got a couple of vals back in middle to outer NW sydney burbs with the following style comments
We have considered a Risk Rating for Market Volatility as 4 due to the market considered inconsistent with regards to sales and uncertain market conditions
because English is not my first language, and im seeing a stock shortage and a robust market, can someone pls explain to me what these comments might actually mean ?
ta
rolf
ta
rolf
ok here it is.
Market considered inconsistent: Translation; There have been a few high sales but not enough as yet for me to be able to truly justify this price if I am taken to court. There are still a few sales that do not support this price.
Uncertain Market Conditions: Translation; The market has picked up very quickly, probably due to a reduction in interest rates, if the RBA raises rates then this rise could well come to a grinding halt and these recent prices may look high.
Basically the valuer is saying that "holy hell the market that has been dormant, and flat after falling has jumped". Not just a nice steady slow increase but jumped a lot. Valuers need to be able to justify the valuation figure (not the purchase price) based on analysis of (hopefully recent) sales evidence and if the valuer went to court with the available sales evidence the mortgage insurers barrister would fry them as analysis of the sales evidence cannot really justify the prices.
For example. I recently rubber stamped a vacant land with a 4 or two in it. There was one other sale that justified the price but that was it. Not enough sales evidence to justify the price in court.
Two weeks later I rubber stamped the contract on another block of land around the corner that sold for $50k less that was available for sale at the time the previous sale was effected. I was feeling a bit worried about the first rubber stamping effort.
Then came the query from valex that the purchaser thought the property was worth more than the price they paid and felt I should have valued the property higher. I did not consider just 2 sales to be sufficient evidence of a shift in the market, thinking that they could have just been a couple of keen buyers as shown by this lower contract price.
I asked them to provider evidence as to why they felt I should value the property above the purchase price (the asking price had been below the purchase price of the other block). They came back with three sales, the one I had valued, the other one and one I had not seen. The third sale was over 6 months old and I had not searched further back as I had rubber stamped the contract.
This changed the game as far as I was concerned. Two sales are not enough to hang my hat upon, but three, well yes that is sufficient. I rang my manager and talked with him and he agreed with me changing the figure. I raised the val figure above purchase price (probably with a 4 or two on the risk rating). If it wasn't for the older sale I would not have moved, come what may. However I felt I had enough evidence to justify the valuation figure (as opposed to purchase price) if I am taken to court.
I trust this helps.
