I would like to start by saying this is my personal opinion, but also based on factual information and experiences over my career.
Love them or hate them, valuers play a significant part in determining a purchasers experience with an off the plan property.
Valuers don’t get the necessary attention when conducting a valuation and determining a clients 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 2 years ago, valued with one valuer at $501,000 and then we arranged another valuation and it come 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 2nd valuer obtained enough comparable sales to support the purchase price.
There wasn’t enough comparable sales to support the valuation in the first instance
Also we investigated a bit more and found out the 1st 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 id like to share with developers and sales agents what they can do to avoid a poor valuation:
- Ensure the property is complete – don’t arrange bank valuations until the properties are complete with kitchens, internal fittings and most of the building complete
- Provide valuers with a valuation pack – in this pack its 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)
- 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 issue with the valuation report
- Give the valuer a great experience!
Whilst the above may not mean the valuation will be favorable or meet the contract of sale price, it will go a long way to assisting the valuer doing their job and help ultimately the most important person in the process – the purchaser.
If you have any further queries please feel free to contact Anthony at My Mortgage Freedom