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Are property valuers undermining brokers?

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Australian Broker | 26 Jun 2013, 08:00 AM Agree 0
One Perth broker claims she's seen clients' homes under-valued by as much as $50,000. Is this an isolated issue?
  • mac | 26 Jun 2013, 09:14 AM Agree 0
    This is has been happening since Adam was a boy. Its not a rising market for the valuers until it has well and truly already happened. If you were a valuer you would do the same they are under incredible pressure for their reward of $200.
  • Ben | 26 Jun 2013, 09:36 AM Agree 0
    $50,000 difference?
    Try $130,000 difference on a TOC valuation in an affluent inner Adelaide suburb. "Over-capitalising" was the reason. $670k to $800k bank. One must question the credibility of an industry that has the potential to be so different from valuer to valuer.
  • PB | 26 Jun 2013, 09:38 AM Agree 0
    Needed Valuation of $420,000. Valuation carried out by Macquarie panel valuer $345,000. Valuation carried out by Liberty panel valuer two days later $390,000. Endeavour Hills.
  • Brisbane Broker | 26 Jun 2013, 09:47 AM Agree 0
    it is not the valuers that is the problem, valuers are getting instructed by Mi & Banks how to value the properties. Had first hand experience with valuer regarding this.
  • Allan Faint | 26 Jun 2013, 09:48 AM Agree 0
    not only in perth. cant remeber the last time a purchase came in under valued. yet if it is a construction, where the same situation applies where somebody is willing to pay the amount, the vals are constantly short. the reason being, comparable sales. Yet the new homes have to have double glazing and all the extra gear that the properties they are compared with do not. Yet the prices have to be comaparble yet the product is not. lets not discuss the charade of valuations for refinancing. when statisice show in some areas drops of 3-4% over the past year, why are the vals appear to be more than 10 - 20% down??? how is the building industry supposed to pick up if valuers keep killing construction deals.
  • brado | 26 Jun 2013, 09:51 AM Agree 0
    Yep... last week a client offered 635k on a house in an area he had been researching for 2 years. Valuer says no its 600k... client loses dream home for some moron too scared to agree with an on market purchase price.... valuers are a massive cause for concern in this country. .
  • Country Broker | 26 Jun 2013, 09:53 AM Agree 0
    I have been a broker and lender for over 30 years this dilemma is nothing new .
    Valuers do not set out to undermine brokers , what is happening is they try to base their valuation on recent sales and most of the time they use data bases to identify those sale . This is the problem as those data , and also their local knowledge and information from agents . The problem they face is the data bases they use may not be that relevant in that the information on them may be over 60 days old , also lack of comparable sale in the area can cause problems . Yes valuers are getting sued , it is not just that they may be sued. The is being caused by the banks and Mortgage Insurers being very quick at times to sue when there is a loss. The other problem is they are not being paid as much as they were by the valuation bureaus and this must cause them to do the job but perhaps not spend as much time on it besides the inspection and data base comparisons .
    As the article says it is NOT an exact science.
  • Unsilent majority | 26 Jun 2013, 09:55 AM Agree 0
    undoubtedly. Valuers are incompetent & undermine the whole industry and adversely effect peoples lives. Haven't met one I've liked.
  • BJ | 26 Jun 2013, 10:02 AM Agree 0
    Seriously can you suggest valuers are undervaluing assets.
    Frank spot on.
    This is the real world and the old “let’s get it valued up” days are gone. Brokers need to be realistic and if a broker was a property expert (which most are not) they would be in the property business. You’re not, you’re in the home loan sales business.
    Correct Mac, enormous pressure to get it right and if they get it wrong, Mmm that is a PI issue.
  • Ash | 26 Jun 2013, 10:04 AM Agree 0
    Given the impact it has on the whole process perhaps we should be attaching a higher cost to the process to ensure that the most correct information is used. How much effort would you put in for $200
  • Davo | 26 Jun 2013, 10:10 AM Agree 0
    2br Unit in Waterloo. $500k valuation then $580k valuation a week later.
  • Rocky | 26 Jun 2013, 10:11 AM Agree 0
    Valuers have a GOD complex where they believe that they're required to decide on what the market value is, rather than the market itself. I just had a couple on the Gold Coast sign a contract on a property advertised by 4 local real estate agents at $1.5 mil. They negotiated $1,262,000. The valuer from CBRE valued the property at $1 mil. If there is a willing buyer, and a willing seller, and a licensed real estate agent in the middle, why would a valuer bring the valuation in at 22% less than the contract price? The real estate agent presented the valuer with the valuation that was done only 12 months ago when the seller purchased the property - in a worse market - at $1,380,000. The real problem is that the banks believe that if one valuer says that its true... it must be. Why any bank would run a business based on the information from these valuers will never cease to amaze me. What hope have we got?
  • Tony | 26 Jun 2013, 10:12 AM Agree 0
    Per Franks Comment this is a major concern not a pocket!
    This is happening north, south and west- all areas!
    I am sick of tired getting updated information and supplying it lender to get it increased
    Or even more frustrating supplying the information and won’t budge, even if the evidence shows the true value.
    My view if the Valuers can’t do their job by supplying update and relevant information Valuers should not be paid for substandard performance
    And be accountable for their incompetence as they effect people lives and health
  • Daniel | 26 Jun 2013, 10:14 AM Agree 0
    Had valuation in Abbotsford coming in 110K short, panel valuer BOM. Panel valuer Macquarie on contract price. The same BOM valuer valued another apartment in the same building on contract price, where the same Macquarie valuer valued it 50K short. Don't know what's going on.
  • Brisbane Broker | 26 Jun 2013, 10:14 AM Agree 0
    The valuers are definitely using old data and hence are able to justify their numbers with these old comparable sales. If they actually had the time to do a correct comparison ( due to bank pressure of minimising costs therefore needing to complete more valuations to make the same income ) then we would be able to get the appropriate data that have true reflections of the prices. Then the properties we are requesting valuations on would be valued correctly and show true comparisons which reflect the current market.
  • Chris | 26 Jun 2013, 10:15 AM Agree 0
    Yes agree, values are worried about being sued by LMI. I have a valuation carried out for divorce purposes, which come in at $780,000 for loan $590,000 but Banks valuer come in at $700,000 after dispute Valex come back and agreed. Again disputed and this time with more evidence obtain another valuation at $740,000. Why the difference?
  • D Goh | 26 Jun 2013, 10:17 AM Agree 0
    I have the same problem in Perth so I printout a RRP report if the application nowadays. Problem still exist with some valuers but lesser. I will sending a copy of the RRP report to the client before valuer turns up, to keep them honest.
  • Raman | 26 Jun 2013, 10:23 AM Agree 0
    There are very diligent valuers but so are many who are too conservative to the detriment of so many buyers. I had a TOC val done by three different firms on a property and the difference in the figures was $140000 on $675000! This is in sub-urban Vic. There are certain post codes where valuing at $30-50K less than offered is the Dharma. One such suburb is ranked 5th in the top 50 hottest in Oz; beat this!
  • ID | 26 Jun 2013, 10:24 AM Agree 0
    Under pressure?? Are you kidding. These guys apparently study for 6 years to become a valuer. They get paid $200 because they lack consistancy, and understanding of the market with which they operate. I had 2 applications for construction come in at $20,000 under contract and the other $35,000 under contract. 2 very similar lots of land(in fact next to each other) and house sizes. Specs of the homes similar as were to be constructioned by the same builder. The vals were done 24 hours apart. Just crazy. I also had a block of land valued at $120K under contract because a valuer said it went under in the Brisbane 2011 floods. In fact I had sent in an overhead picture of the block (with a house either side) confirming it was well over 1km away from the water at its peak. This guy didn't get out of his leather chair to investigate. I have no respect for any valuer and they are all clueless. Stand up and do the right thing, is all I ask.
  • Garry | 26 Jun 2013, 10:28 AM Agree 0
    This issue isnt only in Perth. Victorian valuers are also just as incompetent and are more concerned about protecting their insurance premiums. I write approximately $80-90M annually and am always arguing with valuers. Off the plan properties are a particular issue with valuers and have always been undervalued. When it comes down to finding comparible properties, opinion seems to win out over actual valuation. Opinion rather than proven valuations are also not isolated to off the plan properties either. Its often used in existing properties. When doing LVR calculations I have for the past 2 years been using known 2009 valuations and the valuers have always stated the valuations are less than I have stated in the applications. This often has the effect of pushing the client into LMI territory. The behaviour of VIC valuers are an absolute disgrace and the banks are just as bad. The banks are supposed to have valuation support teams but the only support given is to the valuers and not the brokers. A big part of the problem is that the banks pay very little for the valuations to be done and the valuers are not going to put much effort if they dont get paid enough. Unfortunately, with valuations we are getting what the banks are paying for. Its about time this whole system was changed.
    A valuation must be proven beyond doubt and opinion should never come into it yet the banks accept this behaviour. When we dare chalenge the valuation we are told to "prove" the valuer wrong and supply valuations based on a tighter criterier than the valuers are allowed to use. We are not being paid to do the valuations. We are also critiqued on the quality of the applications yet for some reason the valuers are not critiqued on their work. I would say the banks need to shoulder their share of blame for this as much as the valuers. They have known this rubbish is going on for years and have done nothing because it suite them to ignore it.
  • GW | 26 Jun 2013, 10:36 AM Agree 0
    Agree with Allan. Definitely a problem with construction or new development properties. Land value is as is and construction costs is as is, yet valuers bringing under by a minimum 5-10%. This is a major problem for our construction industry. Investors will always pay for new stock as land and construction value over established stock, in view of depreciation benefits. Its a very frustrating situation.
  • Don | 26 Jun 2013, 10:38 AM Agree 0
    hi mac if the valuer was doing that because of low pay then he should leave the industry. It is unecthical and unprofessional probably misleading and the damages he was causing the property owner.
  • David | 26 Jun 2013, 10:38 AM Agree 0
    Sworn valuation in Melbourne for legal purposes. Bank valuation for finance purposes. Bank valuation was $70,000 lower on a $500K property.
    And another: property purchased by FHBs at auction for $515K with 80% lend. Valuation $513K pushing clients into providing more funds or subject to LMI. The difference was 0.4%. Valuer refused to budge even though a percentage of his valuation is based on subjective opinion.
    And finally, Valex valuer refused to value a property until building contract and plans/specs were provided. Property had been established for at least 30 years with no construction work underway. Was told the valuer knew the property and I didn't know what I was talking about. The property was in my street, and I have been walking my dog past it for the past 2 years! Valex refused to conduct valuation until lender intervened and changed valuer. All I needed was a kerbside which the new valuer conducted within 2 hours. All up, with Valex's delays with original valuer the whole valuaton process took almost 3 weeks.
    Now finding some valuers are asking brokers to provide comparative sales. Many valuers are very good - but some can only be described as incompetent.
  • Mark Perth | 26 Jun 2013, 10:45 AM Agree 0
    The worst part of this is that no matter what happens to a deal the Valuer gets paid, we lose deals regularly because of their incompetence, they ask us to provide sales evidence? is that not there job to be up to date on Sales in a given area, In Perth we have a median house price that is nearly the same as pre GFC but can you tell that to a Valuer? NO
  • Ray-Perth | 26 Jun 2013, 10:45 AM Agree 0
    I have NO problems with the valuations coming back from the valuers. None what so ever. To support this I have had two valuations done recently where the owners ended up selling and the end sale price was so close to the valuers report. Some brokers are being unrealistic and forgetting values in many places have not moved since 2006 !!
  • Brado | 26 Jun 2013, 11:01 AM Agree 0
    Rocky.... that's exactly it!!!!
  • Rob C | 26 Jun 2013, 11:16 AM Agree 0
    Always a concern waitng on a Val to be done.
    Especially if the LVR is high.
    $200 for a val X 6 in a day is still good money in my books. Considering that the current arrangements with a number of banks is now fundamentally different.
    Out dated data, Yes. Prima Donna's, quite a majority, conservatiitve, YES, but still a necessary part of the loan procedure. Not sure what the answer is, but on reading all the comments, it is of concern to us all. Can only suggest, if a valuation is in dispute, and we are required to do further research, maybe we start charging the banks $200.00 for our time. They are the ones who want our business.
    This is always going to be a problem.
  • Shannon | 26 Jun 2013, 11:23 AM Agree 0
    I had 2 valuations in the last couple of months return significantly under clients expectations (this is normal as we all like to think our properties are worth a little bit more).
    What isn't normal was the fact that I got these same properties revalued with another bank and 1 came on $300k more (original val was $950k so this is a significant percentage). The other property came in $550k more (original val was $2.4m).
    Amazing differences and surely beyond the realms of just "subjective" differences between valuers.
  • Steve McClure | 26 Jun 2013, 11:26 AM Agree 0
    I support the valuers, their task is a minefield. They have to predict sales that result from people's whims, problems and a myriad of unpredictable factors. They are under pressure from parties with conflicting interests, urgent time frames and the economics of providing a professional service at a diminishing fee. A subsequent sale that will usually vary - but that doesn't mean the valuer has erred. They get no credit when they get it spot on and of course we’ll get variations.

    What I am critical of however is undue reliance on data from RPData, where "auto" valuation figures may influence the reports. By pushing down fees paid to valuers, lenders are relegating valuations to tick & flick reports instead of a professional's opinion. I'm also critical of lenders inflexibility in allowing valuers to revisit reports when subsequent relevant information comes to hand.
  • Mark Perth | 26 Jun 2013, 11:34 AM Agree 0
    To Ray, are you serious!! you would have to be one of the lucky ones in Perth, I speak to BDM"S from all of the Banks,Non Banks and they all have the same issues, low Values, Please tell us who your Valuers are and I will do my best to get the Business to them.
  • David | 26 Jun 2013, 11:47 AM Agree 0
    Valuer bashing is easy. Our PI insurance is upwards of $50,000 per year for a two man business and we cant always get 6 done in a day, in fact lucky to average 4 per day. Do the maths and its not pretty. Mortgage insurers are the parasites who rely on our valuations as a secondary party and contribute nothing toward our fee yet sue us at the drop of a hat when things go pear shaped with their over committed client. Brokers put too many people into loans they can't afford because all they care about is making the deal. The only person who wears the risk at the end of the day is the valuer. I do agree that there should be more consistency.
  • Anthony | 26 Jun 2013, 12:07 PM Agree 0
    Valuers are in a land of their own. More concerned about their PI insurance than giving a true estimate of a property.
  • Mark Perth | 26 Jun 2013, 12:10 PM Agree 0
    Typical comment from a Valuer, as Brokers we are Conduits between the Lender and Borrower ,how can we give people loans who cannot afford them, that is up to the Lender to approve the loan based on the information that a Client supplies to the Broker, if a loan does not Service then why would we put that up for an Approval? besides that a Valuers role is to value a property to what is is supposed to be worth, not worrying about the clients capacity to service a loan.
  • BJ | 26 Jun 2013, 12:17 PM Agree 0
    Self interest and rubbish comments reflect poorly on your mortgage broking industry.

    If you would like to be taken seriously, make constructive and informed debate. Rather than "my home loan sale fell over because".

    Valuers operate a business with no trail commission, and like you all carry excessive risk.

    Any wonder your industry is under constant criticism.
  • Mark Perth | 26 Jun 2013, 12:42 PM Agree 0
    BJ not a clue, come and work in my office for 1 day and then make your call on the Mortgage Broking Industry.
  • Garry | 26 Jun 2013, 12:56 PM Agree 0
    BJ, get off your high horse and face reality. If valuers did their job properly there would be no "bashing". You supposedly value property based on recent sales figures but there are so many instances as in the comments here where you have the audacity and arrogance to state YOU think someone has paid too much for the purchased property and therefore undervalue the property. This issue also extends to construction where I have seen comments based around "overcapitolising". That is not your call yet you still use opinion and not fact. The two behaviours dont match and you clearly dont get it. You rely on one point of view and then dont always follow it when it suits you.
    I actually applaud David as he at least had the guts to admit where he is coming from.
    For what its worth the broker industry is not under constant critisism. If it was constantly critisised, it wouldnt be a growing industry. If you cant handle the heat then get out and let professionals in to do the job properly.
  • Rocky | 26 Jun 2013, 12:56 PM Agree 0
    Valuers now telling us that people can't afford the loan and THAT'S THE REASON that they're undervaluing properties. Please, if you don't like the industry and you can't make any money wouldn't it be better to find something else? I'm still not sure I get the connection between I CAN'T MAKE ANY MONEY therefore I'LL BRING VALUATIONS IN LOW? So because valuers don't get paid enough they're bringing in the vals low... is that what you're saying as a valuer? I must be missing something. Although I'm probably not the sharpest tool in the shed.
  • OccamsToothbrush | 26 Jun 2013, 12:58 PM Agree 0
    It's been apparent to me for some time that the world's best economists and investment advisers are all driving cabs, but I had no idea that Australia's most educated and informed property valuers are actually working as mortgage brokers.

    Colour me shocked ;)
  • BJ | 26 Jun 2013, 01:02 PM Agree 0

    Let us simply agree to disagree. You are clearly an authority on all matters broking and any other party interested in the debate is without a clue.

    Thanks for your insight. Last post on any Broker Forum for me as I simply can't contribute value. Cheers BJ
  • Perth Broker | 26 Jun 2013, 01:46 PM Agree 0
    Unfortunately the valuers in Perth seem to be a law unto themselves. A vast majority of them are so inexperienced they have come straight out of UNi and never even bought or sold a house themselves.

    I had an example just recently for a land a construction loan. The valuer who valued the land purchase did not mention the fact that there were High TEnsion power lines 2 blocks away from the subject land block. When the construction valuation was completed the valuer who did that said the power lines were within 50m of the block!!!

    Also had two examples where the valuers have commented in their reports that there was no provision in the contracts for floor coverings when in fact there was provision. Are they not reading the contracts and just guessing???
  • Steve McClure | 26 Jun 2013, 01:47 PM Agree 0
    The valuers' points are valid. Sure, I've suffered low valuations, but its not a conspiracy and I've successfully appealed some. My view is we need to do facilitate contact from valuers before it gets to that point. Unfortunately, some comments here aren't encouraging that sort of solution.
  • David | 26 Jun 2013, 02:09 PM Agree 0
    No Rocky thats not what I was inferring. I was responding to the broker who indicated that we do "6 valuations a day" and just trying to put it into some sort of perspective for the readers. The valuers role is simple. Analyse the available sales evidence and support the valuation figure with recent sales:-a) which are clearly slightly superior and b) sales which are clearly slightly inferior. The value of the property will lie somewhere in between. Occasionally sales may have occurred that the valuer is unaware of and in these cases the report can be reviewed. But remember that 'one sale does not a market make'. I am not seeing a lot of constructive comments coming though this forum so I will sign out now. Good luck.
  • Valuer | 26 Jun 2013, 02:23 PM Agree 0
    Firstly guys i feel that all you fellows may look at yourselves before you round up the mob and hold your own kangaroo court. As a valuer i do ask the applicant (home owner) on what their owners estimate actually is for their own property. And what do you know It is very seldom the same as that that has been provided by the broker. Sometimes it's increased as much as 100k on a 380k dwelling. I wonder how this could occur??? It's not that the broker has any personal gain by fraudulently preparing and submitting the documentation, is there??? If you fellows ceased this practice I'm sure there would be much more consistency in the reports. Even a dumb dog won't jump for a stick if you climb a ladder and hold it out. PS This is to go out to all those brokers out there who know it all - most valuers actually get paid 40-50% of the fee not $200 (so that will really rock your world). Some jobs may take up to half a day to prepare (researching the job, booking the job, travel, writing reports, preparing invoices, obtaining missing documentation, updating statuses, analysis of and recording sales data, checking zonings, researching environmental issues, preparing and analyzing spreadsheets (summation approach), writing reports, etc etc), so do you really believe a valuer wants a dispute query lodged on any job???? IT IS NOT IN THE VALUER'S INTEREST WHATSOEVER TO UNDER VALUE A PROPERTY!
  • Steve McClure | 26 Jun 2013, 02:32 PM Agree 0
    The valuers' points are valid. Sure, I've suffered low valuations, but its not a conspiracy and I've successfully appealed some. My view is we need to do facilitate contact from valuers before it gets to that point. Unfortunately, some comments here aren't encouraging that sort of solution.
  • Luke Scott - BSmart QLD | 26 Jun 2013, 02:44 PM Agree 0
    I agree that this is not good enough for all of us. I dislike having to show comparable sales to prove my point as we don't get paid to do this part of the job, and if the valuer isn't getting paid enough to value fairly with proper research then why don't they move away from a quantity model to a research and quality model? . we also use 2 different online valuation companies (rp data and investar) before refinancing and the variance is huge even then.

    We are having problems with new builds as well. I would love for my clients to be able to buy a new house at what a valuer believes it is worth. with this part of the market being sluggish surely the builders are pricing competitively to win the work right now?

    I dont have an answer for it all. but am happy to try and find a solution. anyone else?
  • Bob - Valuer | 26 Jun 2013, 04:13 PM Agree 0
    Our valuation firm, used the most recent sales evidence, VALEX gave a blanket directive sales must have settled before they can be used in the report, leading to out dated sale evidence. Valex is the problem! no competition, conflict of interest as Valex and RP Data are in bed together. Valex is trying to take over the role of the API in the mortgage space and setting its own standards. Valuers are sick of it and would like to see banks abandon Valex and return to their own panel management. The experiment has failed.
  • Perth Broker | 26 Jun 2013, 04:36 PM Agree 0
    Unfortunately the valuers in Perth seem to be a law unto themselves. A vast majority of them are so inexperienced they have come straight out of UNi and never even bought or sold a house themselves.

    I had an example just recently for a land a construction loan. The valuer who valued the land purchase did not mention the fact that there were High TEnsion power lines 2 blocks away from the subject land block. When the construction valuation was completed the valuer who did that said the power lines were within 50m of the block!!!

    Also had two examples where the valuers have commented in their reports that there was no provision in the contracts for floor coverings when in fact there was provision. Are they not reading the contracts and just guessing???
  • Vic - Valuer | 26 Jun 2013, 06:02 PM Agree 0
    You think its bad now, wait till valex have there AVM up and running, and some computer programmer in India dictates your valuation figure. Valex is the problem, the experiment has failed, its time for banks to go back to managing their own panel.
  • Papery | 26 Jun 2013, 08:10 PM Agree 0
    Oh my.... Maybe we should go back to the bad old days when the local branch's lowly loans officer did valuations on his way back from a boozy extended lunch.
  • AB | 27 Jun 2013, 06:49 AM Agree 0
    Maybe the next article should be 'are brokers undermining the banks'. Valuers are the barrier between brokers writing bad loans on bad property, no matter what it takes. As long as the broker gets their commission cheque.

    Don't get me wrong, there are some great brokers out there. Great people doing great things. But there are some who I would like to a dodgy used car salesman.
  • Valuer | 27 Jun 2013, 06:54 AM Agree 0
    Brokers are cowboys too dumb and dodgy to get a job at a bank. Have some respect.
  • Vic - Valuer | 27 Jun 2013, 08:07 AM Agree 0
    C'mon guys lets lift the tone of the debate, it helps no one to hurl abuse at each other.

    Banks didn't want to employ valuation teams any more, so they got rid of them and out sourced the task to the large valuation houses. Banks didn't want teams of loan officers any more, so they have out sourced it to independent brokers(loan salesmen). Banks don't want expensive suburban branches, so they are shutting them down and trying to force us to internet and phone banking. Its all about cutting costs.

    Banks don't see any great value in a valuation report, until the loan goes sour and they are looking to recoup their money, they have even found a way to sift that risk to the Mortgage Insurer, with the premium paid by the applicant, purchasing a product that protects the lender.

    Banks aren't ever going to pay the true value of a valuation report, regardless of how well it is researched or written. If you don't like it go and get a diploma and become a broker, I hear they make good money.

    Brokers are salesmen, of course they are going to sell the product that makes them the most income, deh! and as all salesmen they are going to do what ever it takes to make the deal. THAT'S THEIR JOB! Is it true most were insurance salesmen with AMP in the 80's.

    The role of the value is not as the gate keeper, or to keep the bastards honest. The valuers role is to report the current fair market value of the subject property and the risks associated with lending/using the property for security, within the constraints of the instructions given by the bank, AND THAT'S IT!

    Valuers should have the courage to be able to defend their valuations. and to hell with their PI insurer, because we are all writing reports that comply with API standards and haven't been negligent in the way we go about our work. RIGHT! So why worry about getting sued, there are two types of valuers, those who have been sued and those about to get a writ. Sure we are the scape goats when it all goes wrong. Do the job properly and let them take their best shot, it wont get far. And yes valuers have been and are sued for under valuations, especially in the commercial and family law fields.

    Inexperienced valuers can be a problem, but the fees paid are not enough to support a senior valuer supervising their work any more than superficially. I personally believe all valuer should spend 3 months in a real estate agency to understand how property is transacted.

    Perhaps valuers should spend some time with their local brokers, learn how to be a salesmen, and then sell the service they offer for a higher fee, instead of settling for the crumbs off the banks mortgage table.

    Valuers need brokers to write more loan applications, so valuers get more work. Brokers need valuers to provide accurate valuations so that the business goes through to loans. WE NEED EACH OTHER GUYS!

    It wasn't that long ago we talked to each other, then valex came along, made up their own rules and stopped all that relationship building. Brokers you know your local valuers, pick up the phone and talk to them, valuers you know who your local brokers are pick up the phone and talk to them, we call the local estate agents, why not the local brokers? Don't be afraid to defend your valuations. Explain to brokers where the problems lie, lack of sales evidence, poor instructions, poor documentation, what ever.
  • Mac | 27 Jun 2013, 08:30 AM Agree 0
    Nice troll there @ valuer.

    Seriously though you valuers need to demand higher pay from your customers or get out. Many a lazy valuation have I seen Jedi.
  • Aussie Franchisee | 27 Jun 2013, 08:38 AM Agree 0
    A few fair arguments thus far...

    Given my best friend is a valuer, we've had numerous discussions around his responsibilities and requirements. From my understanding, it appears to be a relatively difficult position to be in.

    As a broker, I strongly disagree with Bank & Valuer bashing. In my experience with Valuers, if I've got a client whose transaction is on the cusp of LMI or falling over and a slight increase in the fair market value is all that is required, most valuers I've spoken to have been happy to amend to make it work. For this, I thank them as it correlates with my business model of Customer First.

    I agree that there are some aspects to Valex's process that can be frustrating, especially their dispute process. However, I must commend them on ensuring all of my broker's valulations are followed up on and ensuring they're completed and returned compliant with the SLA's.

    I am strongly of the opinion that rather than bank and valuer bashing, if the deal is not going to work, move on and workshop another solution if possible, or revisit the case upon further market sales. Complacency is the biggest time waster and finger pointing is completely unconstructive. We're all here to ensure customers are getting what they require within the set guidelines. Thank you to valuers for helping our customers to try and avoid negative equity!
  • Rocky | 27 Jun 2013, 09:12 AM Agree 0
    Can somebody please explain this to me, because I'm definitely missing the point. Valuers are saying that there are dodgy brokers out there, and that's why we're bringing valuation in low. Before it was we're not getting paid enough. Then it was that people can't afford the loans. I would think that if valuers just worried about valuing properties at their real value, and tried to forget about saving the world, we might get some real values. Remember a valuer's opinion isn't the market value. The market determines the market value. Real buyers and real sellers. If valuers accepted this, and stopped cutting valuations on Contract Prices, we'd all be living in a happier world. Just my humble opinion.
  • Perth broker | 27 Jun 2013, 10:39 AM Agree 0
    I totaly understand that it is a difficult job. however when you have a rising market and the offer and acceptance is presented for valuation purposes and old market evidence is used how will the housing market move?

    A mortgage insured appliction will most likely require a full walk through valuation and subject to recent sales evidence, most likely at that point, our often first home buyer is declined of finance due to short valuation. An application with an LVR less than 80% on the same property most likely wont require a full valuation in fact often contract of sale prevails. those sales then become market evidence.

    it also seems as though some of the information used to compare recent sales are still an opinion of the valuer who has often not actually inspected that property being used as a comparison.

    I dont think it is so much 'are property valuers undermining brokers' as 'are property valuers stiffling our property market growth"?
  • Allan Faint | 27 Jun 2013, 10:50 AM Agree 0
    I also wonder about why we have valex. is it only to give banks one further reason to be able to say its not our fault, we did not order the valuation. I see no benefit to the clients, brokers or valuers.
  • overtheborderbroker | 27 Jun 2013, 11:29 AM Agree 0
    There is little to be gained trying to point score against each other. Not one broker complained in the early 2000's when valuers were regularly giving us written appraisals higher than owners estimates, and on occasions higher than contract price. We were happy little wood ducks back then eh? Not one of us complained when we could go to RAMS and choose our favorite valuer from their panel so that we were able to stack up a deal. How many of our clients are now sitting on properties purchased mid 2000's with LVR's now at 110% or 120% and they can't sell? Don't get me wrong I get the irrits when I receive back short val's and this happens frequently. But also I still see a ton of developers who have an inflated opinion of their product and they simply over price and try and bully everyone in the chain to believing their over valued opinion. I see owners with no realism whatsoever on where the market is really at, also arguing that their special value added home is worth thousands more than similar in the same street or precinct. The valuation system causes annoyance, grief, confusion, lost deals and irritation all around but it does provide a safety net to protect banks from dodgy deals, some brokers from their own potential behaviour and at the end of the day, borrowers who often exude confidence going into a deal and then go looking for a scapegoat when it all goes horribly wrong.
  • Papery | 27 Jun 2013, 12:08 PM Agree 0

  • overtheborderbroker | 27 Jun 2013, 01:16 PM Agree 0
    There is little to be gained trying to point score against each other. Not one broker complained in the early 2000's when valuers were regularly giving us written appraisals higher than owners estimates, and on occasions higher than contract price. We were happy little wood ducks back then eh? Not one of us complained when we could go to RAMS and choose our favorite valuer from their panel so that we were able to stack up a deal. How many of our clients are now sitting on properties purchased mid 2000's with LVR's now at 110% or 120% and they can't sell? Don't get me wrong I get the irrits when I receive back short val's and this happens frequently. But also I still see a ton of developers who have an inflated opinion of their product and they simply over price and try and bully everyone in the chain to believing their over valued opinion. I see owners with no realism whatsoever on where the market is really at, also arguing that their special value added home is worth thousands more than similar in the same street or precinct. The valuation system causes annoyance, grief, confusion, lost deals and irritation all around but it does provide a safety net to protect banks from dodgy deals, some brokers from their own potential behaviour and at the end of the day, borrowers who often exude confidence going into a deal and then go looking for a scapegoat when it all goes horribly wrong.
  • GW | 27 Jun 2013, 03:14 PM Agree 0
    Fair comment overtheborder, but do you know that the same valuers value developments for developers and then strip them to bits when they value the same properties for the end buyer. I've seen it happen countless times and it's completely unprofessional and wrong.
  • Garry | 28 Jun 2013, 08:32 AM Agree 0
    overtheborderbroker - I completey agree with GW. The valuers value the properties to enable the devleoper to gain the funding and then refuse to stand by the valuations when it comes time for settlement stating "its a conflict of interest". You also simply base your"opinion" / valuation on the median values and refuse to look at the quality build and site, views of the complex. I recently settled 36 units in Melbourne for clients and everyone was valued at $7.5K / sqm when comparible properties re-sold for $10-11K sqm in the same complex and in the general area for comparible, quality properties.
    One valuer had the arrogance to state the delevloper had the measurements wrong - I didnt know valuers knew better than the builder who built the development.
    We are all sick and tired of the ongoing arguments. The banks have also had enough and steps are apparently being taken to recitify the issues. As soon as valuers realise they are not doing the job as it was years ago the better off we will all be. Its time valuers did their job properly, professionally. Its also advisible to stop trying to assume you know more about finance than brokers or assuming someone is over capitolising their property which is again nothing more than an opinion. I often hear the idiotic sermons of "too many apartments are being built and this has an impact on future values. Yet for some reason the "too many apartments" actually get sold at the appropriate value, so their cant really be too many being built can there? If there were to many we would see be a glut of unsold properties. I developers couldnt sell them they wouldnt build more.
    Have any of you valuers actually thought about the fact that the government cant afford the infrastructure costs and this is the prime reason for all of the apartments being built? Its far cheaper to build using air space than using land space. I would say you have but it doesnt suit your position to tell the truth or accept the obvious. You are all too busy preaching your theories / opinions and protecting your butts from insureance premiums, LMI and the banks.
    Do YOUR job, not ours, leave opinion out of the reports and be professional. The comments below all seem to state the same thing. Wake up and take note. If everybody is saying the same thing there MUST be truth in what we are ALL saying - wouldnt you agree?
  • Allan Faint | 28 Jun 2013, 09:28 AM Agree 0
    I can remember 2 years ago having a discussion with a valuer about the fact that he was including concerns about global warming into his valuations on water front Hobart properties. imagine knowing 50 years in advance that water front properties are to be affected by rising water. would love to have that crystal ball.
  • Banker | 28 Jun 2013, 03:56 PM Agree 0
    I really don't think that we can tar all valuers with the same brush!

    There are some GREAT valuers out there who have a wealth of market knowledge and commercial acumen who are aware of the impact that their assessment has on the entire process.

    And there are some pretty average ones.
  • David - Valex/RPDATA | 09 Jul 2013, 01:41 PM Agree 0
    Don’t want to start a fight with anyone, however just want set some of the records straight. In response to Bob – Valuer on 26/6/2013 4:13:25PM Valex has not given a blanket directive that sales must have settled before they can be used in the report. Valex enforces the requirements of the ABFI Standing Instructions and the PropertyPRO Supporting Memorandum. A copy of both documents is available for downloading from the API website.

    If a Valuer has issues with the ABFI Standing Instructions and/or the PropertyPRO Supporting Memorandum, then I suggest that they contact the API and raise their concern in writing so that the industry body is aware of the Valuer’s concern regarding the interpretation and implementation of both documents.
  • Black Sheep | 25 Jul 2013, 09:22 PM Agree 0
    This appears to be a really heated topic and I must admit, stumbled on it a little late.

    Valuations will always differ and be questioned by either the broker or compliance.

    There are far too many junior valuers in the industry, that's because the fee paid by the lenders is far to low for the service expected to be provided, lets not mention "experience", but when you have companies competing against each other for the work (volumes), you get monkey's in the end for the discounted fees, zero experience and it shows in the end results.

    I have been valuing for 14 years, and have all the bells and whistles (post nominal's) to no effect, prior to this did 10 years in real estate, sales and management, and have seen this industry go to the dogs with no one wanting to value anymore, to put it mildly, you are a glorified contractor on a base salary plus commission, and if your lucky enough to reach a modest salary of $100k which includes your super, holidays, sick leave, car, mobile, home/office, that is after some 1,000 plus valuations, which take 2 hours per job to complete from wo to go, your considered lucky.

    I see juniors making this amount based on turn over, smashing them out, or what is known as churning and burning them in the industry, the only ones suffering in the end is the client, the broker and perhaps the lender, at the end of the day, in my opinion, the lender is at fault because of the low fees, forget the valuation firms dropping their pants for the business, at the end of the day they are making millions and, will KILL to keep the volumes coming in, working the staff to the bone until they can't take it anymore and leave the industry, it is not uncommon for Valuers to work 14 to 16 hour days.

    Let's not forget how many times Valuers don't get paid for no shows, or have to go back a 2nd time to inspect the property because the property is a pair of duplexes and no one told the Valuer the other property existed or was tenanted, or the estimated value differed and was worth far more than was estimated, going over the fee Vs value ratio and the bank would not honor the higher fee, e.g. EMV $900K, Value $1.2k

    For this industry to survive, Valex needs to go, banks need to lighten up on their Risk Matrix and compliance so that real Valuers may return to the industry and some common sense values may come back to all.

    I often ask myself in the numbers game, how much are the lenders really losing because of the disgruntled valuers on low fees, e.g. smashing the jobs ?

    It always goes back to the old real estate saying, pay peanuts, get monkeys.

    This old dog is on his way out, even though he still has a few years in him, but wait for it, RP Data which is owned by the American based company, Corelogic who also owns Valex is firming itself up for the take over of the valuation industry, that is, if it can convince the government to allow it to desk top valuations, not the ones it does now, I am talking up to 80% lend, that is as long as they come in within the 15% range, think I am crazy, watch this space ! ! !, the banks are already rubbing their hands, think of the reduction in fees, from $192 up to a million, down to $45 a job, let alone the turn around times as no appointment necessary as no inspection required.
  • GW | 26 Jul 2013, 10:08 AM Agree 0
    Awesome, a valuer putting thing into complete perspective. Well said "Blacksheep". Your are completely spot on. Valuations should be $400 dollars and the client (borrower) should pay for it.
  • Garry | 26 Jul 2013, 10:48 AM Agree 0
    Blacksheep, you should be applauded for having the guts to tell the truth.
    As far as the client paying for the valuation - I think the banks more than sufficient income from the client and the client shouldnt pay for the valuation. The bank should look at it as a cost of getting and/or keeping the business. However, it may alleviate the issues we are having. I think that as long as the banks and the govenment allow the smaller valuation companies to be swallowed up by multi national companies, nothing will change.
  • Allan Faint | 26 Jul 2013, 11:27 AM Agree 0
    What a shame more of these experienced valuers such as Black sheep, are not still in business.
  • SEQ BRoker | 26 Jul 2013, 12:43 PM Agree 0
    Gee Guys. Be Civil.
    Firstly let me say that the funds received by valuers is basically not worth the risk of completing the valuation let alone the time to put it together. Its a lose lose even when they do a good job.

    I had 30 undervaluations in 2011/12 all construction. Often oranges compared with - lets face it - rotten apples.

    I have talked to a number of really nice people who had the misfortune to end up as a valuer. I lost $60K of income last year but only half of that was due to error. My Gripe is that the valuers in South East QlD like to find the Cheapest transaction of similar securities rather than the mean value. Mean value seems fair when you have a lot of transactions which we do here. Pessimism is an error of judgement possibly caused by the fact that a 15 year old macdonalds worker gets paid more $ per hour than a valuer in some instances.

    The President of the API came out with some statements last year that benused me. Specifically "new construction should be treated as superior" and a list of reasons. yes every construction I organised lending for was a massive argument. I ended up providing my evidence with the original data.

    I understand the 3 month lag for data to reach RPdata, its the government titles office that causes that so anonymous should simply provide the comparitives up front. I do that for my clients because I want to get paid.

  • J -Valuer | 27 Jul 2013, 11:57 AM Agree 0
    To the mortgage brokers who are complaining about under valuing. Let me say firstly that this is a very litigious industry. The mortgage insurers look to sue if they lose money. So the way to ensure this is by being conservative. Business is about risk and return. Being conservative equals less risk. It's a very simple formula. Secondly, the issue in the industry is that, thanks to Valex, valuers do not have the time to complete the necessary research to do a job properly. Of course reports are rushed - valuers are doing far too many, and are not judged on quality but on speed of turnaround. The issue of "compliance" has no bearing on whether the figures are correct. As for the quality, what do you expect when banks issue volumes to the large firms who are understaffed. However, it is the smaller boutique firms which generally provide a superior service. They have the local knowledge in the areas in which they specialise. Solution: Go back to the way it was, where banks chose their panels with care, and provided the work to the valuation firms which have the local knowledge and provide a quality service, and reports were delivered once the valuer was satisfied that it was done property. If you want it rushed, and done cheaply, often by inexperienced valuers, from out of the area, then you get what you pay for. As very few people are now entering the profession, and there is a real shortage of good valuers, in my opinion, the current system is not sustainable.
  • Overworked and Underpaid | 28 Sep 2013, 06:10 PM Agree 0
    I'm a valuer - and I make no bones about my job, and that is to firstly - to protect the lender from fraud and potential insolvency from over zealous owners and brokers estimates and in many cases lack of full disclosure. The Lender is my client and not the broker - The brokers client is the borrower. Valex has allowed the valuer to retain better independence from undue influence from the broker however its not about quality but turn around times and compliance.

    I always treat every job from the point of view that I am not being told the full picture and in most cases (after 30 odd years) I can say that 80% of the time the lily is gilded.

    At the moment valuation fees are so low that its not worth the Banks effort to employ valuers on staff but as the valuation profession slowly dies from long hours for little reward (and lots of running expenses) you will most likely see a trend back to banks employing their own valuers again.

    Sorry but the Automated Valuation Model will never work - too many variables (including emotional factors) - the last sales sample they checked against their statistical model was only about 60% accurate.
  • Peter Sparkle | 05 Nov 2013, 05:58 PM Agree 0
    Yes, Black Sheep nailed it, but wait, there's more.

    A very large US multinational starting with say, C (you all know, the 8-point-something BILLION dollar a year real estate company) have lead the downward fee charge which has become the (low) standard in volume resi fees. Why? Simple. Because they make their big dollars in COMMERCIAL, always have. They can charge $175 for a property pro "full" val until the end of time, and the rest of the industry goes utterly broke. So they send out young valuers to churn like 8 to 10 vals in a day, make their 30 or 40K in comms at say, 23 years of age, and save for a Sydney home deposit by 2037.

    I have had two fascinating conversations with the ACCC over the past 5 months. After googling CBRE's "partnerships" and "acquisitions", I was told it looked a bit like cartel behavior, and certainly predatory pricing, both of which are illegal. So who cares? Apparently, no-one.

    I cannot stand putting a val out if I have a niggle about a sale, contract or an agent, and so, I may not ever see a commission. I probably have to re-train out of the industry, simple as that.

    Here endeth the lesson. Go in peace. Or just go.
  • SEQ BRoker | 10 Nov 2013, 05:26 PM Agree 0
    Hi peoples,
    I certainly don't like the argument that this has become.
    Why don't valuers simply change their wording from "Market Value" to "value that I am prepared to accept risk on".
    Regards comment "i've never met a valuer I like", come on mate! I've met a bunch and for the most part they all nice people.
    I agree that prior to undervaluing a security the valuer should contact the lender/broker.
    I make it part of my job to simply supply the comparables with the initial val documentation.
    Someone couldnt see the correlation between short pay for valuers and low valuations. Simple, why submit a valuation on contract if you suspect there is a chance of being sued for it when you are only getting paid a hundred bucks. Lenders are pushing the risk onto LMI or Valuers PI and LMI is pushing their risk onto Valuers PI as well. A valuer isn't a risk mitigation factor for anyone in my opinion but thats what i think is happening.
    Worse, Im suspect lenders (the big ones) are purposely organising this scenario in order to drive more people into LMI. I wonder if they make any money selling LMI and then I wonder if they sell a bunch of LMI protected loans at a higher rate than non LMI protected loans...hmm
  • GC Broker | 11 Nov 2013, 10:03 AM Agree 0
    I work closely with many builders and agents in many cases before they market the property they have it valued, not only by themselves but with a panel valuer. Not a problem, generally vals are coming within 5% which in today's market is acceptable. However whenever that 'C' company gets allocated a val, usually through Valex, ralely through choice, their differences are at times 20+%. Most valuers acting for lenders are 10%-15% difference. It is interesting to note that one major lender no longer uses that 'C' company in areas where there is new development - too many construction deals were falling over and then going to other lenders.
    A recent discussion with a regional manager for a that big 4 lender explained to me - "30-90 day fire sale - net of costs over 5 years" - that's your valuation for lending.
    Valuations now bear now relation whatsoever to the real value of properties - it's what the lender can receive with foresight if there is foreclosure sale -thanks in no small part to valuers being sued for not allowing 'future market conditions'.
    Whatever happened to seller and buyer agreeing on a price?
  • Black Sheep | 22 Nov 2013, 07:28 PM Agree 0
    Recently during this boom period I have noticed that a lot of Valuers (tools) I call them, have been pulling back contract prices, e.g. coming in less that what "the willing buyer & willing seller" with the right marketing and time frame have accepted, creating "market value" in line with Spencer Vs The Commonwealth, what set the precedent.

    I even met a Valuer on site (being one myself) to assist the Valuer with comparable sales in the area, as this was also my patch and a friend of mien purchased the property at auction, for what I advised him it would sell for e.g. between $610,000-$630,000, he paid $611,000, the reserve was $630,000. The Value desk topped it first for $530,000 (we know desk tops are a failure and a numbers game for the bank, and then did the internal with me supplying him with settled and current "Market Intelligence" which the lenders will accept, only to find out he pulled it back to $470,000. I cannot wait till the day, that a willing buyer, sues a Valuer, for pulling back the value of a purchase that causes the buyer to lose his/her 10% deposit and other expenses incurred. The Australian Property Institute should get off its rear end and round up these (tools) setting clear guidelines on how not to pull contract prices back, unless they are deemed suspicious, how can one say that one paid too much for a property, when these (tools) are not qualified, e.g. RPV's ?
  • MA | 03 Jul 2014, 05:08 PM Agree 0
    Valuer in Melbourne are events worse. We have alot cases from the valuer that under valued by 20-30% . For example there were two cases that the client got the house valued by a bank in 2008 for $4m (client provided the report from bank to prove). The valuation report came back two weeks ago from a valuation company called HTW. They valued same house for $3m with 9 months old sales data to back their report (recent sale in the area with same size of land and similar house sold for $5m) .

    Other example a house in the inner east in Melbourne , the bank valued in 2010 for 1m. 2 months ago a valuer from WBP valued the house for 700K which even less that the Council valuation. The land is rectangle and the valuer put in as irregular when title provided to them.

    Both client freak out and try to complaint to API. However API replied to them was they did not order the valuation therefore they wont accept the complaint.

    The client felt valuers can valued whatever the wanted which there no set of rule , law or a government agencies to monitor them.

    The property market is just waiting to burst because of these valuer in the market which did not do their job properly.

    If the valuer feel they dont reward being a valuer. They should simply quit rather than hurting the market.

  • MA | 04 Jul 2014, 11:49 AM Agree 0
    This is the information from ABFI however most of the valuers ignore this ABFI standards for residential Instruction. This standard make it clear on the definition of the market value

    The definition of Market Value

    as stipulated by the International

    Valuations Standards Council and

    endorsed by the Australian Property Institute and New Zealand Property Institute is:

    “The estimated amount for which an asset should exchange on the valuation date between a willing buyer and a willing seller in an arm’s length transaction, after proper marketing and where the parties had each acted knowledgeably, prudently and without compulsion”.

    (IVS Framework 2011 Adopted by the API 01/01/2012)

    and on they said

    The sales evidence utilised in the valuation report should ideally:

    • Include a minimum of three settled sales,
    • Be within six months of the date of valuation,
    • Be within 15% (plus or minus) of the assessed market value,
    • Be of a similar type, location, age, condition, size, etc.

    • For new home units, development.

    include a minimum of

    three settled sales external to the subject

    However most of the valuers which we are experiencing are provided the sales record which are 9 months - 1 years old and the properties they provided are not similar to the property they valued.

    There are a lot of valuers out there just want to take the cash without doing their job properly.

  • Valuer (24 year veteran) | 06 Jul 2014, 01:43 PM Agree 0
    I applaud Black Sheep for telling it like the way it is.

    I will also add that rather than Valuers undermining anyone. The industry is undermining itself.

    The Valex/RP Data/CBRE alliance is the root cause to the industry wide issue of low quality.

    Valex constantly crush Valuation firms on appointment times and turnaround time with no regard for quality. They virtually exort firms with the threat of reduced work volumes if firms cant meet deadlines - even if the Valuer is taking time to seek better/more appropriate sales evidence

    The Valex system is totally focused on "compliance" and not quality outcomes.

    It is near impossible for firms to recruit a Valuer with more than 10 years experience, as by the time a Valuer has had that long in the game, they are completely burnt out by the workload that requires them to product 6, 8 10 reports a day to obtain a moderate income

    Valuers are being screwed over by the industry despite being the group that single handedly carries all the majority of the risk

    Think about what happens when the client falls over and the bank is trying to recoup -

    Where is the agent that sold it?

    Where is the conveyancer?

    Where is the broker that put together the deal
    with embellished payslips etc to get the deal past the banks matrix?....they are all gone

    Who does the bank take aim at to get their money back? ...the poor Valuer

    Any broker that gets on this forum and stamps their foot like a petulant child because things aren't going their way - merely demonstrates a lack of understanding of what is happening in the big picture

    The ONLY way forward is for a restructure of the industry including an increase in the base fee for properties up to $500k to a $400 flat fee and a return to local firms operating as specialists in their local area.

    The current multinational approach has served to only convert valuation offices across the country into virtual sweat shops

    And of course the API continues to have its head in the sand - with no policy or statement release on the Number 1 issue for its members

  • marty | 07 Jul 2014, 10:36 AM Agree 0
    @ Valuer (24 year veteran)...The experienced brokers on here are not jumping up an down because things aren't going our way we are jumping up and down for the same reason you are because the quality of the valuation is generally poor. That's an issue out of our control but we are certainly within our right to whinge about it. And here's a hint just charge more

  • Valuer (24 year veteran) | 07 Jul 2014, 01:34 PM Agree 0
    That sounds so simple in theory and I can understand why you would say that. I am not trying to diminish you, but the fees are set by the lenders (akak the big 4) and therein lies the problem

    Lenders basically set the fee and tell the firms to take it or leave it. Its predatory pricing in its purest form
  • marty | 07 Jul 2014, 01:57 PM Agree 0
    @ Valuer...I / we realise the position you are in but raising your price is the only rational answer. That or leave the industry.
  • Alex | 08 Jul 2014, 08:28 AM Agree 0
    Last month, one of the major banks released a new policy which essentially states that a valuation is no longer required as long as the security is Genworth category 1 or 2 and a 70% LVR or less based on the contract price. It's a small step, but indicative of lenders' frustrations with valuers as much as that of brokers across the country. Hopefully there will be more positive changes to follow in the coming years.
  • Peter Sparkle | 09 Jul 2014, 05:30 PM Agree 0
    We cannot raise fees...the vast majority of us are employees. The val firms continue to cut each others throats and make wild promises as to turnaround and "compliance" (funny), and then make the VALUER pay for the fee shortfall via long hours. It's qquite simple. A decent val takes inspection time, travel, look at sales, analyse, type, submit....easy 100 minutes + for reasonable quality. If you want to see your family you have about 60 minutes per val, all up. There's the pinch, the time/quality curve is shot, and they all keep playing pretend and the API watch it happen. If there was a specific property valuers union you would snag thousands of members in a few short months.

    I do quality work. The price is constant family and employer friction.
  • MA | 10 Jul 2014, 10:38 AM Agree 0

    The average residential under $1m the valuer charge the bank roughly $500

    The properties over $1m valuer charge $1500-$2000

    Commercial valuation charged from $2000-5000

    So now my question to all the valuers out there how much does the valuation fee need to increase ?

    If fee increase , can the valuers ensure they would provide a quality valuation report which reflect the current market ?

  • marty | 10 Jul 2014, 11:03 AM Agree 0
    @ Peter Sparkle, I feel for you guys but change can only come from your industry demanding increases to your fees. It's a free market. Same as farmers need to decide if they want to get into bed with woollies and Coles. At least you have more than 2 players.
  • Black Sheep | 10 Jul 2014, 11:26 AM Agree 0
    $500 for a valuation under $1,000,000, more like $210 for the big 4, over a million has now been increased recently ranging from $415 anything coming through Valex to St George/Westpac finally increasing the fee which was $210 up to $2,000,000, to now $490 up over a million to 2 million. Now the fees are starting to get better, the hours the same, but the compensation better, however anything that is estimated at over a million, and comes in short, e.g. under a million, the fee is reduced, and lets not forget how many jobs come in at an estimate of 1 million and are worth more, ask for an increase and get rejected. It is an absolute bitch fight, and we are being ripped at every angle so the banks can make profits, they hide behind Valex, who cut your volumes if the turn around times are not met, I ask you all this question, how many valuers are out there who don't give a rats, and just crunch the numbers because they don't care, quality is out the window when you treat workers like slaves, to all the lenders, make your profits of our backs, but don't complain if you lose out on some deals here and there, and for those of you who worry if the fees get increased, will the quality be better, that I can't answer, but it would be a step in the right direction, don't forget, we all have compliance to pass.
  • MA | 10 Jul 2014, 12:40 PM Agree 0
    @black Sheep

    All professional out there are taking risk . Doesnt matter you are engineer or lawyer or doctor. It is the matter how much risk you are prepare to take. If the valuer feel they dont get any reward and taking big risk on the job. They can simply quit.

    We have the right to complaint and not because we lost a few deals. It is because the client paid for the services and get a ridiculous valuation report which the price did not reflect the current market or the data used to back up the valuation are not accurate.

    The valuer dont hear the complaint from client but we do.
  • Black Sheep | 11 Jul 2014, 08:47 PM Agree 0
    That's a fair comment, quit, that will solve all the problems you have been having in the last 2 years, because experienced valuers who have spent years developing the knowledge to value accurately, have left the industry in droves, I also left the industry for 2 years, but was constantly hounded by firms to come back, until someone decided to pay me what I was worth. Your attitude, along with the others/lenders, is exactly why you have an industry of RPV's e.g. restricted property valuers, graduates flooding the market, who have no idea of how to value a property, and the others who have achieved their CPV status to fill in the API/lenders criteria to be able to value properties over a million $'s, are just number crunching the jobs, e.g. $'s per job to pump out enough jobs to earn a modest living. I have no empathy for people who have no understanding of what it takes to value a property, yes you have a right to complain when things don't turn out the way you want them to go, this is simply, because you are only interested in your own gains, having no understanding of what it takes to value a property, I am talking from a qualified point of view of course, so you and the lenders can keep on complaining and losing on deals, you have brought this upon yourselves. The industry needs a change as mentioned by another post, however, until the lenders and valuers, not the API (toothless tiger) who is run by directors of companies who obtain work from the lenders (conflict of interest), sit down and iron out a fair system and simplify the valuation process by removing Valex, and stop adding and changing their policies to make things even worse, will only churn and burn valuers out as has been the case in the past, perhaps the API could provide the number of valuers who have left the industry over the past 2 years ?
  • Peter Sparkle | 12 Jul 2014, 10:16 AM Agree 0
    I do not know where that fee for under 1 mil came from. Bankwest still pay like $190 + GST, there are still many lenders paying $200-$230 for up to 1 mil. This happens to be the vast majority of my work. So, reports are invariably often late due to precious 15 minutes of real analysis. CBA were paying $200 12 years ago!!! In what industry has this happened?

    As for simply quitting, well, I dream about it. But with a family and mortgage, not possible right now. How does one re-train to adv. diploma or better while working these hours? Seems to me there are more valuers than either val firms or banks. So how did valuers get turned, en masse, into blithering cowards? I can't help but wonder what would happen is many of us simplt refused low fee work out of professional self respect? The mortgage insurer wants a full val. Who's gonna do it? Is the bank going to send out the teller??

    Looks ripe for a revolution I'd say. Or maybe a 60 minutes report asking how quality can be sanely
    expected for $200. Spend $45 for a plumber call-out and see what you get. A pile of ****.
  • MA | 14 Jul 2014, 10:12 AM Agree 0
    @ black sheep

    I agreed that it is hard to find an experience valuer. An a lot of my client told me that everytime the valuer come in with a computer , the property value are much lower than the valuer only used note pad and laser measurement.

    As mentioned before we are complaint it is not because we lose a few deals . It is because we keep getting complaint from the client all the time which the valuers do not hear about it.

    A good example here, I just recieved a valuation report 1 weeks ago from HTW. The client provided a building contract in 2009 for $2.2m included GST 900m2 house with basement and architecture drawings in scale to the valuer .

    The report came back the landed valued for a $1m (when market price is $1.2-1.4m) and the construction cost for $1.5m only.
    However valued the replacement cost for $4m.

    The worse thing was the total area shown in the report missing 150m2 basement area.

    If you are in our position and every day receive a report like this. I am sure you would complaint about it.

    And get this straight, we are just a broker and we dont get to say how much to pay the valuer to value the property.

    We are not only interested in ours own gains, however we are also interested to see this improve for everyone here. Imagine no borrower in Australia, all of us just losing our job and business. By that time we dont even need to complaint.

    We are just waiting in front of the centerlink to get pay from the government.

    All of us in here is asking the valuer and API to do something about it to improve this situation.

  • Peter Sparkle | 14 Jul 2014, 11:10 AM Agree 0
    Go to the CBRE site:

    Now, look and see who the FIRST client is. CoreLogic. Brokers AND valuers need to contact the ACCC, Fair Trading, whatever, and agitate for an investigation of the industry. Corelogic owns RPData/Valex/VMS Sandstone. This is crazy. How is CBRE getting away with having a client who owns virtually all the hubs??
    How can that not be an unfair advantage? How can the API say nothing without being complicit?

    Aagh. Depressing.
  • Black Sheep | 14 Jul 2014, 11:15 AM Agree 0
    Peter Sparkle, you hit the nail on the head, and MA, the whole problem here is the API is in bed with the banks, where else do you have company directors of valuation firms running the API. After all, it is in the API's interest IMO to keep the fees down so that those directors like the president can pay their valuers less. Like I said before, it is a step in the right direction that some banks have lifted their fees over a million dollar, the problem is the fee should be a flat fee of say $450 per job, commensurate with how long it takes to complete a job from A to Z, lets face it, were else do you study for 4 to 6 years, then value properties for 5 years to get CPV status to perhaps be able to command 45%, 50% if you have been around as long as me, to end up with $100,000 to $120,000 a year, working 12 to 14 hour days, running your vehicle etc etc. I prefer it when we used pen and paper, I was done and dusted by 1.00pm, nowadays its 8.00pm, technology hasn't made things simpler, its created more work to complete what should be a simple job. The majority of valuers out their, have "no idea", they are fresh out of school, with little or no schooling in the industry because no one has the time to learn, II have been valuing for ages, had 1 days learning, e.g. this is how you measure, this is how the camera works, day 2, oh by the way, here is a villa development that needs to be done on an On Completion basis, you have a week, I almost quite, come to think of it, I should have, it would have saved me years of agony doing this miserable low paid fricken job, if you can call it that, with banks, brokers and the like wiping the floor with us day in day out, did you say $200 a job 12 years ago, yeh, that sounds right, oh and MA you said if we don't like it we should quite, know this, I am on my way out, and am one of the last good valuers who can value a property, I know this because each time I value a property before auction, I follow up and pat myself on the back each time, you on the other hand my friend, and the lenders will be left with what you deserve, like I said, treat workers like slaves, pay them like desk clerks and you end up with monkeys running around. Me personally, I would like to think that some valuers are specialists, a bit like brain surgeons, after all it takes years and years of valuing to get to a level that you are looking for, but the majority of valuers out their are graduates, or recent CPV's because they have degrees, e.g. (2 years) instead of 5, WRONG, big time IMO, but who cares right, me, I don't think so, I am on the way

    Better muster up some support from you brokers and hit the API between the eyes, they need to have workshops for valuers, on how not to can a sale, how not to think you are the oh might and with a strike of a pen, can a sale, instead look at current market analysis, simple maths really. Good luck !!!
  • Black Sheep | 14 Jul 2014, 03:16 PM Agree 0
    Shazzam, now that's what I'm talking about, and as usual, nothing will happen, just ask Mr what's his name Hecek or something like that, President of the API, doesn't he own ValueCorp or something like that ? API the private boys club. Go to
  • MA | 14 Jul 2014, 04:12 PM Agree 0
    None of the authorities willing to take on the case as suggested by Peter . API just wont accept complaint who do not order the valuation. So now everyone in the industry hitting to a brick wall.

  • Black Sheep | 28 Jul 2014, 01:14 PM Agree 0
    Alas, a real Valuer has spoken, too bad for the rest of the Emu's with their heads in the sand, yes Corelogic/Valex/RP Data all one, have taken the information for mass future generated reports, but wait, when the data back fires, as it does everyday with their one line $39.95 reports, who will the banks be suing then ? The real hardcore Valuers like myself who hangs on by a mere threat, who have left, will not return and it will take a decade for Valuers to get the real experience to be a real Valuer, at the end of the day, I hope it bites into the banks profits, as they deserve what they themselves destroyed.
  • Gayle Copeland | 14 Oct 2016, 10:55 AM Agree 0
    I recently re financed 4 properties in suburbs Randwick, Coogee, and Woolloomooloo all came in at $60-$90,000 less than market value.
    When questioned Lender came back with the Valuer was instructed to value as Code 4!
    End result of course was that my client has less equity to use for future investment.
    As a percentage I would say that less than 60% of loans written by my office meet purchase price or market value.
    Comparables are too old in most cases to be relevant.
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