Essentially, there is no real change for the professional valuer: their job remains to carry out a professional and impartial valuation for the client, without outside influence. The valuer must report his or her findings in a clear and unambiguous way, with the file being able to withstand future scrutiny if there is cause to query the valuation figure.
Valuation standards were first introduced in the UK following the property crash of the early 1970s when there were no common standards governing valuations, and subsequently the Red Book was adopted in Ireland.
It is somewhat alarming that, following a number of boom and bust cycles, it was not until Irelandâ€™s recent spectacular crash that the Irish Central Bank identified weaknesses in the valuations process as a contributory factor.
The 2012 Central Bank “Lessons Learned” document stated that there were many weaknesses in the entire secured lending valuations processes. It states (among several findings) that: “â€¦[there was a] lack of appreciation of the significance of the valuation document as independent evidence of risk mitigation effectiveness. Many bankers did not fully regard the valuation report as a key document underpinning the basis on which they were acquiring the risk”.