On valuation surveyors

Determination of, and hence reliance on well assessed land/property market values/prices is not new. This has helped humanity through the ages to undertake fair property transactions, avoid conflict and in essence, this has anchored world development over time.

 The existence and role of a valuation surveyor has suffered the worst wrath of misconception and misunderstanding from the other real estate market players.

This hasn’t even spared fellow professionals. It has been commonplace to find them being referred to as; ‘evaluators’, ‘land valuers’, ‘property evaluators’, ‘surveyors’ etc.

Over my career, I have constantly encountered an intriguing question, ‘what do you valuers do exactly?’. This is an interesting question, especially when it comes from one who is expected to be a direct user of valuation services.

There are several purposes and scenarios prevailing in the land and property market, for which a valuation surveyor’s opinion may be sought.

Among common cases are; sale, purchase, secured lending (mortgage/banks), book purposes (accounts/auditing), rental assessment, property rates assessment by local governments, compensation (compulsory land acquisition), insurance (reinstatement), development appraisals, premium and ground rent, stamp duty (upon land office transfers) among others.

Each of the above purposes should be treated on its own merit. For instance; for mortgage valuations, the focus is on; whether the property represents sufficient security for the amount of the loan sought, and at how much can it be sold at the shortest time possible in case of default.

On the side of ‘sale’/’purchase’, the opinion represents extensive marketing and patience by the seller to wait for the best deal. Here, you will neither be working in the ‘sellers’ nor the ‘buyers’ market.

Value, worth, price and cost

There is nothing like the ‘one value fits all’ scenario. The property value must relate to the purpose that it was instructed for.

There is a common practice for market players to base on what they used to construct their buildings or where they bought the materials to dictate what its market value should be e.g. I bought these tiles from South Africa, imported these fittings from China, Italy, Germany etc.

Those who have the awareness or willingness to consult a valuer may for instance after obtaining a value opinion for sale, assume that even valuing for secured lending, the same will be returned.

The valuer’s role here is to position the land/property in the prevailing market given the conditions that govern the specific purpose for which the valuation was sanctioned. So it is untrue that a valuer ‘gives’ values. Rather, a valuer returns what the market provides under normal circumstances.

Worth originates from an individual purchaser’s perspective. According to the red book; worth is perceived as the value of property to a particular owner, investor, or class of investors for identified investment or operational objectives.

 Quite often, a valuation surveyor operates at the centre of ‘rope-pulling’ by the market participants, each tussling to achieve their objectives. Bankers want to give/dish out loans to achieve their targets. Borrowers want to obtain loans at whatever it takes, with their focus on getting as much money from the bank irrespective of whether the availed security ‘weighs to the standard’ or not.

Once a valuer’s interpretation of the market falls short of what any of the market participants targeted, frustrations ensue. Several bankers, especially those directly involved in managing clients’ loans would possibly ask, ‘why are you valuers arrogant? Rigid?’ ‘Have you even ever built a house?’ Or ‘even placing a single brick in your life?’, ‘even ever bought a plot?’.

In an open property market, prices may change (fluctuate) day and night.

A valuer is expected to give a regulating opinion; sieving through the buyers’ market, sellers’ market, and sometimes the special participants (sellers or buyers) for particular property/locations.

Moses Batanda Mubiru is a registered valuation surveyor  

X: @MubiruM05953701