Examining valuer's judgement in residential property valuations in metropolitan Lagos, Nigeria

PurposeThe purpose of this research is to examine whether valuers consider and interpret intrinsic value elements in a residential property the same way in a familiar location. The price people pay for a complex commodity like residential property is a sum of the utility of various intrinsic and extrinsic characteristics. The skill of the valuer rests in the recognition of value‐enhancing elements in order to arrive at a value for the subject property.Design/methodology/approachRelevant data for the study were gathered from a controlled‐experiment involving some residential properties and administration of questionnaires backed up with oral interviews on a random sample of 59 valuation firms in metropolitan Lagos, a commercial nerve‐center in the country. The data were analyzed using both descriptive statistics and analysis of variance.FindingsThe study showed that there are differences in the means and interpretation of value‐enhancing variables amongst valuation firms sampled. The study, inter alia, concluded that non‐duplicative nature of real estate, differences in the skills and degree of technical competence of the valuation firms including length of practice, absence of a centralized database and lack of valuation practice statements as well as updated guidance notes are the key factors, amongst others, responsible for the variability in the valuers' judgement in the study area.Originality/valueThe paper contributes to the empirical literature in valuation accuracy by establishing the level of interpretative errors in residential property valuations and the key factors responsible for the variability in the valuers' judgement in the study area.