General Studies · Property Valuation

Consider the following statements regarding professional property valuation principles in the banking sector: Statement 1: The 'Valuation' of a retail property is essentially an estimate of the most likely price at which the asset would be sold in a competitive and open market under all conditions requisite to a fair sale. Statement 2: One of the fundamental principles of valuation is the 'Principle of Substitution,' which states that a prudent buyer will not pay more for a property than the cost of acquiring an equally desirable substitute property. Statement 3: In a 'Stable Market,' the market value and the book value of a retail asset are expected to be identical, and any deviation indicates a flaw in the valuation methodology. Statement 4: The 'Highest and Best Use' (HBU) principle requires the valuer to consider the most profitable use of the land, provided that use is legally permissible, physically possible, and financially feasible. Statement 5: For the purpose of bank lending, the 'Distress Value' is typically calculated as a fixed lower percentage (e.g., 80 percent) of the Fair Market Value to account for a quick sale during loan recovery. Statement 6: The 'Life of a Building' is determined solely by construction materials and is unaffected by maintenance or environmental conditions. Statement 7: A 'Valuation Report' for a bank must include a 'Non-Encumbrance Certificate' provided directly by the valuer after checking land records. Which statements accurately reflect the core principles of professional property valuation?