Discrepancies in real estate valuations

Discrepancies in real estate valuations can arise for a variety of reasons, whether due to differences in valuation methods, interpretation of data, market conditions or approaches used by different appraisers. Addressing these discrepancies requires a careful approach and effective communication. Here are some common strategies for handling discrepancies in real estate valuations:

1. Review of Methodologies Used:

• Analyse and compare methodologies used by different valuers. Discrepancies may arise due to the choice of different valuation methods. Reviewing these approaches can help identify possible areas of divergence.

2. Data Review and Comparison Factors:

• Carefully examine the data used in the ratingssuch as comparable properties, capitalisation rates and other relevant factors. Ensure that both appraisers have access to accurate and up-to-date information.

3. Direct Communication:

• Encourage open and direct communication between the experts involved. This may involve face-to-face discussions, telephone calls or exchange of emails to address and clarify any discrepancies.

4. Resolution of Technical Disagreements:

• If discrepancies are due to technical disagreements, seek resolution by reviewing technical literature or consulting with subject matter experts. Objectivity and a fact-based approach are essential.

5. Use of Independent Third Parties:

• In cases of significant discrepancies, use an independent third party expert to conduct an impartial review of the valuations. This can provide an additional perspective and help to reach a consensus.

6. Negotiation and Compromise:

• In some cases, it may be necessary to reach a compromise or negotiation between the parties involved. This may involve adjustments to valuations or the adoption of an intermediate approach.

7. Market Conditions Review:

• Assess market conditions at the time of valuation. Discrepancies may be due to changes in market trends that were not fully considered initially.

8. Review of Specific Elements:

• Examine specific elements that could influence the valuation, such as unique characteristics of the property, changes in the economic environment or local regulations.

9. Detailed Documentation:

• Maintain detailed documentation of valuation processes, methodologies used and data considered. This can be useful in the event of disputes and provide clarity on the decisions taken.

10. Mediation or Arbitration:

11. Compliance with Professional Standards and Regulations:

Resolving discrepancies in property valuations often requires a combination of technical analysis, effective communication and, in some cases, the intervention of impartial third parties. Transparency and a willingness to collaborate are essential to reach consensus and arrive at a valuation that accurately reflects the value of the property in question.