CARLOS LAZARO ARMONES, REA
http://orcid.org/0000-0001-9045-0125
armones165@gmail.com
Municipal Assessor
Municipality of Moises Padilla
Province of Negros Occidental
Philippines
Knowledge and Practice
of Valuation Methods by
Real Estate Practitioners
Rationale of the Study
• The paper intends to assessed the level of knowledge and extent of the practice
of real estate practitioners
• Relationship between knowledge and practice of valuation methods
• Investigate the challenges encountered by real estate practitioners in the
practice of their profession
• Proposed Capability Building Program that can be implemented
Methods
 DESIGN: Descriptive-comparative and correlational study.
 RESPONDENTS: 98 Real Estate Practitioners; 45 Government sector and 53 Private sector in
Negros Occidental, identified using random sampling.
 INSTRUMENT: A test questionnaire was utilized to measure the level of knowledge, while a
researcher-made survey instrument was used to determine the extent of practice.
 DATA ANALYSIS:




Mean and standard deviation - the level of knowledge and extent of practice;
frequency count and percentage distribution - challenges encountered by the respondents;
Mann-Whitney U tests - comparative problems, and
Spearman rank correlation - relationship between knowledge and practice.
 ETHICAL CONSIDERATIONS: General ethical principles of respect for persons, beneficence, and
justice to ensure the ethical soundness of the study.
Results and Discussion
Level of Knowledge of Real Estate Practitioners of the
Valuation Methods
• As a whole, the level of knowledge of real estate practitioners of the valuation
methods (traditional and advanced) is average.
• Traditional methods- higher than the advanced methods, although both are
interpreted as average.
• The finding indicates that all real estate practitioners have good but limited
know-how of the valuation methods.
Results and Discussion (Cont…)
Extent of Practice of Real Estate Practitioners of the Valuation
Methods
• Traditional methods of valuation – great (designation, educational attainment, and
length of practice)
• Advanced method – moderate; very great for postgraduate and very poor for those
longer in practice.
• Basis of valuation- highest in practice for both traditional and advanced methods
• Disclosure and basis of valuation- lowest in the traditional and advanced method
respectively
Results and Discussion (Cont…)
Relationship between Knowledge and Practice
• Spearman rank correlation was used to determine the relationship between
knowledge and practice on methods of valuation. There is a negative
significant relationship between knowledge and practice in terms of
traditional [ρ (108) =-0.334, p=0.000] and advanced [ρ (108) =-0.339,
p=0.000] methods of valuation.
• The finding of this study of a negative significant relationship between
knowledge and practice of both methods of valuation (traditional and
advanced) means that real estate practitioners with higher knowledge do
not actively practice the profession.
Results and Discussion (Cont…)
Challenges encountered by real estate practitioners in the practice of
their profession
Challenges
1. Influence of property owners in fixing prices
2. Lack of adequate information and data
3. Absence of standards in valuation
4. Delay in the preparation of the schedule of market value for
taxation purposes
5. Lack of political support
5. Policy issues
6. Administrative concerns such as lack of budget and
equipment
7. Weak enforcement
f
%
98
100.00
96
97.90
64
65.30
56
57.14
46
46.94
46
46.94
41
41.83
32
35.95
Results and Discussion (Cont…)
To propose a Capability Building Program that can be
implemented
The results of the study were utilized as baseline information
in the crafting of a proposed capability building and
intervention
program which
include
technological
methodologies and advances to enhance the level of
knowledge towards a fair, just, and ethical practice of
property valuation by government and private real estate
practitioners.
Conclusion
1.
The average level of knowledge of real estate practitioners needs to be enhanced
due to the advent of information technology, globalization, and cross-border
investments due to the numerous excellent results reported in the literature on the
use of the advanced methods of valuation in practice, Real estate practitioners
should adapt to technology to bridge the gap between knowledge and practice.
2.
Stakeholders should devise strategies to promote an ethical valuation practice to
achieve a sustainable property valuation practice.
3.
Moreover, there is an urgent need to overhaul the property valuation system by
developing the data analysis skills of real estate practitioners because end-users
are demanding impeccable services that the current traditional methods of
valuation cannot meet.
Recommendations
• The Department of Finance (DOF) and Bureau of Local
Government Finance (BLGF) may utilize findings of the study to
draft policies for an accurate, fair, just, and ethical practice of
property valuation through compulsory higher education and
continuing professional education for qualified real estate
practitioners in both the government and private sector funded by
the national government. They may also conduct training programs
and provide appropriate technologies to practitioners.
Recommendations (Cont…)
• Members of the legislative council of local government units may use the findings
of this study to enact local ordinances to protect the interests of stakeholders on the
appropriate use of valuation methods by adopting a reliable knowledge base system
with the use of advanced technology. Further, appropriate funding shall be provided to
acquire the appropriate system.
• Associations of real estate practitioners in the government and the private
sector may adopt the proposed capability building program to enhance the level of
knowledge of their members and guide their practice towards a fair, just, and ethical
practice of the valuation profession to protect the interest of stakeholders and the
economy in general.
• Future researchers may utilize the findings of this study to conduct a qualitative study
on the satisfaction of property owners on the valuation of their real properties.
Practical Implications
 Despite the framework for an accurate, fair, and ethical
valuation, issues on the level of knowledge and the gap
between theory and practice were noted, which brought
about challenges for the adoption of appropriate methods
of valuation of real properties.
 Hence, the proposed capability building program for
implementation.
Original Value of the Paper
• The study significantly contributes to the limited literature
on property valuation.
• Also, the findings of the study may provide the baseline
information to a proposed capability building program.
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Madamo gd nga Salamat!
Thank you for listening