Opinion Shopping for Valuation Metrics
As part of the tender process that precedes formal appointment to value a property, it has come to the attention of the API that some Valuer Members have been approached by clients such as Property Trusts, to supply them with a written response on the critical valuation drivers for specific properties such as the Valuer’s indicative capitalisation rate, market rents, growth rates etc.
In response to ‘opinion shopping’ for valuation metrics, the Australian Valuation Standards Committee (AVSC) regards requests of these types as inappropriate and recommends that Members do not comply with provision of the requested information.
The AVSC reminds Members that the respective International Valuation Standards 2017 (IVS) and API Code of Professional Conduct protect the interests of the public and the industry by the mandatory compliance with Valuer independence and conflict of interest provisions within the codes. Valuers must be independent and free from any undue influence that may lock them into a predetermined outcome. ‘Opinion shopping’ is not considered an appropriate method to use in order to select a Valuer.
Any request that will affect the independence or objectivity of a Valuer, or place an inappropriate limitation on a Valuer, will breach ethical and professional standards and should not be complied with, especially when the purpose of the valuation is for financial reporting and/or mortgage security.
If you have any comments or feedback, please do not hesitate to contact the API through firstname.lastname@example.org. The API is focused on promoting best practice within the property industry and welcome feedback to help this goal be achieved.