The benefits in getting your properties and assets valued are enormous, though few may not see the need to engage or consult a professional to do so. However, it may interest you to know that not only will a thorough assessment enable you make informed decisions and negotiating appropriately in any property dealings, it will also help to understand and stay abreast with current trends in the property market; not gambling your way through avoidable mistakes, particularly in the present day economic dynamics.
Before we go any further, there is need to understand who a Valuer is.
The Nigerian Valuation Standards (2019) defines a Valuer as an individual, group of individuals, or a firm possessing the necessary qualifications, ability and experience to undertake a valuation in an objective, unbiased and competent manner.
In simple terms, an Estate Surveyor and Valuer is an expert or professional who estimates, assesses and determines the value of assets (land, building etc.) at a specific time and for a given purpose; an expert in the real estate field, who is authorized to declare the worth of assets.
Now, one may ask “why do I actually need to carry out a valuation”? Let’s explore three essential reasons for carrying out a valuation, and its subsequent report.
1) Pre-Sale /Pre-Purchase Advice or Vendors Survey:
The valuation report gives a seller an independent and impartial analysis of a property, an added edge in maximizing sale price in line with open market trends. You also have a good control of the transaction processes. As a property owner, you will get to understand the condition of your property, prior to putting it up for sale, enabling you to resolve any minor defects that a purchaser may raise. It also encourages potential buyers to make quick decisions as due diligence has been carried out.
2) Appraisal or Feasibility and Viability Appraisal
An appraisal may be carried out to determine the best choice from various alternative development opportunities subsisting in your vacant land or property, thereby assuring a profitable investment before embarking on any project.
This is done to ascertain how intensive and extensive your property can be put to use for profit. A proper assessment will establish what is physically possible (in building design), legally permissible (in building codes), financially achievable (in expenditure) and maximally productive (in returns), among various investment opportunities, resulting in the right selection of the current highest and best use/value of the property.
The analysis includes cost benefit analysis, cash flow forecast, profit margins etc.
3) Insurance Process:
This valuation is done to validate the amount of coverage or financial protection that your proposed property require, keeping premiums at a proper level and establishing proof of the value of loss before a loss occurs, either by natural or manmade causes.
In other words, the report will be the basis for the subsequent determination of the insurance coverage, insurance payment, damage level and insurance benefit, and so it is important to accurately determine the value of the property.
There are numerous purposes for carrying out valuation, which is not exhausted in this article.
It is therefore advisable to imbibe the business culture of getting your property valued, before carrying out any financial transaction relating to property. It will aid you to maintain the right perspective and currency of your real estate dealings.
Nwamaka Vivian Ofoma is an Associate Member of Nigerian Institution of Estate Surveyors and Valuers (NIESV) and a registered Member of Estate Surveying and Valuation Registration Board of Nigeria (ESVARBON). She is also the current Honorary Publicity Secretary of NIESV, Abuja Branch.