A central registry of valuers should be created to stop borrowers having to pay for multiple valuations, a top broker has argued.
Graham Reibelt of Oasis Mortgage Group, a four-time finalist and two-time winner in the AMA Non-conforming Broker of the Year category, has told Australian BrokerNews that there is a growing problem of valuations being rejected for deals when there is a change of lender during the approval process. Reibelt pointed to experiences in which a deal was shifted from one lender to another, and a previous valuation was rejected by the new lender, racking up significant costs for borrowers.
“Time and time again we see clients paying for additional valuations sometimes only a week after another valuation has been conducted via another lender. In some cases that's only a few hundred dollars, but in others it can be several thousand dollars if it is a substantial property," he said.
Reibelt has called for lenders to agree on a panel of approved valuers, making valuations transferrable between lenders.
“There needs to be a central register of approved panel valuers that lenders can call upon for valuations, and where a value produced for one lender could be used by others, with some minor update in the instructions to the valuer if needed,” he said.
Reibelt claimed that lenders were often “paranoid” about brokers influencing valuers. He said a deal shifted from one lender to another could find a valuation rejected, even if it was performed by a valuer already on the lender’s panel.
“There are lenders who are fearful of the influence a broker may have over a valuer and because of this will never use a valuer who has previously valued a property, even if that valuer is on their panel. There are also lenders who will insist on a valuation being done, and then conduct their own enquiries with estate agents in the local area and err to their opinion instead of the valuers,” Reibelt said.
The expense of this can become significant for borrowers, with Reibelt pointing to a situation where in a borrower had to pay for three separate valuations, each costing more than $1,000. He urged reform of the valuation industry, and said its current structure led to “muddy and potentially expensive” scenarios.
“If the industry is going to mature, we need to sort out how valuations are done and eliminate the need for multiple valuations just because there is a change of lender,” he said.
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