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n Estates Surveyor and Valuer By ESV Kayode Igunbode ANIVS RSV, said Valuation is necessary in taking bank loans
He said Valuation exercise is a prerequisite to loans decision of banks.
ESV. Igunbode said “Valuation has to do with knowing the monetary worth of a property, or it is the process to determine the value of an asset”.
He explained that It helps us to take a guided decision of the worth of a property.
“Valuation is very important in economic development. For example, if a bank wants to give a loan to a customer that requested for it, the customer has to present a property as a collateral security. He said the bank would need the service of an estate surveyor and Valuer to determine the worth of the collateral as against the loan that the customer is requesting for.
According to the relevant laws of Nigeria, it is only An estate surveyor and Valuer that is trained and licensed to carry out this professional service for banks, therefore, it is in order for management of the banks to call for professional service of an Estate Surveyor and Valuer in this subject matter.
“An Estate surveyor and Valuer, by his wealth of experience in valuation exercise, he gives Market value and Forced Sale value as requested by bank.
The difference between market value and forced sale value is that the market value is fair monetary worth of the property, it is fair value to both parties While, Forced Sale Value is value that is obtained out of distress or an urgent need for cash. Forced Sale value is mostly used by banks in case there is any default from the customer requesting for a loan.
Therefore, banks find the services of an estate surveyor and valuer very important to take a guided decision on some policies as related to giving loans to customers.
Meanwhile, should there be any case where the customer fails to pay back the loans and other charges as spelt out in the terms and conditions of their agreement, the customer would lose his collateral to the bank, he forecloses his property that he used as collateral security.
The bank shall be the new owner of the property, which they may decide to sell and get back the loan in return as the case may be.
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