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James Mitchell
Transparency and accuracy in the valuation industry are vital to the success of the broking profession, one industry figure has claimed.
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As intense competition between Australia's lenders encourage more borrowers to refinance, the issues surrounding property valuations have become a topic of discussion in recent weeks.
Speaking to The Adviser, RP Data chief executive Graham Mirabito said the biggest challenge facing the valuation industry was a perceived lack of transparency of the valuation process by the lenders, which can directly affect broker confidence.
“Because people have lost a lot of money in mortgage lending, the biggest challenge you’ve got at the moment is being transparent about the valuation processes and methodologies,” Mr Mirabito said.
“People are coming after the valuers saying ‘You’ve got to compensate me because you didn’t give an accurate valuation’ and in most instances that is not the case, they did the best available at that point in time,” he said.
“I think transparency gives confidence, the confidence that the broker can make the right assessments up front.”
Property valuations are an integral part of the loan approval process and can have a significant impact on a broker’s ability to write business, Advanced Finance Solutions director Anita Marshall said.
“A valuation which is low on a purchase can mean that the loan often cannot proceed or a valuation appeal needs to take place which can delay the loan process,” Ms Marshall said.
“The client can miss out on the property in the meantime,” she said.
“In the case of a re-finance it can mean that the client cannot proceed with their refinance or they need to adjust the loan amount.”
