As property professionals, we all know that valuation continually evolves, it’s a market sensitive discipline and anything that affects the market needs to be reflected in the valuations that support important lending and business decisions. If anyone is in any doubt how significant real estate valuation is, the recent property led global financial crisis provides us with a hard lesson.
The important role of valuation
Valuation, as a discipline, is a critical part of the global financial system and its stability. Valuations consist of a range of data that inform the investment decisions of governments, investors, lenders and providers of property services among others.
From a public benefit point of view, valuations help consumers determine the value of some of their biggest personal investments, such as buying a home or tax planning.
Choosing and using appropriate techniques is important, but a valuer’s relationship with the client and meeting the client’s needs is the way valuation fee income is generated. The way to manage this client contact and reduce risk is through following industry standards.
Confidence through professional standards
The profession is increasingly global, with the trend towards international standards continuing at pace, with recent standards such as:
◾International Financial Reporting Standards (IFRS)
◾International Property Measurement Standards (IPMS)
◾International Ethical Standards (IES)
◾International Valuation Standards (IVS)
◾RICS Valuation Standards (the Red Book)
Employers worldwide are adopting valuation standards to project confidence to their clients and are progressing the employees that can demonstrate solid understanding of these standards.
The ability to offer a consistent, objective and transparent approach provides a professional competitive advantage and reassurance that risk has been managed appropriately.
A focus on the Red Book (RICS Valuation Standards)
The Red Book is a practical tool that reflects the world we valuers and practice in today, the level of detail is greater than many other standards and every valuer (or user of valuation reports) should understand the best practice and adhere to them.
The RICS Red Book is the framework for delivering the International Valuation Standards through a series of guidance notes and practice statements to enable valuers to manage risk for themselves and their clients. Valuation is a litigious area, being up to date can help lower professional indemnity insurance premiums and prevent accusations of negligence.
The RICS Red Book (Valuation Standards) has just been updated for 2017 and the General Practice team at GSC Grays are fully up to speed with the revisions, such that we can continue to provide the very best valuation advice to professionals, individuals and businesses across our offices.
Please contact our Director and Head of Valuations & Surveys, David Cooper MRICS, who would be delighted to discuss your valuation and / or survey requirements.