In making decisions related to the real estate property, the property value plays a significant role and the property valuer too, who determines the right value of the property by collecting the data related to the house or subject property and previous sales history and make some calculative analysis to figure out the property’s actual value. But the irony is the task of the property valuer is not that easy.
The biggest challenge in the front of the valuer is when the owner or borrower is unhappy with the valuation figure when mortgage lender declares the property as insufficient security. As the amount of property valuation is vital to find the interest rate of the loan. They find the valuation is low as compare to their expectation. Thus the ‘valuation challenge’ that comes into the picture.
The reason behind the variation in property values – The property valuation is the matter of judgment. And judgment may vary though it is based on research, data collection and calculations. For example – It can be possible when for the same property two valuers find the two different values. Though this difference in property values for the same property can be narrow when enough property data is available & the market conditions is stable. It goes wide when the market condition varies and insufficient data is available.
The problem of uncertainty – First the property value is dynamic in nature. It varies and depends upon various factors like market condition, economic stability which fluctuates so much and lots of uncertainties are associated with it. This creates a challenge for the property valuer. Every time before evaluating the property value one has to study the current local market condition and economic stability of the country.
Problem with collecting the reliable data – The property value fully depends upon the data and evidence collected by research and previous sales record. Sometimes it is difficult to gather the data and find the right comparable. The lack of information or incorrect information puts the adverse impact on the property value and thus the challenges for the property valuer increases.
Getting overworked – The property valuers are being forced by the clients and their company to find the right value of the property quickly, which puts the pressure on the valuers to work more in less time. The difficulty is every property is different in its own and the finding comparable and value also takes time. To evaluate the property value in less time gives an invitation to the errors.
The task of the property valuation is the challenging task. It depends upon the geographical location, economic condition, market trend, and property type more. This all varies every time so each time property valuer has to investigate, study and research the information completely.
Being a client one should help the property valuer in searching the pieces of evidence, collecting the data and finding the comparables so valuer can determine the right value of the property.
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