Campbell Ferguson (OP Columnist)
WHEN we carry out valuations, we check many sources for information.
We are members of multi-listing websites; we scan the free ones; we check for the address on Google; we check our sales records and other relevant information.
We do include valuations that we’ve done in the past, if at the same urbanisation or pueblo, as they have been prepared based on market information and it also helps with consistency.
We keep our searches to as tight a location as possible and ensure that we are comparing like with like as much as feasible, while accepting that each property is unique in its size, accommodation, services, age, aspect, character and the host of other objective and subjective items that are all put in the valuer’s mind.
These are then ‘sifted’ through and eventually we arrive at an opinion as to what the prudent person in possession of all the facts would pay for one property as against another.
In carrying out all that research we come across a great deal of widely varying information, from inaccurate, fictitious and negligent, to helpful, factual and true.
No one source can be opinion-free as even a cold banking website is there as a selling tool. Sometimes what’s being sold is not just the property, as it can be just an attraction to draw the buyer into another matter.
Banks use the property to attract customers for all their services, such as insurances, monthly income deposits and the like; with the loss the bank might make on selling below the original mortgage level, being balanced by the benefits of bringing in a new, financially sound client, who can be encouraged to take on a high mortgage, perhaps at 110% of the selling price so that all costs are covered too.
At this time of a bottomed market it’s much safer to do that with the potential for values to rise being stronger, we all hope, than for them to fall.
It’s always been one of those strange and illogical occurrences for banks to be tight on lending when a market is down, but splashing their money about when the market, and the risk, is high. The buyer in these circumstances also has to be wary as, if they buy at above the market price and then have to sell shortly after, they are going to take a large hit as they can’t offer mortgages and they will be competing against banks who may be their next-door owner/sellers.
When all the costs of buying and selling are added, would they have been better looking for a non-bank property at a realistic market price and having a choice on the mortgage they could get?
