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Emotional brokers and pride-driven valuers: Why they can't seem to get along

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Australian Broker | 04 Jul 2013, 08:00 AM Agree 0
Brokers take on their clients' emotions and valuers are fueled by pride, according to two industry spokespeople
  • Papery | 04 Jul 2013, 08:36 AM Agree 0
    Nothing to do with commonsense
  • Melbourne MM | 04 Jul 2013, 09:20 AM Agree 0
    Just because valuers are profesionals doesn't mean they don't take short cuts, get things wrong occasionaly, make suppositions based upon their judgment of the owners character / motives.......etc. 2 valuations done recently for a purchase. Price $640k. Valuer 1 - $500k. Valuer 2 - $640k. Within a week of each other. Are they both right?
  • WP | 04 Jul 2013, 09:33 AM Agree 0
    I have had some low valuations, and after a conversation and using my own data, I agree with them. Sometimes before even ordering the Val I suspect the clients estimate is wrong.
    I also have some absolute shockers.
    For me, this has mostly occurred on difficult property’s to value.
    A beach from property in the south coast, different by $400K, about 30% to what I believe to be correct, the local agents told me, and to what the property had been purchased for at Auction 1 year before.
    I had 4.5 Hectres in a western suburb valued, Valex allotted the job to a North Sydney Valuer.
    The two houses were old, and in terms of value, fairly insignificant, and the area was effectively all large lots (1 to 4 hectres)
    Client estimate, 2 Mil.
    My estimate from own research taking two years worth of sales, and averaging price per hectare. 1.85Mill
    Valuer $900K
    The value wasn’t even consistent with the comparable sales in the valuation.
    The valuer spent a lot of time measuring the house and the rooms and looking at the quality of the fit out, but clearly didn’t look at the land itself. He was a city valuer was valuing 4 hectres like he would value a unit in North Sydney.
    There were two properties in the valuation, both with lower quality houses on lots less than half the size, in a flood prone less desirable area. (According to the val). They sold for 700K each.
    So a lot, that is larger than the two lots combined, with two houses both of which are both are better, and in a better location is only worth 200K more?
    Sent another valuer myself, who was from the west, and they valued it at 1.8Mill. She didn’t even bother looking at the houses closely, effectively she valued the land plus a tiny bit for the house.
    Bank would not re value for application, so client put the property on the market to cash up. It sold within a few weeks for 1.77Mil. Almost double the valuer. His was out by almost 100% (or 50% depending on which way you look at it)
    There is a reason Valuers are getting a bad wrap, and where there is clearly a problem, Banks need to consider getting a new valuation.
  • Paul RH | 04 Jul 2013, 09:58 AM Agree 0
    We've all got stories about properties that were had to value, or valuation that were way out of the ball park. Personally I'm sick of being told about the "professional" valuers who's opinion is supposedly worth something.

    By the time Valex and the valuation firm take out their cut the person who actually completes the valuation is lucky to get fifty bucks out of the job. At the end of the day they are just trying to churn through as many as they can to make a living. They are relatively lowly paid and just working through a process. Please don't try and impress me by telling me they are university educated professionals.

    Too often we have to hand hold them through the process of just making an appointment. Getting on the phone and working out a time with the agent or client seems to tax the ability of most of them. So I very little credibility to what they churn out at the end of the process.

    And the reason I have time to write this is because I have three deals to get through today and all of them are waiting on incompetent valuers who can't ring agents, can't return calls.
  • Garry | 04 Jul 2013, 10:57 AM Agree 0
    Brokers are NOT emotional and valuers are clearly NOT pride driven. Valuers are cost and money driven. They appear to be more driven to protect their insurance premiums and getting as many vals done in 1 day than doing the job properly.
    These arguments were not always around. In the days where we could work together and discuss deals and valuations between valuers and brokers, things were much better. We could discuss the issues and educate each other andchoose the valuers who knew their job and were prepared to work as a team. The banks are just as much to blame as the valuers in this debacle. Its completely cost driven now - quality of service has gone out the window and unfortunately I doubt it will ever return.
  • PeterT | 04 Jul 2013, 11:24 AM Agree 0
    We've learnt to simply not bother arguing low valuations, best just to move onto another lender and get another valuation. To that end it makes me question why two professional valuers can have a 20%-30% difference in opinion on the same property even when they've got a contract of sale in front of them!
    I'm also inclined to agree with the 'prideful' observation. We had a tricky property about 12 months ago. The valuation request was accompanied by a COS and 6 comparible sales including supportind comments; we litterally did the valuers job for them.
    Happily the valuation result was as needed, but the valuer refused to use any of the comparibles provided, instead finding their own!
  • Jeff | 04 Jul 2013, 12:27 PM Agree 0
    One thing that gets missed in all of this is the assumption that Brokers have no idea about valuations.
    Many don't realize that as an ex-bank manager many of us did our own valuations (over 10 years).
    No uni degree, but didn't have one instance of a housing being sold short; nor did I undervalue to protect a 'PI position', like is the current practise. eg house valuaed at $850k by land agent. $750k by Bank 1 (assuming it was a Branch deal).
    $650k by Bank 2 (broker deal); appealed and got a new valuation at $560k.
  • Dean | 04 Jul 2013, 05:26 PM Agree 0
    The residential valuation industry has been effectively "dumbed down" by Valex and the banks to a level it will never recover from. What else would you expect when this supposedly professional service is given away for free. Pay peanuts, get monkeys and right at the moment that's disrespectful to monkeys.
  • Brado | 05 Jul 2013, 10:10 AM Agree 0
    I have a client that works in for our Govt overseas ( foreign affairs)...buying an investment property. Valuer has marked down the value by exactly the real estate commission for 'fears of 2 tier marketing to OS buyers'... dead set... can the guy be serious? That is SO professional.... so the property IS worth what its being bought for, but either the valuer doesn't want the client buying the property... OR the bank doesn't want to help someone buy an investment property.... its all dodgy in my eyes
  • Coast Broker | 05 Jul 2013, 02:47 PM Agree 0
    Only recently I had an issue where a client of mine was looking at purchasing a pair of Duplex’s. The Lender involved sent off the Valuation Requests to Valex and 2 different Valuer’s were instructed to complete each valuation. Go figure.
  • Just a battler | 08 Jul 2013, 12:11 PM Agree 0
    The lender ordered a valuation on 2 town houses. One was 9.65sq's the other 11.85sq's, both e were off the plan (purchased 15 mths ago), they were valued by two different firms???

    The 9.65sq'a was valued at $400,000, happy with that. The 11.85 sq'a was valued at the purchase price $370,000, by the other firm? Now can anyone please tell me how this came about?
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