Real Estate Valuation Under the Microscope... Will the New Regulations Serve as the Market's Catalyst?
Specialists to “Al-Siyasa”: Quality Depends on Competence, Methodology, Data, Independence, and Neutrality
Mubarak Al-Majdali: A crucial step to elevate the profession’s standards and establish minimum qualification and experience requirements
Abdullah Al-Muhanna: Transformed random individual judgments into more transparent regulatory frameworks
Abdulrahman Al-Dulijan: Methodological discipline and precision shield the appraiser from external pressures and factors
The real estate appraisal profession can no longer tolerate individual judgments or assessments lacking clear foundations, particularly given that appraisal reports are linked to financing, buying, selling, and legal dispute files. With the introduction of new regulatory requirements for the profession, the focus is shifting toward raising qualification and expertise levels, standardizing the minimum components of appraisal reports, and enhancing the independence and neutrality of appraisers.
Specialists told “Al-Siyasa” that the new regulations represent an important step toward improving the profession’s quality. However, its success in regulating the appraisal market requires an integrated system that goes beyond licensing and qualification, extending to the provision of official and transparent real estate data, standardized appraisal methodologies, and continuous professional development.
The specialists agreed that while the new requirements mark an important beginning in regulating the profession, they will not fully achieve their objectives without an official database, standardized appraisal criteria, and continuous programs for qualification and professional development.
M. Mubarak Al-Majdali, Secretary-General of the Kuwait Real Estate Appraisers Association, told “Al-Siyasa” that independence and neutrality are fundamental pillars of the real estate appraisal profession, especially when reports are submitted to judicial authorities. He noted that appraisal quality relies on three interconnected elements: technical competence, the quality of methodology and data, and independence and neutrality.
He considered that disclosing conflicts of interest and recusing oneself when factors exist that could affect an expert’s independence or neutrality, along with prohibiting experts from preparing reports on properties they have previously appraised or expressed opinions on, serve as two key guarantees to enhance trust in appraisal reports.
He pointed out that standardizing the minimum components of an appraisal report—from property data and documents to photos, plans, methodology, and final value—will make reports more transparent and subject to review.
“A Quantum Leap”
For his part, real estate appraiser Abdullah Al-Muhanna stated that the new requirements represent a quantum leap in the sector, as they shift the appraisal profession from individual judgments to regulatory frameworks that enhance transparency and reliability. He emphasized that the true guarantee of a “qualified expert’s” competence does not end with a license but is completed by integrity, continuous development, and field experience.
In a statement to “Al-Siyasa,” he explained that standardizing the elements of real estate appraisal reports is a fundamental step to reducing significant disparities in valuations. This is achieved by mandating appraisers to follow clear methodologies and document supporting documents, plans, and photos of field inspections, thereby ensuring that the final value is based on verifiable and auditable technical data and facts.
He noted that this regulation will enhance the reliability and legal weight of reports before judicial and financial authorities, while providing better protection for the rights of market participants. He added that the mandatory disclosure of conflicts of interest and recusal when factors affect an appraiser’s neutrality serves as a significant deterrent to ensure appraisal independence.
He further added that accurate reports based on scientific foundations help reduce arbitrary valuations, achieve greater fairness in determining the true value of properties, and assist banks in mitigating risks associated with overvalued assets.
He argued that implementing the new requirements could lead to the exit of some unqualified professionals from the market, viewing this as a positive filtering process that elevates the profession’s standards, although it is expected to initially result in a relative increase in valuation costs and completion times due to the demands of inspection, analysis, and documentation.
"Financing, Sales, and Disputes"
For his part, Abdulrahman Al-Dulijan, Secretary-General of the Saudi Society of Real Estate Appraisers, emphasized that methodological discipline and accuracy in report preparation serve as a shield for appraisers against external pressures and factors that may compromise valuation neutrality. He noted that this would positively impact real estate financing, buying and selling transactions, and legal disputes.
He clarified that financing institutions seek stability and certainty to avoid fluctuations in the value of collateralized assets. He explained that overvaluation might inflate financing ceilings and increase credit risks if prices are subsequently corrected, whereas disciplined valuation ensures more realistic coverage of collateral.
He pointed out that valuation accuracy holds particular importance in inheritance files, buyout processes, and disputes among heirs and partners, where the absence of uniform standards can lead to conflicting valuations and complicate conflicts. He stressed the importance of integration between appraisers and real estate brokers, especially given the need for an official and transparent database of real estate transactions.
He noted that the importance of the real estate appraiser is growing, as they serve as "knowledge experts" consulted by the General Department of Experts and whose opinions courts rely on in disputes. This makes the accuracy, discipline, and documentation of data crucial, particularly since market conditions may change during litigation. He predicted the exit of a segment of practitioners following the implementation of the new requirements, viewing this as a double-edged sword: on one hand, it helps cleanse the market of the unqualified; on the other, it may temporarily slow down report completion and increase costs due to enhanced analysis and professional qualification.
Haider: December 31 is the final deadline for appointed experts to regularize their status
The President of the Real Estate Brokers Union and a member of the committee tasked with amending the working conditions for "knowledge experts" confirmed that the reorganization of the profession was aimed at addressing concerns regarding the varying levels of some experts and the inaccuracy of certain real estate estimates, as well as the failure of some practitioners to adhere to international standards and academic foundations in valuation processes.
Speaking to "Al-Siyasa," he stated that the importance of the "knowledge expert" is linked to their direct impact on real estate prices and the market, necessitating that expert selection be based on competence and professional standards. He noted that the committee worked on establishing new requirements for registration with the Real Estate Registration and the Expert Management Department at the Ministry of Justice. He clarified that Ministerial Decision No. 585 of 2026, concerning the regulation of the knowledge expert profession, established a comprehensive framework for the profession, enhancing guarantees of integrity, disclosure, and avoidance of conflicts of interest. It also mandated actual practice of the valuation profession for at least five years, obtaining a minimum "C" classification, passing courses and exams approved by the Ministry of Commerce, alongside a personal interview before the specialized committee at the Ministry of Justice, and dedicating oneself fully to working as a knowledge expert.
He affirmed that these requirements do not aim to restrict the base of experts, but rather to select those with competence, considering that a knowledge expert is expected to represent the "elite of the elite" among certified appraisers.
"Valuation and Time"
Regarding the impact of the new requirements on the speed of completing sales transactions, he clarified that achieving a fair price requires the valuation report to include all data related to the property, its owner, the valuation date, descriptions, and plans, along with a statement of the valuation methodology used. Addressing concerns that the strictness of the requirements might lead to a decline in the number of experts and higher valuation costs, he emphasized that priority must be given to the quality of experts and their performance levels, citing the Kuwaiti proverb, “The surplus is the brother of the deficit.”
He noted that Article Eight of the decision stipulated the fees for expert valuers across various sectors, including residential, investment, commercial, industrial, agricultural, shops, and chalets.
“Regularizing Status”
He clarified that the decision set December 31, 2026, as the deadline for appointed experts to regularize their status, stressing that the success of the decision requires adherence to its standards and non-interference of nepotism or favoritism in the appointment of expert valuers.
“Civil Information” Transfers Electronic Contracts File to “Commerce”
Emad Haider, President of the Real Estate Brokers Union, revealed that the Public Authority for Civil Information (PACI) has approved transferring the file of electronic contracts to the Ministry of Commerce and Industry, which will assume responsibility for updating contracts and monitoring electronic procedures associated with them.
Haider stated that PACI is currently preparing the necessary data and information for handover to the Ministry of Commerce and Industry, expecting the transfer process to be completed within one to two months. Consequently, the Ministry’s information systems will take charge of managing electronic contracts and monitoring their future updates.
He explained that transferring responsibility for electronic contracts to the Ministry of Commerce and Industry represents a significant step that will reduce the time and effort required for continuous contract updates, especially given the heavy burdens borne by PACI, which manages and supervises a large number of government applications and services, including the “Huwiyati” and “Sahl” applications, alongside the civil ID system and other digital services. Haider affirmed that entrusting this file to the Ministry of Commerce and Industry, as the authority directly concerned with regulating and monitoring commercial and real estate activities, will enhance the speed of data updates and improve the efficiency of electronic procedures linked to the real estate market.
He pointed out that this step also helps address several observations related to the requirements of the Financial Action Task Force (FATF), particularly concerning strengthening electronic linkages between government entities and digitizing services and procedures in the real estate market, thereby supporting transparency and raising the efficiency of electronic real estate transactions. Haider stressed the importance of completing the linkage and data transfer process in an organized manner, ensuring uninterrupted service continuity and enabling the Ministry of Commerce and Industry to develop the electronic contracts system in line with digital transformation requirements and the modernization of government services.
