Property buyers and sellers should be aware of the following:
(1) Valuation is “more of an art” than a science”. The valuation of a property will more likely be LOWER if it is done for the buyer (or bank) and HIGHER if done for the seller. Valuers givew a
(2) Many, if not most, are not aware of the constraints imposed by the CEA Code of Ethics and Professional Service Manual on licensed real estate agents. The agent can only provide recent data on similar properties in the same vicinity. Agents cannot discuss issues beyond their knowledge and expertise (like valuation issues – fair value, market valuation, indicative value vs. market price vs. fair value, valuation methodologies).
(3) Valuers often just use the direct-comparison method as the main method of valuation. According to the SISV Valuation Standards and Practice Guidelines, valuers are encouraged to use additional methods of valuation as a cross-check to the main method of valuation. Many do not since it is not a requirement and this could lead to wrong valuation because it can perpetuate undervaluation or overvaluation.
