Yesterday’s article, ‘Are property valuers undermining brokers?’, elicited a massive response from readers on both sides of the argument. Comments flew in, ranging from empathetic to downright abusive - but one thing everyone appears to agree on is that there are definitely some issues to work through.
Dozens of readers offered up examples of valuers under-valuing properties by tens – and, in several cases, hundreds - of thousands of dollars, but not everyone is convinced the valuers themselves are to blame.
‘Steve McClure’ says he supports valuers and believes their unenviable task is nothing short of 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…They get no credit when they get it spot on.”
He is, however, critical of ‘undue reliance’ on RPData - and lenders themselves.
“By pushing down fees paid to valuers, lenders are relegating valuations to tick and 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.”
But not everyone is so sympathetic. ‘Gary’ says the issue isn’t limited to Perth, either.
“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.”
He says off the plan properties are a particular issue when it comes to valuations.
“When it comes down to finding comparable properties, opinion seems to win out over actual valuation…When doing LVR calculations I have, for the past two 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…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 don’t get paid enough…It’s about time this whole system was changed.”
After watching the discussion take a downward turn, with insults flung in both directions, ‘Aussie Franchisee’ ended the debate on a high note.
“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 and 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 brokers’ valuations 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!”