Reliable property valuations
Property valuation in the absence of deep market evidence can be unreliable. I speak as a valuer myself.
Having bought an old property in the Spring of 2010 underwritten by a bank valuation which incorporated a 50% margin of comfort (for the valuer), two questions popped into my mind.
Firstly, although a lender needs to obtain a valuation from a professionally qualified person, what purpose does a valuation serve when it has been prepared not as a true opinion of value (the price that would be achieved between a willing buyer and a willing seller) but simply on the basis of the valuer wanting to minimise the possibility that a negligence claim might ensue for excessive optimism in the event that a borrower defaults and the financial institution suffers a loss?
And secondly, who really is the arbiter in a system which should be seeking a fair rather than a cautious effort?
The introduction of the RICS Valuer Registration Scheme in 2011 simply does not have the potential to reach into the extremes of the residential market - or does it?
Having bought an old property in the Spring of 2010 underwritten by a bank valuation which incorporated a 50% margin of comfort (for the valuer), two questions popped into my mind.
Firstly, although a lender needs to obtain a valuation from a professionally qualified person, what purpose does a valuation serve when it has been prepared not as a true opinion of value (the price that would be achieved between a willing buyer and a willing seller) but simply on the basis of the valuer wanting to minimise the possibility that a negligence claim might ensue for excessive optimism in the event that a borrower defaults and the financial institution suffers a loss?
And secondly, who really is the arbiter in a system which should be seeking a fair rather than a cautious effort?
The introduction of the RICS Valuer Registration Scheme in 2011 simply does not have the potential to reach into the extremes of the residential market - or does it?
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