What to know about real estate valuation
- By Chinelo Okafor
- March 2, 2021
- 0 comments
When a client requests a Valuation, I often wonder if they understand what they request or why they request it.
Most times they do this because they require it for a bank loan or the bank request it of them for the same objective, a bank loan. 80% of our clients’ brief originate for financial need purpose. Real Estate as an asset class lends itself for this particular purpose. It is good collateral.
However, does the client understand the purpose of why he must go to an authorized and certified valuer to get an issued report authenticating the said value of the collateral asset?
The valuation report issued is a financial advisory report and it must be viewed as such for all intent and purposes.
The intent of a certified valuation report is to confirm to you what your asset ought to command if put in the market at the particular date of reporting.
There is no specific market for real estate to be measured in order to have a predetermined market price. Through data, however, most owners believe they have an idea of what their property asset value should be and though they may have this subjective emotional method of valuation available to them, it is not enough for it to be held as a financial advisory opinion that can be used by a third party.
The role of licensed and registered valuers’
A licensed and registered valuers’ role is to authenticate market data, review fiscal and legal interest and then project the market value of your property which will then be tested in the market through its being listed.
However, financial lenders have to realize that there is a need to constantly revalue collateral assets on their credit books. All valuation reports are only valid for the period and date at which they are reported. A valuation report for bank lending purposes must be periodically reviewed to confirm the asset retains its collateral value.
A valuation report remains a vital document for any purpose it is required.
It is legal – evidence of a statement of financial strength, it is proof of market viability.
A certified valuation report will also most times adhere to the required International Standards or Local standards depending on which country you are based in.
If you have invested in real estate you will most probably need a valuation report soon, either for any of the following:
Health is Wealth, Your Valuer is your Real Estate doctor!
Speak to a Valuer today. Ismail and Partners is a company with registered and licensed valuers. If you need our valuation services, you can reach us on +234818763334 or email us at firstname.lastname@example.org