In the broker/valuer relationship tensions can run high, so what are the sticking points? In this week's Broker TV we speak to Matthew Zappia from The Selector Group and David Brell of Smartmove for their insights.
Video transcript below:
Anna Temple, Australian Broker Online
Anna Temple: In the broker valuer relationship, tensions can run high, but what are the sticking points? Matthews Zappia from The Selector Group believes the challenge for valuers lies in finding comparable properties to support sales evidence, especially in new builds. Whereas David Brell of Smartmove says brokers carry the emotional burden of the transaction which can cause friction.
Matthews Zappia, Buyer’s Agent, Property Analyst, The Selector Group
Matthews Zappia: I think for valuers their job is quite hard to find comparable properties, especially like put forward brand new developments, so sticking to their strict criteria is very very hard for them to find comparable properties to support the sales evidence, from that borrower paying too much for a property. So generally a borrower will get emotionally attached to a certain development and not run their numbers and pay a little bit too much, so it’s hard for the valuer to stack up their comparable sales to that sales evidence of what that borrower is actually paying, which in turn makes it hard for a broker to process a loan, because generally their shortfall is too great for them to cover.
David Brell, Smartmove
David Brell: Mortgage brokers take on the emotion from the client, so we deal with the relationship which is the hardest piece behind running a mortgage or looking after the mortgage, so we take on those demands. It’s something that we have to manage and manage well. So a lot of the negativity could be surrounding on the back of those emotions.
Anna Temple: Zappia also believes mounting pressure from banks on valuers for consistency as well as their proud nature could be a factor.
Matthews Zappia: I think it’s sticking to what the bank wants to see and their general criteria. I think as well valuers are pride driven people, so if they are using comparables from say a Buyer’s Agent like myself or a Sales Agent on the road, he is giving them some data to go off, I think they find it a little bit hard to take on that information. They are very pride driven people, so finding their own comparables and their own attributes towards that valuation is very important for them. And obviously the banks they want to see a valuer that is very consistent in the market, otherwise they won’t use those valuers again, they won’t be part of their valid system.
Anna Temple: For Brell there are undoubtedly inconsistencies, but at the end of the day in the name of professionalism ensuring a smooth harmonious experience for the customer is the top priority.
David Brell: Right, there are inconsistent responses, you do get sometimes one or two valuers valuing a property lower. However, it’s just something again you have to address with a client. There is no point having a battle with the valuer. At the end of the day, valuers are professionals, they have gone to University, they have a huge task at hand. You know there is a lot more that goes behind a valuation than just a figure and it’s a matter of weighing up to the emotions of the broker versus the professionalism of the valuer. So I don’t believe there should be any negative feelings towards the valuer. It’s just a matter of working with them as professionals, just get it right up front, talk to the clients, prepare them for the potential event of a lower than expected valuation and so just move on to the next deal.
Anna Temple: This is Anna Temple reporting for Australian Broker Online.