28 Feb Sometimes… You Get What You Pay For…
Sometimes… You Get What You Pay For…
Family Law Valuation Assessments
In the past couple of years I have noticed, all too often, a decline in the quality of Family Law valuation assessments by Valuers in South East Queensland.
Post GFC, if in fact it is ‘Post’, many of the mortgage styled Valuation firms, in an attempt to keep seats warm, sought work outside of their usual day to day practice, including Family Law.
No disrespect to these guys, but they are in the Banking sector of the Valuation Industry, that looks at three sales, punches out an automated two page report in 30 minutes per job, and are expected to do 5 to 8 jobs per day!
Their focus is all about turn-around times with quality of job being low on the list of priorities. What we’re seeing in Family Law work is exactly this, brief reports, no or little on-site inspections or measurements taken and a maximum of 3 sales.
Here’s a quick real life story as at last week:- I’m asked to assess a market value of a dwelling in Shailer Park. The property has been on the market since October last year. At the outset of marketing, offers over $400k were sought. By the time I was there, the asking price has been set at $399,000 and has been available at that price for at least 3 months.
In early August, I’m supplied with another Valuer’s report, 2 pages, 3 sales and no mention of marketing history. Valuation figure is set at $437,500.
I contact the other Valuer and ask a series of questions such as: Were you aware the property was on the market? Yes I saw the sign there. Did you contact the selling agents at all? No I didn’t see the need.
I then went on to advise as to what the agent had advised as to history etc. Along the way it was revealed the Valuer didn’t even know what the purpose of the Valuation was for and was surprised that it was a Family Law matter!
When it came to the sales evidence, there were two 2011 sales in the street, one clearly inferior and one clearly superior. Further there were some 6 additional sales within 500 metres of the property. The other Valuer’s sales were 2 kilometres from the property and it emerged were “sales used in another Shailer Park job”.
I don’t mean this to sound like I’m picking on this Valuer, it is just one of many we have seen pass through this office in 2010 and 2011.
Again without sounding like we’re it and there’s no-one else to compare, I feel there’s some minimum standards for all residential valuations and summarise these as follows with a view to assist you and the instructing Solicitor:
- Aim to use those Valuers with real Court experience.
- Aim to use those that will be there for you when you need them. ie, they understand the process of without prejudice conferences and the Court process.
- They provide ‘long form’ reporting which is inclusive of at least 5 or 6 sales and where possible vacant land sales that underpin the summation approach.
- The sales relied upon are (1) comparable; (2) located as close as possible to the property; and (3) they know all they can about those sales. If that means knocking on the door or ringing around Agents until you find the people who sold it, then that’s part of the game.
- They follow through on nearby listings and establish local market forces and conditions.
- They measure all external walls. They should not guesstimate!
There is more that I could say on these guidelines, however if these basic points were covered, then the Valuer and the report will have substance and more importantly be reliable.