TEGoVA General Assembly Endorses New European Valuation Standard (EVS 6) on Automated Valuation Models.

Endorsement of a new European Standard (EVS 6)

Undoubtedly the highlight of the meeting was the endorsement of a new European Standard (EVS 6) concerning the use of Automated Valuation Models (AVMs). The key message of EVS 6 with immediate effect, is that

"AVMs cannot be used to produce a valuation report that complies with EVS independently of a valuation process founded, inter alia, on inspection of the property by the valuer and the application of valuation judgment by the valuer. Where used, an AVM is never more than a tool contributing to the valuer's estimation of value, for which he remains responsible."

EVS 6 defines an AVMs as statistically-based computer programmes which use property information to generate property-related values or suggested values. A statistical method of valuation seeks to arrive at the value of a property directly through the application of a mathematical algorithm to a data base of transactions prices and property characteristics whilst omitting:

1. i) an explicit traditional valuation, such as a comparative or income based approach valuation and ii) a professional valuer's qualitative assessment of the value.

Hence, in the context of real estate valuation, an AVM is simply the mechanical application of an algorithmic procedure to the data presented to it, without taking into account a valuer's opinion as to other relevant information, without a physical inspection of the property and ignoring the weighting a valuer would place on the relevant information.

EVS 6 emphasises that an AVM is not a valuation. It can serve as a starting point for some buyers and sellers in considering a property's value. It can be used by the qualified valuer as one input in his comprehensive analysis of the market provided he is satisfied with his knowledge of the AVM's input data and model.

To complement EVS 6, the General Assembly also endorsed a new Guidance Note EVGN 11 titled "The Valuer's Use of Statistical Tools"

Both EVS 6 and EVGN 11 have been added to and constitute an enlarged part of the existing EVS 2016 (Eigth Ediition)

Presentations on the Subject

In keeping with the AVM theme of the Assembly, there were presentations on the subject by Michael MacBrien (Adviser to TEGoVA), Scott Robinson MAI SRA AI-GRS, Immediate Past President of the Appraisal Institute (AI) and Randy J Ripperger CAE, President of The International Association of Assessing Officers (IAAO).

REVASE

David Magor (Chief Executive, Institute of Revenues Rating and Valuation (IRRV) delivered a presentation on the EU sponsored Erasmus Plus project "Revase" concerning the promotion and teaching of European Valuation Standards

AMAS

REV Awarding Member Association status was granted to the National Association of Valuers of Montenegro (NAVM), The Ukrainian Association of Bank Valuation Specialists (UABVS) and the Ukrainian Society of Appraisers (USOA).

R-AMAs

TRV Awarding Member Association status was granted to the Dutch members NVM, VastogoedPro and VBO Makelaar.

The following associations were upgraded from Observer Member to Full Member and Associate Member of TEGoVA:

Respectively,

. IEV - ISTITUTO di ESTIMO e VALUTAZIONE (E-VALUATIONS) - Institute of Estimation and Valuation

. KAA - SHOQATES SE VLERESUESVE TE KOSOVES (SHVK) - Kosovo Appraisers Association (KAA)

Finally the following associations were admitted as TEGoVA members:

. IAAO - INTERNATIONAL ASSOCIATION of ASSESSING OFFICERS

. IVSP - INSTITUTI PËR VLERËSIME DHE STUDIME PRONËSORE (IVSP) - Institute for Appraisals and Property Studies (IAPS)

. UOPBiH -UDRUZENJE OVLASCENIH PROCJENJIVACA u BOSNI i HERCEGOVINI- Association of Certified Appraisers in Bosnia and Herzegovina (ACABH)

. UNIS - UNION DES SYNDICATS DE L'IMMOBILIER - National Union of Property Professions

The General Assembly meeting was preceded the day before by a Valuation Conference titled "Is the Real Estate Valuer the Market Compass". The conference which focused on issues of main concern to valuers in France was opened by Philippe Conté REV, President CEIF FNAIM, Denis Pelouse REV, President TEGoVA France and Krzysztof Grzesik FRICS REV, Chairrman of TEGoVA.

Estoril, 17-19 May 2018

The next TEGoVA General Meeting and European Valuation Conference organised by ASAVAL (ASSOCIAÇÃO PROFISSIONAL DAS SOCIEDADES DE AVALIAÇÃO) will be held in Estoril, Portugal on 17-19 May 2018.