Why estimated GDV is key even when lending against the property or land, not the development?

Video Transcript

There are five main methods of valuation. This one relates to the residual method of valuation. This entails a GDV, gross development value, and then making relevant deductions in order to get to a market value. So, if a lender is only lending against a piece of land or property with planning, and not the actual development or the actual development, this method of valuation needs to be carried out in both scenarios. As such, an estimated GDV needs to be provided to the valuer at quotation so they can understand the complexities and risk it involves.