The Valuation and Land Economy Section has interests with all types of property. Its purpose is to support the professional issues concerning members working in:
- Land, property and business valuation practice common to all forms and uses of property
- Land and property lettings and management
- Compensation bases and assessment for compulsory acquisition
- Investment appraisal, performance measurement and analysis, and decision taking
- Rating valuation, and property taxation law and practice
- Property funding and financing
- Property purchase surveys
- Building surveys
Property prices and building costs vary in Trinidad and Tobago, just as they vary anywhere in the world, and to assume that a property in one area is "cheap" does not mean to say that it represents "good value" in that area.
Perhaps the major problem faced by everyone intending to buy an old property - habitable or not - is the question of whether the house is basically sound and what is it really worth? There is no magic solution for those already caught up in the spiral, but just as prospective buyers are wise to seek professional advice on legal matters, advice should also be sought as to the likely cost of renovation work and the "right" price to pay for a building requiring renovation.
- What is it?
With a valuation, you'll get a brief report, with an open market value of the property.
- What type of property is it suitable for?
Valuations can be done on most residential properties.
- What is it useful for?
Most valuations are commissioned by mortgage lenders who will want to know that the value of the property is adequate in relation to the amount of money they are lending.
- What does it cover?
A limited inspection is carried out, covering the parts of the property that are easily accessible.
The valuation and survey report
What should such a valuation and survey report, the Expertise, include? The first step is to identify and establish that the property and land being offered for sale do, in fact, exist in the vendor's name. Some would say this is the role of the Attorney and whilst this is generally true, cases do arise where the stated area of land included in a sale is substantially different to reality or that set out in the title document. The Valuation Surveyor has a duty to check this carefully, since a greater or lesser amount of land can affect a valuation. He also checks the Cadastral Plan on the ground.
The second step is to consult the Ministry of Planning regarding the current approved land use and the possible alternative available for the site.
Finally the Valuation Surveyor should consider any rights of way over the property. Having this information at the valuation stage can have a very significant bearing on the price.
Perhaps the most important part of a valuation and survey is to ensure that once any necessary repairs have been done, you won't be spending more than the property will be worth. Amongst the points to considered are the following:
- Determine what essential works need to be done and in conjunction with the prospective buyer what further improvements he or she wants to make.
- Estimate the value of the property once those improvements have been carried out. The difference between the two figures is the correct purchase price for the unrenovated property. (If no improvements are necessary, a valuation is conducted on the property as it stands.)
Almost anything will affect the value of a property. Every property has a certain number of advantages and disadvantages and it is part of the role of the Valuation Surveyor to determine these in a monetary form.
Advantages and disadvantages will be viewed by the expert in the context of the local economy and local attitudes. It is quite common practice for foreign buyers, without professional local advice, to pay an inflated price for property, purely because their experience is oriented towards their own country of origin. The real problem arises when a foreign owner wants to sell and perhaps discovers that he is limited to offering the property at an inflated price to the foreign market, merely to recover his investment.
The Valuation Surveyor will asses the value of a property by comparing selling prices of similar property recently sold in a defined area. However, the Valuation Surveyor is unlikely to restrict himself to a single method of appraisal in any one valuation and will be able to determine what other methods are appropriate for any particular property.
In the case of newer buildings, he may decide to evaluate the property by determining an initial land value and add this to the cost of the construction of buildings. An apartment in a major town could be valued on the basis of the annual rental which could be expected in return. Whatever methods the Valuation Surveyor chooses, there will always be a balance between mathematical calculations and market conditions, coupled with a thorough and intimate knowledge of the area.