The Evolution Of Valuations For Mortgage Lending Purposes

Publisher:
Pacific Rim Real Estate Society
Publication Type:
Conference Proceeding
Citation:
2016, pp. 1 - 12 (12)
Issue Date:
2016-01-18
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The valuation of property is undertaken for a variety of purposes of which mortgage lending is the overwhelming purpose. T he val ue determined is dictated by a number of factors including legislative and principle based definitions . This paper examines the valuation of property for mortgage lending purposes , the practices used by valuers , information and evidence relied upon in the valuation process and defines the challenges confronting valuers. It articulates the transfer of risk to valuers as contractors to lenders since the 1990s when valuations ceased being conducted by valuers directly employed by lenders. Design/methodology/ap proach A survey and interviews are used to examine the practices of valuers in undertaking valuations and specifically looks at the cognitive factors which impact the judgement of valuers in selecting the evidence which underpins the value determined. Find ings The paper demonstrates that elements of automation and improved information may assist in the valuation process, however it is the ultimate judgement of valuers which impact the value determined. It further finds that valuers use alternate methods of valuation in determining value where possible and that in the case of direct comparison method, a unit of comparison is further evolving in supporting the valuation process. Keywords: Value, valuation purpose, valuer Ema il contact: Vincent.mangioni@uts.edu.au
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