ANALYSIS OF CONTRAINTS TO VALUATION ACCURACY FOR DIFFERENT PURPOSES IN LAGOS AND ABUJA, NIGERIA

Accuracy of valuation exercise for various purposes has been universally emphasized in thiscurrent dispensation and as a matter of fact, it has been given a world-wide recognition by theWorld Bank, which encouraged the preparation of valuation list. The need to close the widergap between the market value and valuation figure necessitated this study. The study firstlyinvestigates inaccuracy and variance and further analyzed the factors and the extent to whichthese factors have contributed to valuation inaccuracy and variance. The study utilized reportsof valuations on properties submitted to some selected banks to establish valuation variance bycomparing the actual market sales (AMS) and valuation figures of the valuation firms toestablish valuation inaccuracy. The study selected 100 and 150 estate surveying and valuationfirms with more than 10years experience in property valuation, through simple randomsampling from Abuja and Lagos. The study further selected 15 banks that constantly requestingthe valuation opinions of the selected firms in Abuja and Lagos. The result of analysis ofvariance (ANOVA) confirmed that there was significant valuation variance among the estatesurveyors and valuers (F-ratio at 4.73, p-value at 0.42) and result of t-test showed that the meandifference between AMS and valuations (at p-values less 0.05) was significant. The result offactor analysis(FA) employed further revealed ten (10) the most emphasized groups of factorsthat contributed about 92.43% variance in determining accuracy of valuation. The studytherefore recommends that all the stakeholders in property assessment and valuation exercisesshould address the most emphasized factors by adhering strictly to lay-down provisions of theprofession and principles without compromise in order to achieve accuracy.