The last chapter of this research generally contains the conclusion and recommendations for the valuation inaccuracy which is the main issue of this research. Recommendations in this research more focus on determine the best action for solving the problem of inaccuracy valuation. Such recommendation will be suggested to BOVEA, RISM, PEPS and academic institutional. For the conclusion made in this chapter, it will determine whether the research project meet their aims or objectives. Such objective of the research has been explained in previous chapter. The conclusion or any recommendation made will determine the feasibility of this research to be used as references or not by many interested parties involved.
The previous chapter had elaborate situation of inaccuracy valuation in residential properties. Even though in Malaysia there no yet research detail about this study but outside country already had done this research a few years ago. This shows the issue of inaccuracy is going concern by the valuer around the world. The country had did research for inaccuracy are Australia, Nigeria, United Kingdom and else.
5.2 Objective 1
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The aim of this objective is to investigate the perception among of Malaysian valuer on the issue of inaccuracy valuation in residential properties.
From the previous chapter 4, the data analyse that the Malaysian valuers faced inaccuracy on their valuation. The degree of accuracy level use by them is about 85-100 percent. These mean the acceptable margin error in valuation by the valuer about range 0-15 percent only. The range more than 16 percent is not acceptable in accurate of valuation. Besides that, the factors of inaccuracy valuation had been examined by the valuer based on their working experience in this field.
The result from previous chapter shows factors listed by researcher to valuers about the accurate valuation and has been agrees by majority of the respondent. The factors of inaccuracy has been listed in Chapter 4 will be related to others factors that researcher has explain in previous Chapter 2.
5.3 Objective 2
The aim of this objective is to discover the major factors and possible remedies.
The second objective of the research more focuses on the major factors and recommendation action that can be taken by the responsible bodies for solving the inaccuracy valuation. This objective only concentrates on the valuer who registered valuer, valuer executive and assistant of valuer executive and responsible bodies to take the action. Such recommendation is selected from the possible suggestion that gives most positive result from previous chapter.
The sugesstion action also will include the action suggested by the respondent directly through the questionnaire form. Such sugesstion action is taken from the last part of questionnaire which is possible opinion choice to solve the problem. In this part, the respondents are being asked about their opinion regarding the best action that can be taken.
5.4 Major factors affect to the inaccuracy valuation.
Based on the data analysis, there are four sub-group had been identified as shown by diagram below.
The most of factor ranking is lack of market data/evidence. Data evidence is essential information needed by the valuer. The value of property is defending on the data analysis from the data evidence. Usually, the analysis of evidence will produce the market value of property. This factor is including in valuation environment group. Next, followed factor is information of property characteristics (propertyâ€™s characteristic group). This element of information also ascertains the market value. The aspect consider to the value is age of building, design, material uses, state of repair, type of being valued and else.
Then, use outdated data valuation (Valuation environment) where the data not compatible with the current market and effect to the valuation of property. Fourth, Clientâ€™s relationship/pressure (Valuation process) is the interaction between valuer and client in providing the valuation report. The clientâ€™s pressure such as dissatisfaction with the valuation and threaten the valuer not paying the fees of valuation. Other than that, the client who familiarity with the property market usually will argue the valuation working because they know the best value of the property.
Fifth is poor skill and experience of valuer (individual characteristic). The valuer who is a fresh graduate had no skill or poor skill than senior valuer. So, their knowledge about the property market and the familiarity to the property transaction is less. They had to analyse the evidence carefully to avoid inaccuracy. Besides that, the fresh valuer would need to do more than one method to minimise the error in valuation. Sixth is imperfect of property market (Valuation environment). Property market usually not static, sometimes it not active, dull or not stable. This effect to the property valuation as the price would high or lower.
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Last but not least, lack of use valuation standard as reference (Valuation process). In Malaysia, Malaysian Valuation Standard (MVS) is being use as the guideline of valuation report. The valuation firm sometimes use it for once or twice only. If there is a new update of MVS, then they will open MVS to review the new update. They did not notice that sometimes there is small matter overlooked in valuation process need to be consider to avoid inaccuracy
Seventh is Valuation approach and technique practiced are not suitable (Valuation process). The method used in valuation must be suitable to get the accurate value. For example, residential property should be value using comparison method and to get most accurate use more than one method. The combination of traditional and conventional method is the better choice. Lastly, lack of valuation regulation and control framework by local regulatory body (Valuation environment). The regulatory bodies such as BOVAEA, RISM and PEPS must play their roles in this profession to ensure all the valuer in Malaysia follow their regulation and ethic code conduct of work honestly and transparent. The valuers need to provide good valuation report for the client without any misconception of valuation work.
The variance in valuation is similar to the inaccuracy. The items of variance valuation are also similar to the factors of inaccuracy. Then, the aspect of experience, education, market information, valuation standard, time period, source of market data/evidence and quality of information. So, the relationship between inaccuracy and variance in valuation can be deemed as the same.
5.5 Possible remedies
The challenge for eliminating the factors responsible for valuation inaccuracy falls across the academia, the practitioners, and valuation institutional such as UiTM, UTM, UTHM and INSPEN. The academia has a challenging task to improve the valuation methodology and doing the further research to establish to identified inaccuracy occurs, its actual degree and acceptable margin, causes and possible remedies.
The institutional or university had to working in close with the RISM for increase the knowledge and experience among the lecturers and valuers in public and private practices in producing a good graduate who can survive in business world. Besides that, each state in Malaysia should establish property data bank to make such data relevant to the current market. Such of property data bank would assist researcher in producing property market indices for performance measurement and accuracy test especially in the application of the investment method of valuation. Then, RISM and BOVAEA should be together to define the maximum acceptable margin error in valuation.
From the research some recommendation is the further research needed about the actual acceptable margin error in valuation for others properties such as commercial and industrial. These to ensure the most significance margin error for these properties are same with the residential or not. Besides that, the research of valuation accuracy properties in Malaysia should be done by researcher to known the guideline of accurate valuation. Lastly, research of market data/evidence plays important roles in valuation must be done by researcher to identify how much the market data or information in producing valuation report.
Hope the others researcher can continue the research as the profession of valuation move forward and become more challenging besides need for wider research on the subject matter.
By looking the overall of this study, the growing concern over valuation inaccuracy still weak. The potential of the issue bring forward is considerable and far to success. The awareness among of the valuer about the inaccuracy still low and they did not notice almost often this happen to them. By differing the valuation of the same property of different valuer, realize that the variance and inaccuracy occurs in that report.
The root of this problem is comes from various challenging faced by the valuer in 21st century. The valuer need to face the client manner and other matter related to valuation. The valuers need to be more flexible, creative, innovative and knowledgeable to handle the problem. Only the good valuer can be survive in this profession as the pressure of working always had. The possible of remedies suggested hope can be the best way to overcome the problem before getting worse.
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All recommendation action suggested from the researcher which is doing the further research on the commercial and industrial properties and defines the acceptable margin error for both properties. Then the overviews of valuation accuracy in Malaysia and the actual degree of level accuracy suitable can be use in valuation.
Finally, as the result the responsible bodies must collaborate together to overcome the problem with had a cross fertilization of ideas in handling the issue. The profession is moving forward as the sector of real estate increasing day to day and the economy growing faster in this country. If too much inaccuracy happens, it would effect to the property market sector and make the economy of country downturn.