Margin of Valuation Error Among Nigerian Valuers: Postulating an Acceptable Limit
Study on margin of error aims at capturing the response of Nigerian valuers and their clients from the financial sector to their permissable margin of error with a view to establishing the bracket outside which the valuer is considered incompetent. The opinion of 300 Estate Surveyors and Valuers were sampled using simple structered questionnaires in five cities in Nigeria. The work also relied on secondary data deduced from previous studies convering clients' response from the financial institutions as they have centralized lending policy across their branches. The paper employed descriptive and inferential statistics to analyze the data. The results revealed that 56.7% of valuers favoured ±10% and clients between ±5% - ±13.16%. The study postulated that margin of valuation error of between ±5% - ±15% should be adopted in the Nigerian setting depending on the complexity of the property and owing to unstable market and dearth of transaction data bank. It is recommended that the authorities regulating the practice of Estate surveyors and Valuers in Nigeria should make an effort to adopt margin of error principles to ensure standardization of practice in the face of market globalization and sophistication.
Keywords: Accuracy; margin of error; valuation; variance