Down-valuing by a distance – is this a problem for you?
Monday 15th November 2010
We all know that down-valuing is a problem, but EAT would be particularly interested to know agents’ experiences of ‘out of area’ valuers.
Invariably, they work for national groups, do not sell property themselves, and can be based miles away from where the property in question is. That means they do not visit the property but rely entirely on recent sold data, which they get from their computer and/or by phoning estate agents in the area.
In other words, they can’t possibly know of a particular property’s setting or condition, or learn how long a comparable took to sell or what the interest was in it, or even whether it is a true comparable at all.
We’re told of one very recent case where one property was down-valued by £15,000.
The agent was understandably not happy so rang the valuer, who was based in a different region, to ask about the comparables he had used.
It turned out he’d rung round various local agents and had used three recent sales – one, confusingly, from the agent’s own stock.
However, the other two comparables turned out to be part-exchange resale properties where the seller, a developer, could afford to sell for what they’d paid – ie, at a heavily discounted price – because the developer had made the profit on selling the new unit. One of these resale properties was such a bargain that it had a sale agreed on it within six hours. The other property was at the entrance to a busy development – just how busy, the absentee valuer could not possibly have known.
In this case two comparables which were not true comparables were used.
The sadly predictable result? The buyers pulled out, unable to get a mortgage, but also feeling that they would have paid over the odds.
We would like to have your views on this one, so please post below.
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