Why you should not use a valuer who is a real estate agent

by Chris Lang on April 13, 2011

Passport stamps At the first glance it may seem unimportant whether or not a valuer you have engaged to prepare a valuation of your property is a real estate agent. So a person has two jobs, since when is this a bad thing?

But when you look closely, a whole different picture unravels.

You may remember how in this blog I suggested you take the property appraisals that real estate agents provide, with a grain of salt. The reasons are obvious – proper valuations are prepared by professionals who use all the information available about your particular property, such as the features of the house, its age, the size of block it’s sitting on, etc – not just the past sales data for your street / suburb.

And some real estate agents are aware of the fact that their appraisals are not being taken seriously. This is why they become qualified valuers – to be able to provide a proper valuation to their clients, as opposed to just an appraisal.

“OK”, you say, “so that is even better – now they can give me an evaluation I can actually trust”.

Not so fast!

Since an estate agent’s primary goal is to get you (the vendor) to list the property with him / her, the appraisal they provide serves two purposes – to get your listing, and to get your expectations set at a price that allows a quick and easy sale. The faster your house sells, the faster they get a commission and move on.

NOW can you see the reason a valuation obtained from a real estate agent who wishes to sell your house should not be trusted? If they provide a below-market-value valuation, the house is likely to sell quickly.

And this is not something that could happen in theory – Peter Mericka (real estate lawyer) has a story to tell about a client who had a valuation done by a real estate agent who was also a valuer:

“The estate agent/valuer estimated the current market value at a figure which, according to our client, was “ridiculously low”, so we advised the client to obtain a second valuation. The second valuation was prepared by a professional valuer who is NOT also a Licensed Estate Agent, and was $100,000 higher than the first valuation. We sold the property for a figure in excess of the second valuation.”

I guess the key to a successful real estate transaction is to follow the “Buyer Beware” principle, and make informed decisions.

Photo source

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: