WHAT IS A PROPERTY VALUER?
Category Advice
As a registered property valuer (under SACPVP rules) for some time now, I find that there is still so much uncertainty about professional valuations (moveable and immovable property) as a career choice.
While some people think of valuers as 'estate agents' who present a selection of house sales to motivate what your house will likely sell for, others may think of valuers as the person the bank approaches to decide on the quantum of a mortgage bond over your asset.
My aim in this brief article, is to give readers a better understanding of what a valuer is and how one qualifies as one.
Background
I chose the property profession over law in my university days, when I changed 'course' to complete a BSc Honours degree in Property Studies. It turned out to be one of my better decisions and one that led to me qualifying as a property valuer. By completing my honours degree, I became eligible to register as a 'candidate valuer' with the South African Council for the Property Valuers Profession (SACPVP https://www.sacpvp.co.za/), South Africa's regulatory body for the profession. After gaining the required experience through working in the valuation field, I then attended the SACPVP's work school in Pretoria and successfully wrote the Professional Associated Valuer's exam.
Once qualified as a professional associated valuer, I could perform most valuations but with a 'restriction' whereby certain valuations still had to be signed off by my 'mentor'. Finally, I wrote the Professional Valuer's exam and qualified as a professional valuer.
What is a property valuer?
A property valuer is responsible for determining a property's value as at a certain date. This value could be the replacement value of the property, i.e. the cost of rebuilding all the fixed improvements on a property; or it could be the market value of a property, i.e. the price for which a property would exchange between a willing buyer and willing seller, in an 'open' market. The date of valuation is pegged and can be an historical date, i.e. for an appraisal where the date of death is usually the date of valuation; or it could be 'current', i.e. using current market data as a basis.
Depending on the type of property (eg. Commercial, residential, agricultural, 'special') different valuation methodologies are applied, which make use of important data. In determining a property's value, the valuer is required to research all the salient details of the property (legal description, erf extent, purchase date, purchase amount, extent of improvements, zoning, etc.), determine suitably comparable data and make well substantiated deductions to assign a value to a property. The relevance of data collected is vital for use in the valuer's valuation calculation.
Why do I need a professional valuation?
There are instances where an estate agent's opinion on your property's market value will suffice but this is generally where you are exploring whether you want to sell your property or not. The following are some instances that generally require a professional valuation:
- Deceased estates require an appraisal (the valuer needs to be an appraiser, as appointed by the High Court)
- Financial reporting
- Insurance valuation (replacement cost valuation)
- Feasibility study
- Litigious matters, eg. Divorce, lease disputes, seller/buyer disputes
- Rental reviews or new rental determination
Where an estate agent's valuation generally uses deeds office information of a large number of sales in a radius around the subject property and applies a likely value to the subject property based on its extent, a property valuer analyses these comparable sales in more depth to discard those sales that are not suitably comparable to the subject property. Reasons for sales being poor comparisons can include that the sale included a vacant piece of land where the subject property has a double storey dwelling on it, the sale could have a recently constructed dwelling where the subject property has a completely unrenovated dwelling, the dwelling sizes could differ greatly or the position of the properties could vary so greatly as to have too significant an effect on the property's value.
What do I love about being a property valuer?
The variation in valuation briefs received, means that I never do the same valuation twice. The subject property changes, the date changes and the purpose for which the instructing party requires the valuation changes. This means that the market research applicable for one valuation brief won't be directly applicable to another property given the changing inputs. Valuers need to keep abreast of property market trends, be able to speak to experts (brokers, estate agents, farming experts) in specific nodes and be skilled at presenting a logical motivation in the form of a professional valuation report, in determining a property's market value.
Being a property valuer has allowed me to consider properties from different angles, as a landlord, a seller, a potential purchaser, a developer and as a tenant. The combination of skills which include economics, construction, property management, relevant property law, report writing, photography and communication skills make property valuations a fulfilling profession.
Author: Nina Vass