Many a times, upon realizing the trade or profession of a new acquaintance, people tend to seek
immediate free advise and the author being a property Valuer, the question frequently asked to him is
“What is the value of my property in this location with such improvements”. This is one of the most
difficult conundrum for the valuation experts, not that they cannot do their work but as the expression
goes, “Gabbage In, Gabbage Out”, it applies in this respect since without proper instructions for one to
understand the context which the value is required, undertaking of the actual inspection of the subject
property and researching more, one will never get the correct value indication.
Valuation a Purposive exercise.
There is more to giving an educated scientific opinion on the value of an asset than what generally is
perceived. Firstly, valuation is fundamentally a purposive exercise and there are various reasons which
amongst them include; prepurchase or disposal due diligence, statutory and regulatory financial
reporting, performance measurement, monitoring portfolio strategy, mortgage origination, remortgaging
or re-pricing of mortgage loans, risk management, arrears management, non performing loans, asset
quality review, taxation for Capital Gains, stamp duty and estate duty. Valuation should thus be fit for
purpose especially in our constantly evolving difficult market.
Valuation instruction
It is thus imperative for a client needing a valuation to meet with the Valuer to discuss and agree upon in
writing certain details before the work commences, the information includes but not necessarily limited
to; identification of the subject property, the client and the Valuer, the purpose of the valuation, the
valuation date, bases of value adopted, nature and extent of the Valuer’s work which includes
investigations and any limitations, nature and sources of information upon which the Valuer will rely, any
special assumptions made, format of report, confirmation that the valuation is undertaken according to
International Valuation Standards (IVS) and a statement that compliance with these standards may be
subject to our local regulations and a statement setting out any limitations. This information is critical as
it enables the Valuer to produce a report that is professionally adequate for its purpose after necessary
investigations have been carried out.
There is need to take note that bases of value (standards of value) include market, rental, equitable,
investment worth, synegystic and liquidation value. The valuation standards allow for adoption of other
basis outside the stated.
Valuation Process
For a Valuer to undertake a valuation, the process involves agreeing on the terms of engagement with the
client, investigation (which includes inspection, analysis, market research and public database) data
handling and interpretation (processing and calculation, qualification and verification, analyzing) post
valuation process reporting (value generation and valuation report) and the main result of this process is
a single value presented in a report bearing in mind that the report is much more than just a value but
also the ultimate communication tool between the Valuer and the client, it provides the client with
independent written confirmation of the value of a property that is neither ambiguous nor misleading.
Valuation skill
Valuers fulfil a pivotal, complex and responsible role, operating as the interface between clients, financial
providers and holders of property assets. As such, a competent Valuer must possess a mix of
competencies: hard skills such as gathering data through investigation, inspection and research, tempered with analytical insight, the exercise of professional judgement and people skills. Understanding the client’s needs and expectations, and explaining the use and limitations of a valuation in a way the client understands and accepts, is an important part of the role. The exercise plays a crucial role in real estate related decisions. The generally expected competencies of a Valuer include the following; inspection, measurement of land and property, conduct rules and professional practice, client care, communication and negotiation, conflict avoidance and dispute resolution procedures, accounting principles and procedures, data management, health and safety, sustainability, team working, market interpretation and analysis and actual valuation
Regulated Profession
Valuation is a regulated profession superintended by Valuers Council under the Valuers Act. The manor
and form in which the profession is regulated in Zimbabwe is such that decisions to engage one is based
on anything else other than the fees to undertake the valuation since the fees is set in the appropriate
scale of fees.
The above draws attention to the fact that getting a value of your property is much more than a simple
question to a known Valuer. It actually requires much more and knowing that eliminates part of the
valuation conundrum which arises from inadequate instruction, lack of understanding of the skill required
and the process involved. It remains a fact, the engagement of appropriate professionals guarantee long
term savings and the benefits outweigh the cost associated with acquiring the service without abiding by
the best practice. Valuations requires hands on competent professionals who are equipped to adequately
provide valuable advise for decision making. (Source rics.org)
Mike E. Juru is the CEO of Integrated Properties. The views expressed in this column are his own and in
no way reflect the thinking of the various professional bodies and associations that he works with. Mike can be contacted on mejuru@intpro.co.zw
