Joys and challenges of being a property valuer

In May this year, the Malaysian Medical Association made it possible for high school students to gain insights into a wide range of career options and degree paths by organising a career conference. Various professionals shared their experiences, challenges and joys in working in their respective fields. As a parent, I took my teenagers along with me, hoping that hearing from those who have been through the ropes would inspire them and set them on a path to suitable careers.

In the early stages of my career, I underwent rigorous training to become a property valuer. The experience inspired me to share my journey. If you want to learn more about my degree, visit my About Me page.

Real estate is often seen as a highly lucrative industry. Before diving in, it’s vital to intern at a property consultancy firm to gain insights into the work involved. Genuine passion for the field is essential for success, as the market is saturated with firms offering similar services. Some professionals do earn high salaries but not everyone makes it. There are no available statistics on the matter, and I welcome any corrections.

Challenges that I faced

When I began my career as a valuer, I was full of enthusiasm. However, I soon started to feel that the daily tasks I was assigned didn’t align with the extensive studies I had undertaken at university. I found that the valuation process was not as analytical as I had anticipated, mainly due to the lack of resources and information. Nevertheless, I made a continual effort to keep learning and improving.

Site inspections, data searching, and report compilation were arduous tasks. For example, envision a vast industrial estate with multiple buildings and structures. My assistant and I took one day to inspect every corner inside out. The property’s description is just one segment of the report! Managing multiple valuation reports simultaneously and meeting tight deadlines can be overwhelming, as it takes time to gather all the pieces of information.

My favourite part of the valuation process was computing the market value. But sometimes, I struggled with data collection and making the necessary adjustments. Most people may not realise that valuation is an art and not an exact science, leading to limitations in the analysis. Valuation depends on the basis and assumptions made — and the quality is only as good as the data entered into it. Users of valuation reports benefit when there is full disclosure of key information, assumptions and limitations. Valuers must ensure they provide comprehensive and accurate information.

Valuing a property can be tricky, especially when using the commonly used comparison method. This approach lacks a fixed formula or percentages to adjust the transactions of comparable properties, leaving the estimated figure in the hands of an experienced valuer. This method is a guessing game without enough data. All five valuation methods require some form of comparison to calculate the market value. The availability and quality of data are critical for all methods. As a responsible valuation company, we declined jobs where we felt that we couldn’t provide a reliable valuation due to insufficient data or meet the client’s expected market value.

Valuation can involve various aspects requiring specialized knowledge and expertise beyond our capabilities. Sometimes, we may need to seek expert advice or conduct thorough research. For instance, we lack expertise in estimating construction costs when using the cost valuation method. Hence, it is ideal for the client to obtain a professional report from a quantity surveyor for large or complex properties. In such situations, I had to consult my acquaintances in quantity surveying and construction firms, as no online cost estimates were available then. It is worth noting that every valuation method has limitations, and addressing these issues is essential.

It is interesting to note that according to a report by CBRE, valuation teams worldwide are already incorporating data analysts, statisticians, programmers, accountants, and industry-specific specialists (Ref 1). The report also predicts that this trend will continue to increase in the upcoming years. This highlights the importance of seeking assistance from experts in valuation areas outside our skill set instead of trying to tackle them ourselves.

A valuer must be well-versed with the property’s location. They must stay on top of any changes in planning policies that could impact the property’s value, both currently and in the near future. They must also stay current on local demographics, bank interest rates, unemployment rates and the country’s overall economic health.

Clients often ask for an estimate of the market value before hiring us. However, providing an accurate estimate requires much work and research and does not guarantee that the client will proceed with the engagement. Clients usually expect the final report to match or exceed the estimate, which adds to the pressure of providing an accurate estimate.

Once you reach a senior to top-level position, you must wear the “marketing hat” in private practice. You are no longer just a valuer but also a “business owner”. Building a clientele and securing jobs is necessary to sustain the firm.

Note: Once you become a registered valuer, you will be responsible for the valuation reports you sign. This involves professional liabilities, resulting in legal suits for overvaluation or undervaluation and disciplinary actions from the regulating Board.

Conducting due diligence checks during the valuation process and verifying the accuracy of the information you use is necessary. Be mindful and professional in your work.

The satisfying parts of my work

I enjoyed working independently, meeting new people, and visiting interesting properties. I started as a junior valuer; my job required me to drive around frequently to inspect properties in various locations, which can be pretty difficult for people who have motion sickness.

A few properties I inspected were hard to access. We had to use a helicopter or a speed boat to reach them. These were rare, unforgettable experiences. I saw places that I would never have visited otherwise. I also had the opportunity to participate in some overseas study trips that broadened my professional horizons and taught me how properties were developed in other countries.

While working in corporate real estate, I had the opportunity to meet upper-level executives from various industries. Attending dinners and events was part of the job. Corporate valuation was anything but glamorous; it required a great deal of tedious effort. The work had significant impact on a large scale as we handled substantial deals, but I felt like I was just a tiny part of a big machine. I found more satisfaction in representing private landowners involved in compulsory acquisition cases because my efforts helped them receive higher compensation for their properties. It was impactful on a smaller scale, but my involvement was more direct.

Valuing large and complex properties can be time-consuming, but the satisfaction and relief that come upon completion make it worthwhile. During the inspections for larger assignments, a valuation assistant accompanied me to help with some tasks. I can’t stress enough that working with a capable assistant was definitely happiness.

I enjoyed developing valuation models using discounted cash flow and other techniques when there was sufficient data.

My remuneration was initially standard. However, my salary significantly increased after passing the Test of Professional Competence. This motivated me to become a registered valuer with Malaysia’s Board of Valuers, Appraisers, Estate Agents, and Property Managers.

However, if doing valuation is not your cup of tea, you may want to consider another avenue in real estate.

In conclusion, I would like to emphasize the importance of professionals prioritising their clients’ interests, as engaging in questionable practices can harm those who rely on professionals for dependable guidance.

If you have any questions or want to learn more about work in the real estate industry, please don’t hesitate to contact me.

Reference

1. Building a Smart Future & Property Valuation | CBRE