The following are the five steps undertaken in a normal valuation process.
Step 1: Terms of Reference
Valuation process begins with the client and the valuer agreeing on the terms of reference which then form the contract between the two. TOR must therefore be clear and state the value estimate required. TOR informs the valuer the methodology to adopt to arrive at the value.
Step 2: Document Verification
The valuer obtains all relevant documents from the client e.g. title, survey maps, building plans etc. These must be verified through searches at the relevant offices (Lands Registries, Local Authority Registries, and Survey Offices etc). With an efficient registry, this may take a few hours. However searches are known to take as long as one week, and in extreme cases much longer. This stage can run concurrently with step 3 below.
Step 3: Inspection of the property
The valuer carries out physical inspection of the property, noting all the attribute of the property, taking measurements and confirming that the property is located as per the survey map. The valuer also notes the neighborhood characteristics at this stage. The time-frame here depends on the size of the property and the valuers experience of the neighbourhood and may take a few minutes to several days.
Step 4: Data collection, analysis and computation
The valuer gathers as many as possible, recent sales, rentals, and construction cost data etc. The information is analyzed and applied to the subject property to arrive at the values. These are reconciled and a final value estimate is made. This may take a few hours to several days depending on the size of the property.
Step 5: Reporting the value
This refers to the compilation of the report, proofreading and submission. Depending on the type of the report this may take a few minutes to several days. In special cases especially for larger and technical reports a draft report may be presented to the client for comment and feedback before the final report is issued.