. framed structure
building covering an area of … sq.m. It has frontage of …. meters on the main
/ access road ….. m. wide and has return frontage of …… m. along ….. m.
wide road..
3.0 TITLE AND OWNERSHIP :
It is a freehold property owned by Shri. ……………………………… It is
occupied by the owner himself (OR partly occupied by the owner and partly
occupied by lessee / tenant).
4.0 LOCATION AND SITUATION :
(Heading)
4.1 Locality :
(Sub. Heading)

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 Type of surrounding locality – Name of the locality, its distances from
the main railway station, bus station, main Central Business District etc., type
and status of the residents in the locality, type of development and density,
etc. as shown in the location map. (Annexure A)
4.2 Social Facilities and Amenities :
(1) Shops and Market – Type and Approx distances.
(2) Educational – Schools, Colleges etc. and distances (approximate)
(3) Medical – Dispensaries, clinics, hospitals etc. and their approximate
distances.
(4) Recreational – Gardens, play grounds, theatre, library, town hall etc.
and their distances (approximate) (Annexure A)
(5) Transport facilities – Local train stations, frequency of local trains, bus
station, bus routes and frequencies etc. as shown in the area map
(Annexure B)
4.3 Utility / Civic Services available : (i) Water supply, timings and duration (ii)
drainage, (iii) sewerage, (iv) electricity, (v) street lighting (vi) arboriculture and
environmental aspects (vii) arrangements for solid waste disposals (viii)
communication facilities – post and telegraph office, telephone exchange,
cyber café etc.
5.0 BUILDINGS :
5.1 General –
Total built-up area, F.S.I. consumed and balance F.S.I., gross built up
area, common areas, carpet area i.e. usable floor space and its divisions etc.
Main building and its use, subsidiary buildings and their use etc.
5.2 Main Building -
5.2.1 Engineering Aspects:
1. Type of construction and structural stability.
2. Structure – Foundations, walls, roof, floor, doors, windows, fixtures etc.
specifications – class of construction.
3. State of maintenance and repairs, annual cost of repairs, future life
expected.
4. Immediate repairs, if any, and estimated cost thereof. (Annexure C)
In case of factory buildings only.
5. Machine foundations and layout of machines

52
 6. Loading capacity of floors
7. Trolleys, Gantries etc.
8. Usable heights
9. Roof, North light, Lighting arrangements etc.
5.2.2 Architectural Aspects –
1. Front elevation, façade etc.
2. Design, arrangement of rooms and convenience. Areas and height of
rooms including bathrooms and toilets.
3. Light and ventilation
4. Common areas, staircase and lift, other facilities.
(Annexure D: Building Plans)
(Annexure E: Statement of
Accommodation / Floor Areas)
5.2.3 Utility Services –
1. Water Supply, plumbing, wash basins etc., type and quality of fittings
and plumbing.
2. Sewerage.
3. Electric supply, type and quality of wiring, fittings and fixtures like fans,
geasers etc.
4. Solid waste disposal - arrangements for -
5. Fire fighting – special importance in case of factories.
6. First Aid – in the factories.
5.2.4 Maintenance and Repairs –
Describe the state of maintenance and repairs. Immediate repairs, if
required, should be pointed out with cost thereof.
5.3 Subsidiary Buildings: Out houses garages, canteen etc.
Details as per general aspects (5.1), Engineering aspects (5.2.1) and
Architectural aspects (5.2.2) services (5.2.3) and maintenance and repairs
(5.2.4) but in brief.
Open Spaces within the Property –
1. Garden, Landscaping and Open Spaces around the main building.
2. Parking and other facilities like swimming pool chowkidar etc.

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6.0 ECONOMIC ASPECTS
6.1 Income: monthly rent, actual and fair estimated rent, gross annual rent.
6.2 Outgoings –
a) Annual cost of maintenance and repairs, b) Municipal taxes
c) Service charges, if any d) vacancies and bad debts,
e) cost of rent collection,
f) Insurance,
g) Other outgoing if any.
6.3 Net Annual Income : Statement showing net income (Annexure F)
7.0 TRAFFIC AND TRANSPORTATION : (In case of Factories)
7.1 Facilities for transport of raw materials and finished goods by road and by rail.
7.2 Loading and unloading facilities,
7.3 Parking, Weigh Bridge etc.

8.0 LABOUR MARKET (In case of factories)

Availability of skilled and unskilled labour, labour – tendencies i.e.

cooperative or un-cooperative, strikes etc.
9.0 TOWN PLANNING :
9.1 Use – Present use and permissible and potential use.
9.2 Planning Proposals – Affected or benefited by proposals, if any, its nature and
extent.
9.3 D.C. Rules – Permissible F.S.I., permissible ground coverage and height,
marginal open spaces etc. and other factors influencing market value of a
property.
10.0 LEGAL ASPECTS :-
Tenure and unexpired period of lease, etc.
Easement rights, tenancy rights and other legal encumbrances like
mortgages and other charges.
11.0 VALUATION :
11.1 General –
Fair market value of the property can be estimated by any of the three
approaches to valuation as stated in paras 3.2.5, 3.4.5 and 3.7. In this case,

54
 since the data regarding instances of rentals and sale of similar comparable
properties in the vicinity are available, the fair market value of the property
has been estimated by Income Approach.
11.2 Estimation of Fair Market Rent and Net Income
1. Comparison with properties in instances of rents, either by direct
comparison or by weightage system. Each of the instances of rentals to
be discussed in separate sub paragraphs and fair market rents for the
property under valuation and properties in the instances of sale to be
estimated by comparison.
2. Estimating Net Annual Income of properties sold and property to be
valued by deducting annual outgoings from gross annual income in
case of each of the properties. (Annexure G)
11.3 Analysis of Instances of Sale: Capitalisation Rate or Rate of Interest.
1. Finding out Y.P. (Y.P. = Sale Price ÷ Net Income) and rate of interest
and its range – summary findings of statement showing instances of
sale.
2. Comparison of rates of interest yielded by properties sold with
economic indices as on the date of sale transactions and
3. Estimating fair rate of interest and Y.P. as on the date of valuation e.g.
31st Jan. 2008 in comparison with economic indices as on 31.1.2008.
Annexure H: Statement showing instances of sale.
Annexure I: Plan showing instances of sales and rentals.
Annexure J: Graph showing economic indices and rates of interest
yielded by properties.
4. Past valuations, if any with dates.
12.0 CONCLUSION, OPINION AND ADVICE (IF ANY)
Conclusion about fair market value. In case of Income Approach – Net
Income (para 6.3) multiplied by Y.P. (para 11.3.2) less cost of immediate
repairs and / or other liabilities, if any.
NOTE: The above illustration is only a guideline regarding arrangement of
paragraphs in a narrative text of a valuation report and relevant points may be added
and irrelevant aspects may be deleted as per requirements of each case. It has
already been stated that since the collection of information and data will vary
according to purpose of valuation and the type of property to be valued. The
arrangement of the report, description and analysis will vary accordingly.

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13.0 FORMAT REPORT :
Many Banks and Financial Institutes require valuation reports in
Formats prescribed by them. Such formats hardly leave any scope for any
explanation about logical reasoning leading to conclusion and value opinion. It
is therefore advisable to append narrative report to such format report with a
view to provide necessary protection to a valuer.
****************
Exercise:
1. What are the five parts of a valuation report? Write a letter to your client
forwarding a valuation report prepared by you as per instructions received
from him.
2. How will you decide what information and data should be collected for
preparing a valuation report.
What care will you take in stating or reciting the facts, information and data in
a report and why.
3. What are the sources of information and data required for the purpose of
preparing a valuation report.
How will you collect and verify the instances of sale of comparable
properties.
4. What care should be taken in conducting inquiry on site? What are the basic
rules to be observed for making such inquiry
5. What are the supporting materials? What is the importance of supporting
materials for a valuation report.
Prepare a form of statement showing instances of rentals.

56
TITLE REPORT ON VALUATION OF C.T.S. NO. ………. OF ……… VILLAGE ………. CITY ….. ANNEXURE ….
FOR THE PURPOSE OF …………… AS ON 31.01.2008

SUB STATEMENT SHOWING INSTANCES OF SALE

TITILE
Sr. No. Date of C.T.S. No. or Area Consideration or Rate Rate of Fair Gross Annual Net Y.P. Rate of Remarks
(Date Sale F.P. No. Sold Price Rent Annual Outgoings Annual Col. 5 ÷ Col. 10) Interest
Wise Rent Income
Only)

Sq.m. Rs. Rs./sq.m. Rs/m2/month Rs. Rs. Rs.

1 2 3 4 5 6 7 8 9 10 11 12

Source : 1)
2)
Note: Y.P. in Column 11, may be Single rate or Duel rate, depending on perpetual or terminable income

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