Defective Selection and Application of Valuation Data as the Cause of Valuation Inconsistency in Metropolitan Lagos, Nigeria

Abstract

There has been increasing criticisms of the ability of Nigerian valuers to undertake investment valuations in a reliable and consistent manner. The earlier studies have focused mainly on the range of disparity between either the sale prices and valuation figures or between the valuation figures of two or more valuers. This study however sought to examine the roles of training and exposure to valuation inputs/data often employed in investment valuation by the professional valuers plays in the disparity/variance of the valuation figures produced by the valuers in cases where two or more valuers may have cause to carry out the valuation of the same property(ies) at about the same time/period.

To achieve the aim of the study, the researchers employed quasi-experimental method whereby forty five estate surveyors and valuers with varying number of years in practice were sampled by requesting them to carry out valuation of twelve residential properties recently sold within Lagos Metropolis, the study area. The results of their valuations showed wide disparity/variance in the valuation outcomes between and amongst the valuers. These wide variance/disparity is traceable largely to lack of uniformity in the choice of valuation inputs employed by the valuers for valuation assignments and which has direct link to the training received by the respondent valers. The study concluded that there is the need by the Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) and the Nigerian Institution of Estate Surveyors and Valuers (NIESV)  to take up the responsibility of ensuring that for any Estate Surveyor and Valuer to qualify to carry out valuation assignment(s) such Estate Surveyor and Valuer must have undergone sufficient training and acquire relevant exposure to the art and science of valuation which will afford them opportunity of how to employ relevant valuation data and inputs with a view to curtailing the problem of disparity in valuations amongst the valuers.

Keywords: Exposure, Lagos Metropolis, Valuation accuracy, Valuation inputs, Training, Nigeria