A good place to start would be to briefly explain the valuation process. The first step is receiving the instructions from the client. It is always beneficial if the contact details provided are for the best point of access for the property. If the property is leased, then the managing agent’s details are best. A lot of time is lost when a valuer has to track down the right person. Once an appointment has been made, the valuer will conduct the inspection. This involves a brief visit to the property, where they internally and externally inspect the property, documenting the construction and condition of the property, and drawing a floor plan. Access to every room is usually required. When the valuer has completed the inspection, they then gather a list of properties that have recently sold nearby to the property. They would normally then drive past each of these, and determine their comparability to the subject property. The valuer then must analyse the information they have gathered to determine the market value. When comparing recent sales, the valuer will look at the location of the property, the size of the land, the quality of the improvements and then any positive or negative attributes such as water views or power transmission lines. The valuer will then analyse the comparability of these sales to the subject property, and in doing so, will determine the market value.
Make sure you prepare the property for the valuer in advance, ensuring it presents in the best possible manner for its age and condition. Valuers are skilled observers, and are experienced in looking beyond the clutter of a lived in property, however sloppy presentation is always going to paint a negative picture; not only of the property, but will also give away a lot about the person who lives there. Someone who doesn’t maintain their gardens, or even pick their clothes up off the floor before a valuer visits with a pre-arranged appointment, is also liable to mismanage other areas of their life, including their personal finances. This is likely to alert the valuer to a higher level of risk, and a nervous valuer is a conservative valuer. Simple as that. This does not mean the client should paint their house and replace the carpets the weekend before the valuation, but they should make the effort to tidy up. Use it as an excuse for an overdue spring clean if you may. Whenever you have an important meeting hoping for a favourable outcome, you would generally take a bit longer in front of the mirror that morning. Why not the same for the place within which you live? Consider a valuation something like a job interview for your house.
You would be surprised with how some people speak to a valuer, either over the phone or at the property. Although the valuer is bound by a Code of Ethics demanding impassionate and unbiased professionalism, it is difficult to maintain your impartiality when a client is recalcitrant when arranging inspection, or just plain rude. A valuer is there simply observing, analysing and reporting.
The next area may arguably be the most important: it is easily the single most common cause of conflict, and that is the client estimate, or EMV. When given an unrealistic EMV, an experienced valuer can almost instantly detect this, as they are well versed in the area within which they work, and are quite knowledgeable on prices achieved in that area. Contrary to popular myth, providing a high EMV does not build in any type of “buffer” above the market value, but rather indicates immediately to the valuer what type of client they are dealing with, and sets the mindset with which they then deal with the applicant or broker. This is far from beneficial for the client, and although often tempting, will almost certainly result in a conservative approach being taken by a wary valuer. For example, if a realistic estimate is given of $560,000 for a property, and the valuer’s research indicates a market value of $540,000 to $560,000, then the valuer is likely to adopt the estimate of $560,000 as the Current Market Value within the report. If, for the same property an estimate of $750,000 is given, then the valuer is instantly alerted to the nature of the situation, and would be far more inclined to adopt a cautious approach and come in at $540,000.
If you have any other questions please phone us on 03 9832 0802 or complete the form below.