Most valuation assignments are for financing purposes, wherein the property owner ( or buyer ) applies for a bank loan and offers to charge the asset to the bank as security to the loan. However, valuers may be appointed for other, more challenging reasons that often require additional skills and experience.
Some of the reason include :-
- Funding - In consideration of granting an individual or company a loan or banking facility, the lending bank normally required ' adequate security ' from the borrower in the form of a property asset that it can foreclose and sell by auction in the even the borrower fails to repay the loan sum an interest. The bank normally require the property to be assessed by a professional valuer on its panel prior to granting the loan or banking facility, to make sure the security offered is worth more than the loan sum sought.
- Sale of property - Both a buyer and seller may want a professional opinion of property's market value before entering into negotiations. This is to ensure that the seller does not over-price the property, or that the purchaser does not under pay for it.
- Tracking property values - Some clients, especially the wealthy, may want to know their real nett-worth and for estate planning and strategic purposes, may want a periodic valuation of their assets.
- Stamp duties - When properties change hands, the Federal Government levies a tax known as Stamp Duty, payable by the purchaser or transferee based on the market value of the transacted property. Purchasers would require the transacted property to be valued in order to determine the market value for stamp duty payment.
- Family law settlements - In the even of divorce, incapacity, or death an to facilitate the equitable distribution of property assets, the affected spouse or beneficiary, or even the court ( if a legal tussle is involved ) would require the assets to be valued.
- Foreclosure - When a bank exercises its right to foreclose on a property in the event of default by the borrower, it would require the asset to be revalued to determine the ' reserve price ' prior to its sale by public auction.
- Land Acquisition - When the Land Administrator exercises its power to acquire private property under the Land Acquisition Act, the owner and tenant of such property may need to appoint a registered valuer to evaluate the amount of compensation damages they can claim from the administrator.
