Ranking the Causative Factors of Mortgage Valuation Inaccuracy in Kaduna Metroplois

Abstract

This paper is aimed at contributing to the scarce empirical literature on mortgage valuation by ranking the factors that influences mortgage valuation inaccuracy in the Kaduna Residential property market. A quantitative research approach using a survey design was adopted and structured closedended questionnaires were designed and administered to 57 registered Estate Surveying and Valuation (ESV) firms in Kaduna metropolis; 51 out of the 57 administered questionnaires were returned and used for analysis. A simple random sampling technique was employed and the 5-point Likert scale used as the scale of measurement, while causative factors were ranked using the Relative Importance Index (RII). The study analyzed the data using percentages. Findings indicated that data inadequacy, imperfection in the property market and clients’ pressure are the most trending in the absence of a unified valuation approach. The regulatory framework and valuation methodology are least contributory to valuation inaccuracy in the study area. The research will be of interest to practitioners and academic researchers interested in mortgage valuation as a guide for conducting mortgage valuation in the study area.

An Investigation Into the Use of “Hybrid” Adjustment Techniques in the Application of the Sales Comparison Method in Residential Valuation

“…Literature, however, abounds on challenges in valuation, particularly when using the sales comparison method. These studies cover a number of issues, such as valuation accuracy (Aliyu, et al, 2018), uncertainty in valuation (French & Gabrielli, 2004;Kucharska-Stasiak, 2013), information asymmetry (Garmaise & Moskowitz, 2004;Firoozi,et al, 2006), valuation variances (Munshifwa, et al, 2016) and others. Thus, the reality is that, in practice, modifications are made to this basic model by practitioners as dictated by the type of property being valued, differences in the volume of market information available, technological advancements, increased client awareness, demands for more accuracy in the assessed values and generally changed dynamics in real estate markets (Addae-Dapaah & Ho, 1996;Aluko, et al, 2004;Appraisal Foundation, 2014;Bogin & Shui, 2020).…”

Valuation accuracy in the residential property markets in Minna and Abuja, Nigeria

“…A plethora of factors were noted as instrumental for the stray of values from the tolerable margin of error. These are valuation methodology employed, client pressure, inadequate academic training, dearth of market evidence, insufficient experience, property characteristics, complexity of the subject property, inexperience in valuation practice, amongst others (Oduyemi et al, 2016;Ajibola, 2010;Aliyu et al, 2018) and if left unchecked as Effiong and Mendie (2019) argued, will lead to upsurge in lawsuits against valuers. Therefore, this study aims to assess valuation accuracy in two extremely different residential property markets in Nigeria (Minna and Abuja), identify the significant causes of valuation inaccuracy and propose measures that could mitigate valuation inaccuracy in these residential property markets.…”

An assessment of valuation education and training in Kenya in comparison with practice

“…The critical role of the valuation function indicates the importance of accurate valuation outcomes. However, empirical studies have confirmed the existence of inaccurate valuations globally (see for example, Aliyu et al ., 2018; Asnakew and Amogne, 2021; Babawale and Omirin, 2012).…”