Valuers working to tight timeframes for low fees are a barrier to brokers and valuers openly discussing valuation issues, says API NSW president Tyrone Hodge.
While Hodge supports greater communication and understanding between the two professions, allowing brokers to call valuers directly whenever clarification is needed or issues arise would be “uneconomical”, he said.
“It would be easier if the lenders were able to build that into their fee structure but under the current fee structure and the current service level agreements it just wouldn’t be practical to do it.”
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CBA seems to have made recent efforts in this area, it is unlikely many other lenders would follow suit, says Hodge, as the banks go to great effort to keep valuers and brokers “at arm’s length”.
“The instructions just come back through the lender and you don’t know if whether it’s a broker deal or not. It’s a big separation, even as the president of the API I would have no idea who the brokers are that are doing mortgage deals.
“I would get more information in relation to brokers from talking to my brother who looks after brokers for RP data. You tend to have some idea who the commercial brokers are because there are less of them and they tend to have direct relationships but resi brokers I wouldn’t have any idea where to start.”
“From the lenders’ side they don’t want pressure from someone who has a direct incentive to make the deal happen, and the broker wants the deal to happen because they get paid on the deal, that’s why the two have been kept so separate.”
A forum or panel option in which representatives from the valuation industry can pass on information to brokers and brokers can ask questions would be a viable option, says Hodge.
“In fact there’s a forum that exists like that between the lenders and the valuers, and it could easily happen between the valuers and the brokers, it would just be who would be responsible for facilitating it and who would be involved.”
A lack of understanding between the two industries is creating difficulties, says Hodge. Brokers are often unaware of specific instructions from lenders that valuers have to follow with regard to valuations, for example.
“Some discussion - from the valuation side and the broker side - as to understand how to deal with a rising market is a way to help them understand how it works. They could probably start to build relationships with their local valuers as well.”
It’s also important to put the issue in perspective, says Hodge.
“One tree doesn’t make a forest. There are probably a few disgruntled brokers, but I think 90% of valuations go through without it being a big deal.”
