The International Valuation Standards Council (IVSC ) defines ‘market value ’ as: ‘The estimated amount for which an asset or liability should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction , after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion.’ The International Valuation Standards 2017 makes it clear that: ‘…. a willing buyer refers to one who is motivated, but not compelled to buy. This buyer is neither over eager nor determined to buy at any price . This buyer is also one who purchases in accordance with the realities of the current market and with current market expectations, rather than in relation to an imaginary or hypothetical market that cannot be demonstrated or anticipated to exist.’ ‘…. a willing seller is neither an over eager nor a forced seller prepared to sell at any price, nor one prepared to hold out for a price not considered reasonable in the current market. The willing seller is motivated to sell the asset at market terms for the best price attainable in the open market after proper marketing , whatever that price may be.’ Important elements around property valuations in Botswana will be unpacked.
To an ordinary person in the street, a valuation is an estimation of the worth of something, especially one carried out by a professional valuer . Registered professionals can produce different valuation results with huge margins and can equally justify their methods. This has led to an uprise in disputes that potentially cause large financial losses to the transacting institutions . While valuations are demanded for so many reasons , the most common one relates to mortgage financing by financial intermediaries mostly banks. After funding the purchase of properties, banks have struggled to recoup their initial capital outlay which led to much questioning. To date some banks have devised methods of selecting a panel of valuers that they can trust. Some banks have even gone on to hire their internal valuers so that they can have a balancing check before making financial commitments in funding property finance.
With the market screaming for a discourse around proper strategy , ethics and practise around valuations , the present Property Valuations Masterclass Program seeks to extinguish existing fable around property valuations in Botswana . The programme will be facilitated by Maje C Maje , a renowned valuer and entrepreneur. All authorities that deal with property valuations, users of property valuations and also land boards are encouraged to ensure attendance of their representatives so that they can optimally use their property with deep understanding of the value of the land.