Did you know that an inaccurate valuation of your property could cause you to lose a lot of money? Property valuation is an important step in the real estate market and contributes to many real estate transactions, such as selling, buying, financing, and others. However, some clients may make mistakes when requesting a property valuation, which directly affects the accuracy of the valuation and negatively impacts their interests.

 In this article, we will discuss the most important mistakes that clients may make when requesting a property valuation and the most significant consequences of these mistakes. 

What are the mistakes you may make when requesting a valuation? 

A real estate valuation helps you in many ways, and it requires that the valuation be accurate and reflect the true market value of the property. The following are the most important mistakes you may encounter that could significantly affect your valuation: 

• Relying on an unauthorised entity: To obtain an accredited valuation, you must go to one of the property valuation companies where the valuation is carried out by a valuer accredited by the Saudi Authority of Accredited Valuers (Taqeem). However, sometimes people may turn to non-accredited entities, which may not be legally recognised and may not be accepted by official entities such as banks or courts. In addition, such valuations may be inaccurate. 

• Failure to provide sufficient information about the property: Information about the property is one of the most important factors affecting the valuation, as the real estate valuer bases the valuation on these factors. These include the property’s location, size, number of rooms, facilities, etc. The legal status of the property, such as ownership status, the existence of any mortgages, and joint rights, should not be ignored. Some clients believe that concealing certain problems with the property may increase the value of the valuation. However, this leads to an inaccurate valuation and may cause the client to incur financial losses. In addition, this information must be updated continuously to ensure the accuracy of the valuation. 

• Ignoring the purpose of the valuation: Stating the purpose of the valuation is one of the most important things that a property valuation report should include. It also plays an important role, as it allows the valuer to determine the appropriate property valuation method, and a lack of clarity regarding the purpose of the valuation negatively affects the results of the property valuation. 

• Failure to review the valuation report: The client must review the real estate valuation report after it is issued and ensure that all the information contained therein is accurate and that all the information mentioned in the report corresponds to the information that was provided. 

Avoiding these mistakes when requesting a property valuation and ensuring that you deal with an accredited property valuer will help you make informed decisions based on factual data and fair value.

What are the most significant effects of an inaccurate property valuation?

An inaccurate property valuation causes many problems, the most significant of which are:

• An inaccurate property valuation may lead to overpricing or underpricing, which negatively affects the market or causes financial losses for the seller. 
• Inaccurate property valuations may hinder access to property financing and expose the financing entity to financial risks. 
• Unfair valuations result in the payment of undue taxes or the loss of actual tax revenue.
• Any error in valuation may lead investors to make incorrect decisions that affect their return on investment. 

In conclusion, property valuation is a key element in supporting decisions on sales, purchases, investments, and financing. Avoiding the common mistakes we have mentioned not only protects your financial interests but also ensures that your real estate decisions are based on accurate and reliable data. To achieve this, you must rely on a valuation agency that is accredited by the Saudi Authority for Accredited Valuers (Taqeem) and has experience, accuracy, and credibility.

At Aain valuation, we adhere to the highest professional standards and provide you with accurate and accredited valuation reports that serve various real estate purposes, whether you are an owner, investor, or financier. Contact us now to request a real estate valuation and don’t leave your decision to chance. 

Frequently Asked Questions

• What are real estate valuation companies?

Real estate valuation companies are specialized entities that determine the market value of various types of real estate, such as land, residential buildings, commercial buildings, and industrial facilities, based on approved professional standards. These companies operate through real estate valuers licensed by the Saudi Authority for Accredited Valuers. 

• How do I obtain a real estate valuation?

A real estate valuation is obtained through a certified real estate valuer or a real estate valuation company. At Aain Valuation, we offer you a reliable service as we have the necessary accreditations and certifications with a professional team of accredited real estate valuers. 

What is the difference between real estate appraisal and valuation?

Real estate appraisal and valuation share the same goal, which is to determine the value of the property, but there is a difference in that valuation often depends on market estimates and supply and demand, and may be performed by those with field experience without formal qualifications, making it more prone to variation.

 Real estate appraisal, on the other hand, is a precise professional procedure that can only be performed by a certified real estate appraiser licensed by the Saudi Authority for Accredited Valuers. It is based on approved standards and methods and a study of the factors affecting the value of the property.