Valuations and Surveys Quiz

Comprehensive valuations and surveys quiz covering lender valuations, RICS survey types, property assessments, and valuation outcomes. Test your understanding of property valuation methods, survey limitations, and lender requirements for property security.

Topics Covered: lender valuations, RICS survey levels, desktop valuations, reinstatement value, retentions, condition ratings, valuation outcomes, survey limitations, and professional responsibilities.

This quiz is specifically designed for CeMAP students, mortgage advisers, surveyors, and property professionals involved in property valuation and survey processes.

Valuations and Surveys Quiz

1. What is the primary purpose of a lender's basic valuation?

A) Assess property's security value for mortgage
B) Determine market value for seller
C) Identify any structural defects
D) Assess property's security value for mortgage and insurance

2. Which valuation method uses historical sales data without physical inspection?

A) Drive-by valuation
B) Desktop valuation
C) Estate agent valuation
D) Reinstatement valuation

3. What does a retention involve?

A) Requiring additional insurance
B) Retaining the mortgage offer
C) Holding back part of the loan until repairs are completed
D) Reducing the loan-to-value ratio

4. Who is contractually bound in a lender's basic valuation?

A) Buyer and surveyor
B) Seller and estate agent
C) Borrower and insurer
D) Lender and valuer

5. Which valuation outcome suggests a property is unsuitable for lending?

A) Rejection
B) Conditional rejection
C) Retention recommended
D) Downvalued

6. What is reinstatement value?

A) Renovation budget
B) Cost to rebuild the property if destroyed
C) Market value minus land cost
D) Estimated auction price

7. Which factor is not considered in a basic valuation?

A) Visible roof condition
B) Room dimensions
C) Hidden defects under carpets
D) Potential resale value

8. When might a desktop valuation be appropriate?

A) Buying an estate agent advertised property
B) First-time purchase
C) New-build property
D) Remortgaging a recently inspected property

9. What is the valuer's duty of care for inexperienced buyers?

A) Higher due to potential negligence claims
B) Proportional to the level of survey requested
C) Limited to lender requirements
D) Excluded by disclaimers

10. Which statement about valuation disclaimers is true?

A) They replace the need for surveys
B) They may not protect valuers from negligence claims
C) They have insurance coverage for accurate market value
D) They are legally binding in all cases

11. What does a RICS Level 1 Report focus on?

A) Market valuation
B) Insurance reinstatement cost
C) Basic condition of conventional properties
D) Detailed structural analysis

12. Which survey includes a valuation?

A) RICS Level 1 Survey and Valuation
B) RICS Level 3
C) Estate agent valuation
D) RICS Level 2 Survey and Valuation

13. What is a key limitation of a RICS Level 1 Report?

A) Does not inspect hidden areas
B) Excludes legal risks
C) Only for valuation
D) Only for freehold properties

14. Which survey is most suitable for older, non-standard properties?

A) RICS Level 5
B) RICS Level 3
C) RICS Level 2
D) RICS Level 4

15. What condition rating indicates urgent repairs?

A) 1
B) 0
C) 3
D) 2

16. Which survey type is cheapest?

A) RICS Level 5
B) RICS Level 3
C) Specialist damp report
D) RICS Level 1

17. What does a RICS Level 2 Report visually inspect?

A) Gas and electric systems
B) Foundations
C) Hidden wiring
D) Soil stability

18. Which survey provides legal recourse for negligence?

A) Auction report
B) RICS Level 1
C) Lender's basic valuation
D) Desktop valuation

19. What is not included in a RICS Level 1 Report?

A) Urgent repair advice
B) Construction type
C) Market valuation
D) Condition ratings

20. Which survey is designed for new, standard-condition homes?

A) RICS Level 3
B) Specialist structural report
C) Desktop valuation
D) RICS Level 1

21. What might a valuer recommend for minor defects?

A) Undertaking to repair
B) Full retention
C) Mortgage rejection
D) Lower LTV ratio

22. Which defect would likely require a specialist report?

A) Loose tile
B) Subsidence
C) Peeling paint
D) Crack in plaster

23. What is a lender's primary concern with property defects?

A) Energy efficiency
B) Future resale potential
C) Impact on security value
D) Aesthetic appeal

24. Which defect is most likely to trigger a retention?

A) Outdated kitchen
B) Small garden
C) Lack of parking
D) Major roof damage

25. What does a conditional recommendation involve?

A) Repairs or retentions
B) Higher interest rate
C) Mandatory insurance
D) Reduced loan term

26. Which factor could lead to a lower valuation?

A) New build
B) Evidence of subsidence
C) Proximity to schools
D) Outdated bathroom

27. What is not typically covered in a basic valuation?

A) Obvious structural cracks
B) Room sizes
C) Detailed electrical safety checks
D) Visible damp patches

28. Which report would identify unsafe wiring?

A) RICS Level 1
B) Standard RICS Level 2
C) RICS level 5 with electrical report
D) Specialist electrical report

29. What is the lender's stance on survey recommendations?

A) Advisers must not recommend specific surveys
B) Advisers must insist on RICS Level 3 for properties predating 1940
C) Solicitors cover survey costs
D) Lenders guarantee survey accuracy

30. Which defect rating indicates no action needed?

A) 0
B) 1
C) 2
D) 3

31. What is the main drawback of a desktop valuation?

A) Covers hidden defects
B) No guarantee of accurate market value
C) Relies on outdated and comparable data
D) No physical inspection

32. Which valuation considers forced-sale scenarios?

A) RICS Level 1
B) Market appraisal
C) Seller's valuation
D) Lender's basic valuation

33. What is a key difference between RICS Level 2 and Level 3?

A) Level 3 includes in-depth structural analysis
B) Level 2 excludes condition ratings
C) Level 3 always includes a valuation
D) Level 2 can mandate retentions

34. Which party pays for the lender's valuation?

A) Solicitor
B) Borrower
C) Lender
D) Seller

35. What is not part of a valuation report?

A) Comparable property prices
B) Tenure details
C) Furniture quality assessment
D) Reinstatement value

36. Which scenario justifies a RICS Level 3 Report?

A) New-build apartment
B) Recently renovated house
C) Freehold flat
D) 200 year old listed building

37. What is the valuer's role in a retention?

A) Specify required repairs
B) Costing breakdowns
C) Negotiate with the seller
D) Reduce the purchase price

38. Which factor does not affect reinstatement value?

A) Building costs
B) Mortgage size
C) Non-standard materials
D) Property size

39. What is a limitation of the RICS Level 2 Report?

A) Overrides lender valuations
B) Only for freehold properties
C) Does not inspect behind furniture
D) Excludes condition ratings

40. Which statement about valuations is true?

A) They are carried out by an estate agent
B) They include renovation quotes
C) They replace legal searches
D) They may differ from market value

41. What is the lender's priority in a valuation?

A) Security for the loan
B) Value for money
C) Future price appreciation
D) Energy efficiency

42. Which survey type is most comprehensive?

A) Condition Report
B) RICS Level 3
C) RICS Level 2
D) RICS level 5

43. What is not a valuer's recommendation?

A) Specialist report
B) Rejection
C) Renegotiate purchase price
D) Retention

44. Which defect would a RICS Level 1 Report highlight?

A) Faulty wiring
B) Soil instability
C) Asbestos presence
D) Visible damp

45. What is a coal-mining search used for?

A) Underground operations records
B) Verify property age
C) Check flood risk
D) Check for heave

46. Which valuation outcome requires borrower action?

A) Faster completion
B) Retention
C) Unconditional acceptance
D) Higher LTV

47. What is excluded from a RICS Level 2 Survey only Report?

A) Urgent repairs
B) Legal risks
C) Valuation
D) Condition ratings

48. Which factor reduces reinstatement value?

A) Historic features
B) Large plot size
C) High-end finishes
D) Standard construction

49. What is the primary risk of a desktop valuation?

A) Misses property condition issues
B) Overestimates land value
C) Excludes legal checks
D) Rushes mortgage approval

50. Which statement about RICS reports is true?

A) Level 1 covers hidden defects
B) Level 3 is most detailed
C) Level 5 includes valuation
D) At least Level 2 is mandatory for properites built before 1920