Love them or hate them, valuers play a significant part in determining a purchaser's experience with an off-the-plan property — so what can you do to avoid a poor valuation?
I would like to start by saying this is my personal opinion, but also based on factual information and experiences over my career.
Valuers don’t get the necessary attention when conducting a valuation and determining a client's contribution, as lenders generally take the lessor of the contract of sale or valuation.
The fault, in most cases, lies with the developer or sales agent who hasn’t assisted the valuer conducting the valuation. Valuers have heavy workloads these days so the more information you can provide a valuer, the better.
We recently had the exact same property, purchased for $554,000 two years ago, valued with one valuer at $501,000 and then we arranged another valuation and it came in at purchase price — $554,000.
The question had to be asked: How come there was such a difference between the two valuation reports? The answer is a common one: There wasn’t enough comparable sales to support the valuation in the first instance, but the second valuer obtained enough comparable sales to support the purchase price.
Also we investigated a bit more and found out the first valuer inspected the property without the property being completed and had an inclusion list which didn’t outline the finishes and information needed to ensure a more suitable valuation.
Based on these experiences, I'd like to share with developers and sales agents what they can do to avoid a poor valuation:
1. Ensure the property is complete
Don’t arrange bank valuations until the properties are complete with kitchens, internal fittings and most of the building completed.
2. Provide valuers with a valuation pack
In this pack it's important to include comparable sales, list of detailed inclusions, overview of the building and facilities, background on the developer and work they have done recently (showcasing their work).
3. Have someone walk the valuer through the property
To highlight the important aspects of the building and apartment, answer any questions the valuer has and offer to provide any feedback if the valuer is having any issues with the valuation report.
4. Give the valuer a great experience
While this one may not mean the valuation will be favourable or meet the contract of sale price, it will go a long way to assisting the valuer doing their job and ultimately help the most important person in the process — the purchaser.
Anthony Albakov
Anthony is the CEO of My Mortgage Freedom and a multiple award winning broker and finance expert. His expertise also helps many companies in Australia diversify their businesses by providing finance to their customers with a unique offering to increase retention and attract new customers.
