3 Key Aspects of a Property Valuation Report
Are looking you for property valuation in Kisumu or any other place and wondering what to expect in the report? Before we look into the aspects of property valuation in details, we can look at the meaning of property valuation.
In technical approach, a property valuation is establishing the present worth of future benefits expected to be derived from the property. In simple explanation, property valuation is the way to get to know the current value of your property.
When contracting a valuer, there are certain things which you consider when a report is given to you or even before a report is given to you.
- Who placed the instruction?
- Purpose of valuation
- Identification of the plot or property
-Map from lands office
Let’s look at these aspects of a property valuation report so that next time you seek the services of a property valuer in Kenya, you know what to expect.
- What placed the instruction?
It goes without saying that you cannot get a valuation done on any property without someone issuing instructions to get a report done. The importance of this instruction is that it clearly tells who is liable to meet the instruction cost. So if you want to get a valuation done, ensure it’s done for you and therefore it’s you to meet the obligation that comes with it. If a friend wants valuation report, let them issue instruction or have an arrangement where they fund you to place an instruction.
Any of the property valuers in Kenya will rely on an instruction order to execute an assignment. It’s the same instruction order which will be a basis for invoicing and payment.
- Purpose of Valuation
Whenever you seek for property valuation, you must be clear in your mind why you need valuation done. There are several reasons why you can order for a property valuation.
Collateral: Real estate assets are to be used as collateral for loan facilities. A bank or a financial institution is likely to identity for you a property valuer to value your property and report back to them on the value.
Mortgage: Where they are to extend mortgage loans for the acquisition of property. Here the financial institution advancing the mortgage will identify a property valuer which they had pre-qualified to value your property and advice on the value.
Disposal/Sale/Purchase: This valuation is mainly carried out using the sales comparable approach (market evidence approach) to determine the selling price or purchase price. This can be ordered by either the buyer or the seller. The seller will want to be advised on the right value so as the set the price selling price. The buyer will use the valuation to make judgment on whether the asking price is reasonable and use it as a guide to place an offer.
Insurance: Valuation for insurance properties is carried out to determine the insurance payable for an asset. This is likely to be ordered by the insurance company but even the property owner can order for a valuation to have an idea of the value of his/her property.
Rental Assessments/valuations: Property Valuation in Kenya for rental assessment is carried out to determine the rent chargeable for rental spaces.
Book/Audit/Balance Sheet: This is carried out by companies or institutions to determine the value of their real estate assets for the purposes of their annual financial report.
Taxation Purposes: Local Taxation (Rating Assessment) with regard to assessing the Unimproved Site Values for rates calculation.
Merger and Acquisition: Merger and Acquisitions of businesses and companies to determine the value of the assets.
Compulsory acquisition: Compulsory acquisition is the power of government to acquire private rights in land without the willing consent of its owner or occupant in order to benefit society. Valuation for compulsory acquisition is carried out to determine the value of land and developments that are to be acquired by the government for the designated project.
Stamp Duty Purposes: Valuation for stamp duty purposes is carried out to determine the revenue collected from the sale of a property.
- Identification of the property
This is very important. The report should be able to identify the property so clearly that even someone who has never been to the property is able to use the report to identify the property. Any property valuer in Kenya who is working professionally will ensure that report identifies the said property without doubt. This is done with the help of the following;
The pictures must cover all aspects of the property. You should be able to take the front, back and sideway views of the property. This will enable whichever person who approaches the property to identify it. If it’s a building, you must capture the name very well. If possible, you should be able to capture the building along with any adjacent building to it.
- Map from lands office
The map assists in identifying it from the lands registry. It shows the ends of the property. It can help you measure the size of the property. With the map, you can use the roads, rivers, or any water body to locate the property.
If there is a road passing in front or at the back of the property, the map should be able to indicate that. Any alterations to the property like subdivision will also be seen in the map.
- Google Coordinates
Google coordinates assist in identifying a property with ease. Any land valuer in Kenya will use Google coordinates to pick the various corners of the property and map it out on Google map so that the shape of the land on the ground is clearly capture on the map.
Google coordinates are usually captured in Latitudes and Longitudes. But you can also capture them in Universal Transverse Mercator or UTM. It is a geographic coordinate system which is used to identify locations on earth in meters, as measured in the Northern Hemisphere going North and East from the intersection of the equator and a central meridian assigned to each of 60 longitudinal zones around the earth.
This is also something which assists in identifying a property. The landmarks here include schools, hospitals, rivers, lakes or roads. You can identify the property by measuring the distance from the property to the identified landmark and how you approach it from the landmark.
- Search at the lands office
How will we confirm that the property is in the name of the said person? Its through conducting a search from the lands office. The search will also reveal other things such as the size of the land, nature of the title, any encumbrance on the title and so on.
Clearly, you now have a good picture of what should be in a professional property valuation report. Are you in need of a property valuer in Kenya or any region within Kenya like Nairobi, Kisumu, Nakuru, Eldoret, Kakamega, Kitale, Kericho, Kisii, Bungoma, Busia, Siaya, Homa bay, Migori or anywhere in Kenya? Talk to West Kenya Real Estate Ltd. West Kenya Real Estate Ltd is a property management and valuation company with so many years of excellent service.