Hi all,
I just read an interesting article by Ian Hosking Richard in YIP magazine and was wondering:Do valuers know the sale price of a property when conducting a valuation? (im pretty sure they do)
How much are they influenced by this? and
Should they know the contract price or should it be kept secret so they give an unbiased value?
Hi Fredo
I'm presuming you're talking about a lender's valuation, prior to a purchase. Yes the valuer is given a copy of the front page of the contract. I guess the price on the contract does establish the price someone is prepared to pay for the property on the day. Whether that establishes the "market price" has been argued about for quite some time
Cheers, Paul
Paul Dobson | Vendor Finance Institute
http://www.vendorfinanceinstitute.com.au
Email Me | Phone MeAn alternative way to finance your home.
Typically for purchases valuers are given the contract of sale. Which means they should know the sales price. Also when conducting a valuation they will loook at recent sales of properties in the area. A valuer would argue by looking at that information they are infact forming an objective view.
I have had valuations come in short (typically around construction) and by showing a vauler comparable sales etc they ahve reconisdered.
In the end though i strongly believe valuations are an art rather than a science.
I have seen one valuer that had an amazing database that would have been updated with the recent sales prices for the whole suburb. A laptop with internet connection wireless instantly updated with recent figures.
A valuation is a mix of both science (research of comparable sales) and some human nature.
It must be scientific as it is based on the valuer's research which they must be able to prove when required in a court so that they must properly review each subject property and how it compares to the property which they are to value.
The only thing left to chance is the market sentiment which they are to disregard esp if there is a rising/overheated market. You cannot estimate the degree of competition that will exist at an auction.
Fredo,
Any valuer basically works on suburb and size of your investment. Access to schools, shopping centres and public transport raise the price of the investment. Firstly any valuer or valor has a set price for a suburb. Eg A property n Cannington is worth $350,000 for 650m2 of land. From there the price can rise if public transport, schools, parks and shopipng centres are easily accesible. So lets say there's a 3×2 single story home on there. You could now be looking at $580,000 depending on the state of the home. Is it new? Is it old and needs alot of work? Is it worth fixing at all? And lastly residential coding is taken into consideration. Is the house worth knocking down and building 3 units in lieu of the residing home once again raising the price. In answer to your question, yes they do have an idea after a little research but only vague until they actually inspect things.
New Homes Consultant
0439 555 964
Stewart Benier
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