Location-induced client influence in valuation for loan security: the new terra incognita for emerging property sub-markets

Abstract

PurposeConsidering the changing dimensions of client influence in the emerging sub-market in Nigeria, different from previous general insinuations, this article examines the new strategies adopted by clients to influence estate surveyors and valuers (ESVs), factors that predispose ESVs to client influence and the effects of clients' influence on valuation outcomes and real estate markets in emerging sub-market, using Ibadan market as the study area.Design/methodology/approachThe paper is situated within a client influence assessment framework, modified to reflect contextual incidents. Contextualization was made possible with the involvement of both practitioners and academic researchers. Validated copies of the questionnaire were administered to the registered practicing ESVs in an intact group during their monthly state (provincial) meeting and through direct delivery at their firms. Data collected were analyzed using descriptive and inferential statistics.FindingsContrary to the previous studies, the authors found no significant relationship between ESV professional qualifications, the firm's staff strength and the frequency of clients' influence in valuation assignments. Hiding important information and clauses, begging, lobbying, and seeking undue favor and promises for future jobs or appointments are the influencing strategies clients employ to pressure valuer. The topmost factors are emerging sub-market and economic-induced factors, lack of due process, and adequate transparency on the parts of firms and Valuers. It was established that the new dimension of client influence leads to the mortgage valuation accuracy dilemma, discredit of professional confidence, default and financial distress, and generating mistrust in the property market.Practical implicationsThe implication is the new dimension of client influence, different from the previous studies, thus calling for professional and policy attention. As real estate investment and transactions transcend globally, understanding the local sub-market condition is imperative.Originality/valueThe novelty of the paper is the exposition on the dimensions of client influence within the economy and the implication for the professional body regulatory policy.