Valuers Enlistment And Fees Standardization Practices In Nigeria Banking Industry: Implication For Real Estate Profession

Recent development in Nigeria valuation market reveal that banks, notable end users of valuation services, now enlist (select) Estate surveying and valuation firms for credit based valuation jobs adopting divergent and unilaterally set basis. They also dictate fees payable to the retained Valuers adopting standardized threshold not properly aligned to the nature, purpose, location, magnitude of the job and sector fee scale. This study therefore, attempts an investigation into this enlistment and fee practices to ascertain the implication and the extent to which the act may affect the Estate Surveying and valuation profession in Nigeria. A survey was conducted in Lagos, using a purposive random sampling with a structured questionnaire to collect data from 121 respondents comprising 100 registered estate surveying firms and the 21 banks in Lagos metropolis. Data collected were captured with SPSS IBM Version 20 and analyses were done using descriptive and inferential statistics. The result however revealed that the enlistment policies are not broad based, criteria substantially opaque with a wide range of qualified practitioners excluded by this practice. It also creates black market fee structure, tight cost-fees ratio, creeping loss of interest by valuers in credit based valuations, low quality reports, and dwindled capacity of firms to engage and retain experienced valuers. It was further revealed that banks engage in this two-pronged practice predominantly as a cost saving strategy; to address mounting issues of connivance, compromise and corrupting influences; the need to promote retail/consumer banking and the unwieldy number/proliferation of valuation firms The study recommended amongst other remedial steps that despite the existing challenges,Valuers should uphold professional ethics by sustaining quality and professional standards while collectively avoiding undue soliciting for valuation briefs especially in unfriendly and tilted conditions, while upholding bidding professionally even in a competitive setting. Also the symbiotic nature of the relationship between banking and valuation sectors demand a proactive regulatory intervention by concerned regulators in order not to compromise the strategic risk management function of valuation.