I have been experiencing a very common challenge in property valuation, especially in a dynamic market like Dar es Salaam.
The perception of value is subjective, and clients often have their own expectations. With regard to reasons for Client Disagreements, I would wish to share with both Clients and practising Valuers why this happens and how you can manage these challenges:
Emotional Attachment
Property owners often have an emotional connection to their property, leading them to overestimate its value.
Market Fluctuations
The real estate market can change rapidly, and recent sales data may not reflect current market conditions accurately.
Differing Perspectives
- Mortgage seekers want high valuations to maximize loan amounts.
- Lenders want conservative valuations to minimize risk.
- Sellers want high valuations to maximize profit.
- Buyers want low valuations to minimize cost.
- Lack of Understanding:-Clients may not fully understand the valuation process and the factors that influence value.
- Incomplete Information:-Clients may not provide all the relevant information about the property, or surrounding area.
Strategies for Managing Client Challenges
Detailed and Transparent Reports
- Clearly explain the valuation methodology used.
- Provide detailed supporting data, such as comparable sales.
- Highlight the factors that influenced the valuation.
- Use maps, and pictures to help the client visualise the information.
Comprehensive Market Analysis
- Conduct thorough research on recent comparable sales.
- Consider market trends, economic conditions, and local factors.
- Explain how the market conditions have impacted the value.
Effective Communication
- Meet with clients to discuss the valuation process and address their concerns.
- Explain the limitations of the valuation and the potential for market fluctuations.
- Use clear and concise language, avoiding technical jargon.
- Be prepared to defend your opinion of value with data.
Professionalism and Objectivity
- Maintain a professional and objective approach, regardless of client pressure.
- Adhere to ethical standards and valuation guidelines.
- Document all conversations and data used.
Comparative Market Adjustment Grid
Using a comparative market adjustment grid, within the report, allows the client to see how you have adjusted for the differences between the comparables and the subject property.
Further Education
Offer to explain the valuation process to the client. Sometimes a lack of understanding is the root of the problem.
Consider a Second Opinion
In cases of significant disagreement, suggest a second independent valuation.
By combining thorough analysis, clear communication, and professional conduct, you can build trust with your clients and minimize disputes over valuation results.
