Putting a value on every object is the norm in today’s world. For the property industry, a professional valuation is particularly crucial as it ensures that all parties – buyer, seller and banker – are getting a fair price.
And this is achieved through the services of the valuer, who is an independent, honest and professional third party.
A valuer is someone who is responsible for determining the fair worth of a property, which includes land, buildings and houses.
In Malaysia, a valuer is usually appointed by the bank or an individual during the transaction of a property. This profession is governed by the Valuers, Appraisers and Estate Agents Act, 1981 (Act 242).
As part of the Career in Real Estate (CaREA) series, StarProperty.my interviewed CBRE|WTW managing director Sr. Foo Gee Jen to gain an insight into this valuable occupation.
“A valuer is crucial in maintaining a balanced economic banking ecosystem. Before applying for the housing loan, the bank needs to ensure that the valuation of the property matches the market price, which is based on certain criteria including the property type and location.
“They will appoint an independent valuer to assess the property and provide an estimated value,” said Foo.
“The role of a valuer is necessary for the banking system to protect their interest. If the lendee is unable to pay the loan and the house goes into auction, the bank can get back the money that was lent out.
“It also serves as a prevention measure against the previous owner or developer to mark up the housing price for extra profits,” explained Foo.
“If the bank lends a person RM500,000 for purchasing a house without appointing a valuer, and it turns out that the real value of the house is only RM400,000, it will cause the bank a loss of RM100,000.”
Valuers have a significant responsibility because they are the ones putting the signature on the valuation report before handing it to the bank or the individual.
They are legally responsible for the information provided, and their liability in an approved valuation report is up to seven years.
Besides Act 242, valuers also have to comply with the standards set by the Board of Valuers, Appraisers, Estate Agents and Property Managers.
“To become a licensed valuer, one must practise in the field for two years under the supervision of a registered valuer before being qualified to submit the Test of Professional Competency (TPC) logbook to the board. An interview will then be arranged, and the practitioner has to pass it to become a licensed valuer,” explained Foo.
As a graduate of Estate Management from University Technology Malaysia (UTM), Foo elaborated that the course is a multi-discipline programme encompassing the real estate principles, the principles of land law, the Local Government Act, the Town Planning Act, the principles of the national land code, and more.
“On top of that, we also learn about building technology, accounting, property and facilities management, and contract law,” he said.
The degree prepares the student to become a valuer, an estate agent or a property manager.
In his case, Foo was trained in all three fields before he went through the TPC logbook submission and interview.
“These fields are interrelated and having a thorough industry knowledge will help you become a well-rounded property consultant,” said Foo.