Ruth and Semesa were looking at selling their family house so that they could start purcahse another property which could cater for their growing brood. When they approached real estate agents and even interested parties, they were asked what was amount that the valuer had stated. This is where they were lost. Valuation was a foreign topic to them.
At a point in our lives, we realise that the we need a place to call our own or even that it's time for a change and to get a new place. Whether it is selling or buying a property, it is very important to get it valued.
Many have often wondered why we need to get the house or even land valued. Well for one thing - it will ensure that you get your money's worth and in the long run, it helps ensure that you have access to the finances needed to make your dream a reality.
Valuation is necessary for land and property control that allows for fair access to financial services as well allow for the resources to be utilised or accessed which will inturn sees economic growth.
The real estate industry is an important part of the Fijian economy as a strong economy leads to strong growth and an integral part of this growth is getting the proper value of your property or proper valuation.
What is valuation
Valuation is putting a monetary value on your property or taking into account the value of your asset. In terms of land or property, you will have to get licensed valuers to determine or put a price range on your property.
In a developing country like Fiji, it is very important to get the right value for your property because of various factors such as land based development like biofuel plants, factories opening, large scale farming for export or even the building of hotels/resorts. Also at times, the land needs to be valued as population growth and urban drift will see property demand increase. This will also see more people looking for places to buy.
For locals, if you want to take a home loan to purchase a property, the banks will first ask you the value of the land or house you are looking at buying. They will then refer you to their selected panel of valuers.
For investors, it is important to know the value of the land you are looking at leasing or property you are ear marking for your base/headquarters as this will also determine how much you will have to use in terms of investment seed money.
Process of valuation in Fiji
In Fiji, when accessing the local lending institutions, they have their own list of valuers. The same goes for other larger institutes like Fiji Development Bank, the Fiji National Provident Fund or FNPF or even Merchant Finance.
However, if you are looking at selling your property, real estate agents will advise you to either get an independent valuer or they will include valuation services in their overall costs.
Either way, they will refer to a list of valuers approved by the Valuers Registration Board - a statutory body of the Fijian Government.
The Fiji Development Bank or FDB is set up or mandated to provide financial assistance for projects that contribute to the development of the Fijian economy and which also improves the quality of life for the people in Fiji. They list the valid valuers in the country which banks and institutions refer to for valuations and in total, Fiji has 17 recognised valuation companies.
It is advisable to always consult the banks and use one of their valuers so that your loan to buy a property is not delayed. These valuers will then give their figure or estimation to the Bank and then based on this figure, a loan will then be given to you over a fixed period of time at an interest.
If you are selling your property, valuation will help you determine how much you can earn from the sale. However if you are buying a house, valuation will help you put a true picture on how much you need to budget.
For valuers, it is their job to put a price that you could realistically achieve if the property was sold. At times, the landower/property owner would want $1 million Things taken into consideration include both tangible and intangible aspects including the surrounding.
Some key aspects that valuers will look at include:
The layout of the building
Condition of the house
Number of rooms
Any renovations done to property
Location and closeness to essential amenities such as transportation, schools, health centres, shops, etc
Therefore, when you are looking at selling your house, always ensure that you do not overlook the small things such as incomplete renovation, the damaged bedroom door, the leaking sink, the dripping faucet or even the leaking roof. At times, the value of the property may be higher than the house itself.
The same applies for those that are buying a house, always do your background checks to see that the price the property is valued is really the price that should be set. You can also check whether other issues have been taken into account.
Valuers Registration Board
Valuation in Fiji is governed by the Vauers Registration Act 1986. This sets the guidelines for the registration and operation of a licensed valuer in Fiji. The Valuers Registration Board is mandated under the Act to oversee the operations of valuers and ensure that they operate fairly.
The Valuers Registration Board also looks at scrupulous dealings, colludings as well as complaints against valuers.
Chairman of the Valuers Registration Board, Doctor Abdul Hassan says that Fiji currently we have 51 valuers, registered under the Valuation Registration Act 1986. Most of them are in Fiji while others are overseas. Registered valuers in the country are employed in the public sector, statutory bodies or in private practice.
He further explains the process of carrying out valuation in the country.
"There are three conventional approaches for estimating the market value of real estate. First, is the income approach second is the sales comparison approach and the third is cost approach. Generally, all three approaches must use in a formal valuation. Each approach is in principle related to the other two. All three approaches can regarded as different methods of seeking the same final objective that is to estimate the market value. Wherever possible each of the three approaches applied to establish alternative indicators of market value."
Real Estate Agents & Valuation
Real Estate agents are allowed to provide valuation to their clients. Under the Real Estate Agents Act 2006 Section 57, every real estate agent or employee of a real estate agent shall, after seeking the consent of the principal (seller of the property) supply at his or her own expense, a valuation of the land ion question made by an independent valuer registered under the Valuers Registration Act 1986. This basically allows the real estate agent to get a property valued and provide this price to the client as many times, it is their clients request to have the property valued.
Therefore, before you take any step, always get a valid valuation of your property so that you will know teh worth of your asset.