Why You Need to Diversify Your List of Valuers Across the Country

Our staff writer examines a persistent issue in Kenya’s mortgage industry— concentration of mortgage valuers in Nairobi at the expense of other major towns. Adding to this challenge is the concern that some valuation firms operate satellite offices staffed by unqualified personnel, often data capturers, who lack the expertise to accurately assess collateral.

According to a home loans specialist with a leading mortgage bank, “regional valuers bring unmatched insights into market conditions that Nairobi-based valuers often don’t have. They understand the specific factors that drive property values in their areas.”

Another significant concern for banks is the practice of some valuation firms operating satellite offices staffed by unqualified personnel. These offices are often managed by clerks or data capturers who may lack the professional training required to conduct thorough property assessments.

“We’ve encountered cases where site inspections are conducted by individuals with no professional training. The valuation reports from such offices often miss critical details, leaving banks exposed to significant risk.” Says the home loans specialist.

Valuation is not just about data collection; it requires professional judgment, market knowledge, and legal expertise. When unqualified personnel handle valuations, the risks to both lenders and borrowers increase. Reports can be incomplete or inaccurate, potentially leading to overvaluation or undervaluation of properties.

Bank may need to adopt a location-based approach to valuation for several reasons.

First, valuers with regional presence provide more than just convenience—they offer localized insights that ensure valuations are accurate and reflective of current market realities. Secondly, borrowers in remote areas benefit from faster turnaround times and reduced costs, as valuers don’t need to travel long distances.

A valuer, who wished to remain anonymous, highlights the cost benefits of engaging regional valuers: “Travel costs can sometimes double the valuation fee for some of these properties, especially for small borrowers. We do not accept work where we don’t have presence.”

However, having a regional presence may not be enough if non-professionals are involved in property inspections. The valuer emphasizes the importance of professional oversight, noting, “We’ve implemented standard reporting templates and regular training to ensure that all our staff have gone through the required education and certifications. Unfortunately, we are in competition with clerks who charge peanuts, and we end up losing business due to this.”

The risks of ignoring these issues are significant. Inaccurate collateral valuations can lead to over-lending or under-lending, putting into jeopardy a bank’s mortgage book. Banks may need to expand and diversify their panels with valuers who have a regional presence and a proven commitment to relying only on professionals.

As the valuer aptly puts it, “The success of a mortgage book isn’t just about numbers. It’s about working with valuers who bring both local knowledge and professional accountability to the table.”