The Challenge of Under-Qualified Valuation Advice in The Caribbean
One of the Key Challenges that the Users of Valuation Reports have in the Caribbean, Particularly for Banks, Lenders & Financiers, who may need to Rely on Locally Sourced Property Valuations for Informing their Lending Decisions, is their Access to Suitably Qualified, Competent & Experienced Valuation Advice.
A Qualified Expert Review of a Property Valuation Report can be the Solution to this Challenge.
We’ve set out below the Key Benefits to Having a Property Valuation Expertly Reviewed:
1) Compliance with International Standards
Does the report content comply with, and meet with the Minimum Content of a Report,
Per RICS Global Standards, and International Valuation Standards (IVS).
This Does Not Mean the Valuer Has to Hold These Qualifications,
As the Report Content Can be Held to These Standards,
Whomever has Written the Report.
2) Test Valuation Techniques are Appropriate & Accurate
Are the Valuation Approaches adopted by the Valuer Suited-To, and Appropriate for,
the Valuation Instruction.
Does the Valuation Approach Selected and Relied Upon
Reflect that of The Typical Market Participant.
Are the Calculations Consistent with the Data In the Body of the Report,
Are they Analysed In a Logical Manner and Mathematically Correct.e all the difference.
3) Assess Quality Valuations for Clients with No Internal Capability
Where Clients do not have the Internal Knowledge or Expertise to Review a Valuation Report,
on which they are being asked to place a Material Reliance.
For Lender Due Diligence and Loan Security Assessment,
Regulatory Audits, Internal or Independent Audit Reports
Support for Litigation or Court Proceedings,
Peer Review, and Client Quality Control.
4) Support Arbitration & Dispute Resolution
Arbitrators may Present Valuation Reviews for Consideration, In place of Formal Litigation Procedures, where two or more Valuations, with Varying Conclusions, can be at the Heart of a Legal Dispute.
Provide Additional Support when Submitting Valuation Reports as part of Court Proceedings to Take Possession
of Real Estate Held As Security, or Provide a Qualified & Expert Challenge To Reports Submitted by an Opposing Side.
5) Bolster a Valuation Report’s Credibility
The Reviewer Determines whether the Valuer has Examined all Relevant Economic and Market Indicators, considered all Elements of Comparison, and applied all Available & Appropriate Techniques, all within the specified Regulatory Framework.
Particularly Relevant to the Caribbean Islands, where Locally Based Expertise may be Under-Qualified, Inexperienced or Lack Competency to Value Complex or Specialised Property Assets
6) Manage Client’s Risk
Lenders & Auditors Want to be Confident in Placing Their Reliance on a Valuation Opinion, along with the Projected Income being Reported, when Establishing Under-Writing Confidence in the Loan-To-Value (LTV), and Debt Service Coverage (DSC) Ratios.
Requesting an Expert Review which Incorporates a Sensitivity Analysis Better Informs your Decision Making, & Quantifies Potential Down-Side Risks.
A Review can Identify if the Description of the Property may highlight potential Property Specific Risks, associated with The Use, The Construction or The Design of the Property.
7) Testing Reasonableness
Provide a Test of Reasonableness for the User,
Given their Agreed Intended Use & Purpose of the Valuation Report.
Confirm the Source and Quality of Data & Evidence being Relied Upon,
And the Market Research used to Support Valuation Opinions.
Review within a Market Context the Reasoning, Analyses and Conclusions
Being Presented in the Report, as well as the Assumptions,
Special Assumptions and Limiting Conditions.
