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​Low valuation fees strain broker-valuer relationships

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Australian Broker | 18 Dec 2013, 07:00 AM Agree 0
Valuers working to tight timeframes for low fees are a barrier to brokers and valuers openly discussing valuation issues, says API NSW president Tyrone Hodge.
  • Gary | 18 Dec 2013, 09:03 AM Agree 0
    I agree with the valuers. They are not paid enough.arrange an appointment, jump in my car, drive to the address,meet with the people , then value the property with all the necessary investigations, produce a report and pay all the ongoing costs incl PI Insurance etc, and then later deal with a broker for a $150
  • John | 18 Dec 2013, 09:07 AM Agree 0
    To me it sounds like the tail waging the dog? If valuers were so tight for time, then don't take the job? Valuers, unfortunately don't like to be asked questions, no customer service? We are in a service industry, you may not think so but we are.
  • Regional Broker | 18 Dec 2013, 09:21 AM Agree 0
    I agree Valuers are underpaid for the job they do, they have seen a situation where they are receiving less for a pro-forma valuation on a house now than they did 10 years ago, I do not know how they can do the job for the fee they receive. surely this is not the brokers fault , it is between the Lenders and the Valuers. If The API are concerned about fees and they have a forum with the lenders , they need to look at advising they have to have an increase in a standard home valuation fee or they cannot do the professional job they are being asked for. This is basically the bank looking to be as profitable as possible and just like the cut in commissions to brokers , they have cut the fees paid to Valuers
    The API president needs to also realise the brokers are just as frustrated as the valuers by the current situation.
  • Wes | 18 Dec 2013, 09:27 AM Agree 0
    They could save money by turning the lights off before they get into bed at night.
  • Positive Broker | 18 Dec 2013, 09:37 AM Agree 0
    I agree valuers are not paid enough but suggesting brokers would put pressure on just because they want the deal to happen is not fair. Any broker who is worth his salt should fight for a deal if they believe in it. We do understand property values and should be allowed to have adult discussion with valuers and lenders for that matter. On the flip side if the valuer is right accept the decision and move on. Perhaps then valuers will be happy to to talk to us.
  • mac | 18 Dec 2013, 12:00 PM Agree 0
    That's not a good enough excuse. They have an obligation to present correct reports and be accountable for their errors. Whether they need to charge more has no nothing to do with the minimum standards they should be upholding (but clearly they are stretched and this has impacted their minimum standards)! Their responses to queries always come back filled with venom too. Plain unprofessional. It is obvious to me that they need to set a minimum charge but don't have the balls to do it.
  • Stirrer | 18 Dec 2013, 12:16 PM Agree 0
    Seems to be a recurring theme.... Valuers are not being paid enough....neither are Brokers.....
    Fees & Comms paid by the Banks aggressively cut whilst expectations of performance from the banks is commanded.

    Seems to me Valuers & Brokers are merely order takers & slaves to the Banks...perhaps there should be a call for BROTHERS TO UNITE AGAINST THE OPPRESSOR!!
  • Valuer | 18 Dec 2013, 12:57 PM Agree 0
    I agree with most of the comments here. We are not paid nearly enough for the job we do, especially given the time pressure we receive from banks, reporting standards we are required to uphold, and commercial risk we accept on every single valuation.

    Sadly there used to be a charter of professional fees for the valuation industry, but the ACCC (no doubt driven by greedy banks) had this torn up as it was 'anti-competitive'.

    John you are way off base. First issue is that we are contracted to do the banks work. There is no real option to reject (resi) work. And what most brokers don't seem to understand is that we are professionals - we report 'x' value of a property for an extremely good reason. We have done a degree, are highly educated, and work daily in the field. What we say is the truth, backed up by fact. We don't need brokers calling us and contesting valuations. It is what it is - there should be no negotiation. You are driven by the desire to get a deal to go through (and get paid) - how can you possibly be impartial in your analysis? Valuers on the other hand are all business - we rely on steadfast facts that PROVE the value - not heresay, dodgy internet data, dodgy owner information or any variety of pressure to make a deal happen. It is a lot like if a valuer rocked up to your office when you were setting up a deal with the customer and we told you how to do your job. Would not go down well methinks.

    There are a significant amount of issues here. At the root of course is the fact that banks are making record profits every single year, yet pay both brokers and valuers less than ever. Every other professional industry has seen wages increase up to 100% over the past decade, whereas as pointed out above, most valuers earn less per valuation than a decade ago But over the same time the expectation of quality and volume of content in reports (and associated functions of performing a valuation) has risen dramatically.

    Many valuers have left or are in the process of leaving the profession for this reason.
  • Rosemary Johnston (PIAA) | 19 Dec 2013, 08:15 AM Agree 0
    It appears that the banks are using valuations to manage their risk exposure to a postcode, development or client. Mortgage brokers know that sometimes the bank's frame of reference instructions to the valuer are not right. Arguing with the valuer is rarely useful as they also have PI insurance constraints. What we need is transparency on the terms of reference that the banks provide. This could be given to both valuers and mortgage brokers. Mortgage brokers could now argue with the bank and have the reference terms and hence valuations modified.
  • Valuer2 | 19 Dec 2013, 09:40 AM Agree 0
    Banks and Brokers are probably getting the service level a $150 fee deserves in the resi area of vals. Increase the fee and that probably allows a better after valuation service?
    With the Broker getting around $3-5K per resi deal, of course he wants it to proceed.
  • Positive Broker | 19 Dec 2013, 10:05 AM Agree 0
    Hey, valuer2, I was quite sympathetic to your plight but I am noticing an undertone that brokers are unduly motivated by commission. Yes, we do get commission. Yes, we do want deals to go through but please don't question our professionalism. Just as you would not issue a dodgy valuation most brokers would not push a dodgy deal. p.s. $3 to $5k sounds like a lot of money but don't forget we don't get 5 or 6 jobs a day. I have actually written loans for valuers and I can guarantee they make a lot more than many mortgage brokers.
  • SteveL | 19 Dec 2013, 10:32 AM Agree 0
    Golden rule - The Banks have the Gold....and they make the rules. Until this changes we all have to suffer in our jocks! Merry Festivus
  • Valuer | 19 Dec 2013, 01:20 PM Agree 0
    Positive Broker - I should hope that valuers earn significantly more than brokers. We have done Uni degrees, pay significant fees for API Membership/ongoing CPD training, and pay outrageous PI Insurance premiums. Also consider that while you were working the first 3 of your career earning $50k a year, we were at Uni not earning a cent. We then face a $30k HECS debt at the end too.

    Valuers also work on average 10-12 hours a day to earn what we earn. When you break it down to a per hour basis we earn a lot less than most.
  • John | 19 Dec 2013, 02:19 PM Agree 0
    To Mr valuer. You forget one thing, it is not just you who was at uni. I did commerce at Melbourne Uni, then worked in banking before I started my business 14 years ago, so don't bring that little chestnut up. You will find most brokers have a Uni degree, they too go to PD days, on top of that, they are required to complete their diploma, plus pay insurance. Something that my take you 45 min, takes the broker over 3 hours, plus all the follow up, chasing valuer's who don't send their report back in the required time frame. Maybe if you walked in our shoes, you would get a better understanding, you are paid no matter what, if we don't receive an approval, all our time is for NIL. So Mr valuer the world does not revolve around you
  • John Sparkes | 21 Dec 2013, 11:48 AM Agree 0
    The issue is TIME IS MONEY. Less one one equals less of another. Ask any car, hardware or software manufacturer. The fees are NOT professional, they have become an insult. No self respecting tradesman would get out of bed for what I receive (pro-rata) per val. On average as an employee, what, $50 if I get out 4 in a day - talk to council, fully analyze a few sales, READ the freaking tender to spot
    deficiencies etc etc. So if I am still up at 8PM after going on the road at 745AM and working on this 1.35 million dollar job, they'll gimme $50. It's called corporate welfare.
  • Peter Blakers | 21 Dec 2013, 01:38 PM Agree 0
    In spite of what the API say in it's glossy mag (everything's fine here, look here's a man in a tie and a pretty graph, oooh) the situation in the trenches is becoming more than concerning. There ARE companies who are virtually head-hunting, valuers are job-hopping hoping to get an extra $100/week or a few less hours so they can see their kids. The "new breed" IMHO just won't investigate diddly squat, if it does not pop-up on a drop-down list on the tablet or Samsung Galaxy it does not go in to the val. Consequently, there are literally thousands of vals floating about in the banking system which are professionally negligent. Wrong zoning? Who cares, because in reality, who looks? Only when a deal goes belly-up and the bank has a shortfall is the val really put through it's paces by a lawyer.
    People are not robots, funny that. They WILL cut corners if they are getting pressured, stressed and burned, that's basic psychology.
    The bank's attitude toward this profession has become psychopathic.
  • BONED | 30 Dec 2013, 06:57 PM Agree 0
    VALUER: What we say is the truth, backed up by fact. We don't need brokers calling us and contesting valuations. It is what it is - there should be no negotiation. Valuers on the other hand are all business - we rely on steadfast facts that PROVE the value - not heresay, dodgy internet data, dodgy owner information or any variety of pressure to make a deal happen.

    ME: That's funny! Explain this then... 2 Blocks of Land in the same development, across the road from each other actually... similar size, within a few hundred $$ of each other in Contract price... 2 Valuers, same Firm, same Office - one at Contract Price, the other at $50k LESS!! That's NOT dodgy?! Me thinks that emphasises why we all know the Val process is a 'joke'. Totally debunks your theory above doesn't it!

    VALUER: At the root of course is the fact that banks are making record profits every single year, yet pay both brokers and valuers less than ever. Every other professional industry has seen wages increase up to 100% over the past decade, whereas as pointed out above, most valuers earn less per valuation than a decade ago But over the same time the expectation of quality and volume of content in reports (and associated functions of performing a valuation) has risen dramatically.

    ME: We must also be one of the only professions where our hourly rate has dropped since the GFC! We get paid circa 35% less in Comm's and need to do twice as much work to get a loan approved with all the regulation now in place (much of which is nothing more than counter-productive waste)! It would also be prudent to understand 'Bank Profits' before commenting on such! Bank profits are made up of a number of key revenue streams, one of which is Home Loans. Home Loans is the one that most Banks have been under pressure with since GFC and at one point, one very MAJOR Bank was breaking even to loss on its home loan portfolio. To expect them to increase comm's from sourced from other revenue streams is like robbing Peter to pay Paul. Simpler/more economical to shut it down wouldn't you think...
  • Positive Broker | 06 Jan 2014, 10:17 AM Agree 0
    Seems to me that valuers and broker are both being screwed by the banks. Should we be on the same side instead of crticising each other? A little respect either way may just ease this tension.
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