CHALLENGES IN SECURING AND EXECUTING VALUATION BRIEFS IN NIGERIAESV Ilo Ndubueze Benneth

PRACTICAL PERSPECTIVE

Valuation is the Cornerstone of the Estate Surveying and Valuation Profession.

It is the exclusive preserve of practitioners in the field of Estate Surveying and Valuation. While other branches of the profession have become open to other practitioners, valuation remains the prerogative of Estate Surveyors and Valuers.

WHAT IS VALUATION?
Valuation simply put, is the science and art of estimating the worth of an asset. It is the price for which an asset will exchange hands in the market between two unrelated parties that have adequate knowledge of the market.

Valuation may be required for the following reasons;
a. Mortgage,
b. Insurance,
c. Merger & Take over,
d. Purchase,
e. Sales,
f. Rent,
g. Probate, etc.

Literature abounds that have dealt with the topic on Valuation. However, for the purpose of this paper, we shall be focusing on some of the challenges practitioners encounter in securing and executing valuation briefs.

SOURCING OF VALUATION BRIEFS
Valuation briefs are usually sourced from but not limited to;
a. Accounting firms,
b. Financial Institutions,
c. Insurance Companies,
d. Individuals,
e. Corporate Bodies,
f. Travel Agencies,
g. Government Departments,
h. Embassies.

CHALLENGES IN SOURCING
Most practitioners have the same modus operandi. With the glut of Estate Surveying and Valuation firms in virtually every corner in the Country, the sourcing of valuation briefs poses a challenge, considering that we have few briefs that are being chased by many firms.

Having been in practice for over twenty (20) years, some of the challenges in sourcing valuation briefs includes;
a. Lack of adequate knowledge of the importance of valuation. Most Nigerians think that valuation is only needed for bank facilities.

b. Lack of formal registration with financial institutions.

c. Undue and unprofessional demands from the source/sources’ representatives.

d. Dissatisfaction in previous assignments, from clients perspective

e. Unethical practices from practicing surveyors with regards to valuation figures.

f. De-marketing of colleagues

g. Incessant movement of personnel in the banking sector

CHALLENGES IN EXECUTING VALUATION BRIEFS
a. Lack of title documents

b. Unrealistic expectations from clients (some clients have usurped the role of valuers)

c. Access to the asset to be valued (in some cases – discrete valuation)

d. Inconsistency in size of site on ground as against what is on the survey plan/drawing

e. Insecurity

f. Lack of comparables and source of information for plant & equipment valuation

g. Reliable data

h. Fraudulent activities of some clients (Some in a bid to achieve high figures will get to any length to falsify documents, take the surveyor to different properties, etc.)

i. Payment and collection of fees

THE WAY FORWARD
a. Be Deliberate: Practitioners must be intentional in their effort towards sourcing. Without adequate effort, no result can be achieved.

b. Bank Listing: Every Estate Surveyor and Valuer should ensure that all requirements needed to be enlisted by banks are met. Efforts should be made to get retainership with banks (financial institutions).

c. Spread the Drag-Net: Efforts must not be limited to banks alone. Without any fear of contradiction, banks are the most regular source of valuation. However, surveyors should market insurance firms, accounting firms, companies, etc.

d. Advocacy: Estate Surveyors and Valuers must seize every opportunity to talk about what they do. Educate people on the importance of valuation.

e. Honesty and Devotion: Valuers must show integrity and demonstrate high sense of professionalism. Unethical conducts must not be practiced. Monetary inducement and gratification must be avoided at all cost. A client must not tell a Valuer the value/figure to return.

f. Avoid Delays: Executing valuation briefs and delivering reports must not be unnecessarily delayed. We must be swift in execution

g. Thorough Inspections: The facts, statements and assumptions in valuation reports must be based on what we see. No report must be done without proper inspections.

h. Acknowledgement/Fee note: All instructions must be formally acknowledged with a letter wherein the agreed fees should be stated. This must also be duly acknowledged by the client.

i. Liaising with other practitioners: There must be synergy among practicing surveyors where knowledge and information are freely shared. You may be surprised that a valuer in another firm may have all the information you are seeking. This will obviously save a whole lot of time.

j. Fees: The reason for being in business is to make money. A major challenge is getting fees for executed briefs. Most cases when a bank gives an instruction and insists that a valuer should not bother discussing the fees the fees before commencement of the exercise, if the facility is not granted, it becomes difficult to get the fees after the job has been completed. Fees should not be tied to facility.

CONCLUSION

As practitioners, we must therefore do the following;

• Ensure that instructions are properly documented.
• Ask and obtain advance payment for jobs, by so doing, you cut your losses if the facility is not granted or if the client decides to play funny.
• All reports must be submitted with forwarding letters, which must be dully acknowledged.
• More often than not, valuers should insist on payment before a report is released.