Stakeholders in the real estate sector have called for the implementation of international standards in their business.
They make the call at this year’s conference of the Nigeria Institution of Estate Surveyors and Valuers (NIESV), Lagos State chapter, with the them; E- Standardisation of valuation reports in Nigeria.
Senior Partner/Chief Executive Officer of Nelson Thorpe Alonge Chartered Surveyors and Estate Valuers, Victor Alonge said estate valuers worked in a market that “shadows” other investments.
He said the regulations and methods of property valuation were a subject of interest in and outside the profession, particularly during recession when property values fall.
This, he said, was justified based on the key role valuation plays in ensuring financial stability.
Alonge said in the absence of any  standards, valuers had   a lot of “flexibility” in calculations and approaches.
“It is the exercise of this unguided ‘flexibility’ by valuers that results in negligent property valuation practices with accuracy and integrity issues,” he noted.
He said it was not surprising that  appropriate valuation standards and their regulations had become vital to promoting and sustaining public confidence in the profession.
Uniform valuation standards, he further explained, help to reduce investment risks, boost financial reporting and provide an approach to portfolio and asset valuation.
He, however, warned that the failure to capture the value of underlying assets of private and public sector entities could have severe global consequences not only for investors and shareholders, but also for the public.
“Valuation underpins financial decisions and forms the basis of a range of market activities. It is, therefore, important that valuation is recognised as a coherent and skilled profession. The profession must, however, continue to ensure that it is fit for future challenges,” Alonge said.
He noted that property business underpined a major proportion of financial decisions. This is why the valuation report of a property is one of the most-important requirements that guide decision-making in selling a property, he said.
To achieve this, Alonge said valuation reports helped to evaluate the property, and the buyer, and the seller, in understanding its market value.
“A valuation report thus helps the parties in negotiating the price to be paid for the property. Also, if you are getting a loan from a bank to purchase a property, you will have to submit a  report to the bank. This is required by the bank to ensure that even if the loan amount is left unpaid, the outstanding amount is covered by the value of the property,” the chartered valuer said.
Property valuations are, he went on, commissioned for the following reasons: to understand the difference between value and price, make an objective assessment of the asset;  remove personal attachment from  decision making and prevent funding shocks, among others.