Login
ISCOVER
Vivienne Kelly
Conservative and inconsistent valuations are wreaking havoc with brokers’ bottom lines, according to a Sydney-based buyers agency.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Steve Waters, a director at Right Property Group, told The Adviser that time pressures, the inexperience of some valuers and increasing professional indemnity insurance were combining to cause the inconsistencies.
“Valuers are given a very small period of time and they’re pumping valuations out,” he said. “I think that valuers are also terrified of making a mistake, so they’d rather be conservative.”
Mr Waters said the current situation is negatively impacting brokers' bottom lines.
“The only real measure of the value of a property is what someone is willing to pay for it on the day,” he said. “The inconsistencies are making it hard for mortgage brokers. It affects their income and it gives people no confidence in the market.”
Mr Waters said some valuers are working in areas they are unfamiliar with, which is decreasing their accuracy.
“If a valuer isn’t an expert in the area, they’re going to rely on data. Data can be manipulated or interpreted any way you want, so I don’t think there’s any real art to it.”
Troy Phillips, director of MAS Funder, however, said the Australian market was operating in a unique set of circumstances, and valuers were doing a good job given the conditions.
“I think valuers are probably taking a more conservative approach in certain areas, but they cop a bad rap,” he said. “They do a good job most of the time.”
Mr Phillips said that areas with oversupply or varied property prices were the most likely to be affected by inconsistent valuations.
“There’s a case to say that sometimes they are too conservative, but I can understand why they are because the comparables they have are sometimes poles apart.”
Mr Phillips said the unethical practices that were prevalent in the industry in the late 1990s and early 2000s had largely been stamped out and that valuations weren’t negatively affecting his business.
“Valuers are doing a pretty good job given what the market has been like the last three or four years,” he said.
“The people that will give them a bad rap are property developers and construction and property marketing companies.”
