Is There a Future for Valuers?
Issues confronting valuers all over the world have created a situation where valuers are increasingly required to look for work in alternative disciplines. Here we try to analyze the current need to explore non-traditional areas of work, be it for survival or growth and expansion. With the goal of improving the situation faced by valuers in the long term, two possible alternatives are observed. First, valuers can remain in the industry by adopting new technologies and by becoming more specialized. Second, valuers can explore professional opportunities in related fields that are either valuation-based or real estate-based.
Why do valuers need to explore non-traditional areas of work? There are two major reasons why. First, and more conventionally, is the individual’s drive to expand business horizons. However, this depends on the background, expertise, and initiatives of individual valuers-cum-entrepreneurs. Second, external environmental forces may drive the exploration of non-traditional areas of work. In the field of valuation, the demand for and relevance of conventional areas of work are dwindling and may eventually come to a point where one can no longer rely on them for a living. Therefore, non-traditional areas of work need to be explored as supplemental or alternative sources of income. This second reason may be the major concern for valuers the world over today.
Social and economic conditions have changed, and valuers are being criticized worldwide. Because in some cases appraised sales value is incongruent with the value estimated for a buyer, the credibility of valuers is being increasingly questioned.
In 2003, the World Valuation Congress held its 10th bi-annual world congress entitled “Is There a Future for The Valuation Profession?" at Cambridge University, United Kingdom. Some 250 participants gathered to discuss this main theme. The discussions held hinted at the fact in today's world, valuers will have to actively acquire new innovative skills in order to survive.
There has been increasing concern about reduction in the number of valuers and their jobs worldwide. Other agencies and professionals are now widely used for tasks previously carried out by valuers such as pre-qualification, first mortgage, home equity, wholesale review, quality control. As a result, the need for valuation is likely to shrink drastically in the near future, particularly for residential properties, which are the major source of income for typical valuers.
Valuation fees have been declining not only in India but it is a worldwide phenomenon. Therefore valuers will consider other work alternatives, such as consultancy services in the areas of asset, financial, and real estate portfolio management.
The threat to valuers is not only limited to local valuation firms, but also to large international firms. Large accounting firms have diversified into property consultancy services, intruding upon the work opportunities of valuers. Given this situation, the future of conventional practices of valuers may not be bright. In a globalized world, issues become inter-related, but adaptation and development takes time. Therefore, it is critical that a paradigm shift takes place among valuers if the profession is to survive and to develop.
Being Competitive for Survival
There are ways that valuers can adopt to become more competitive and survive in the changing world. First and foremost is to specialize within the field of valuation.
Valuers cannot avoid the use of the Automated Valuation Models or Computer-Assisted Mass Appraisal (CAMA). These technologies have been developing since the 1970's in foreign countries and have been accepted in the Uniform Standards Of Professional Appraisal Practice (USPAP). A valuer in the contemporary world needs to know about the innovations brought on by latest technology and adopt and apply these tools to their best advantage.
Specialization
Being strong in a particular field is another way to gain an edge over one's competitors and survive and grow.
Some prospective areas for specialization are:
• Plantations including palm, rubber, or fruit orchards
• Utility properties including facilities projects
• Agricultural properties
• Environment concerns and contaminated properties
• Easement, right-of-way, and appropriation
• Intangible property valuation
• Business valuations
• Valuation for taxation
Even though limits exist for these suggested alternatives, they cannot be ignored and it is important that they are taken seriously. Important investment decisions should not be made without adequate scrutiny and well informed judgement. Therefore rational and intelligent people should not allow themselves to blindly believe in the judgements of artificial intelligence or value arrived at by computerized programmes of valuation. In the case of specialization, qualified expertise is also needed. This will take a certain amount of time, and given time constraints, some valuers may not be able to furnish themselves with the necessary knowledge and experience in time to make the changes that will enable them to survive.
Diversification
There are a diverse set of fields that should be considered when thinking about ways to expand one's business under normal conditions or as alternative fields during lean times. The following are some valuation-based services:
• Survey. There are a several types of surveys that can be considered, such as building inspection,
land title survey and certification, quantity survey, traffic count surveys and the like. Surveys in these areas can complement and supplement a valuer's main services.
• Research. This includes a wide range of services such as market feasibility studies (market survey, site analysis), financial feasibility studies for project development and/or investment, product tests, surveys of clients and consumers (questionnaires, focus groups, etc.).
• AVM- CAMA. Expertise in AVM-CAMA can be applied to various fields of services, types of real estate, and sectors of the markets.
• Publications. Real estate publications can be another line of valuation-related business. This includes the publishing of text books, reference books, pocket books and journals for sale to the public. Publications can help improve name recognition for firms as well.
In addition, there are also non valuation-based fields of business that can be expanded or shifted into e.g. Agency / Brokerage And Estate management. In addition, there are other real estate-related fields such as property development, facility management, relocation, finance and the like that valuers may be able to branch into.
The need to explore non-traditional areas of work is internally driven by the expansion of professional services and externally driven by the shrinkage of the conventional valuation profession. Impediments to further development of the profession include consumer doubts in the credibility of valuers and the intrusion of other related professions.
To survive and develop further, valuers must make the most of technologies. In addition, they must become more specialized in their valuation expertise, applying their valuation capabilities to the field of plantations ,utility properties, agricultural properties, as well as easements.
In considering the shift to alternative fields where valuation capabilities may be of added value, the valuer may consider offering a diverse set of valuation-based services such as survey, research etc. On the other hand, valuers must also take into consideration non valuation-based alternatives, such as brokerage, property management, facilities management and the like.
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