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The Real Estate Institute of New South Wales’ president, John Cunningham, has slammed a new market initiative to eliminate valuation discrepancies, calling it “utter nonsense”.
His comment comes after online property website ReValu8 introduced measures to eliminate valuation discrepancies by encouraging vendors to seek independent valuations from a licensed valuer before listing a property for sale.
In an earlier REB story, Disruptive platform promotes fair property sales, ReValu8 COO Chris Wisbey said there are “huge issues” with valuation discrepancies in the current marketplace, with some properties recording a difference of up to 25 per cent in value.
He said this can significantly impact a property sale.
But Mr Cunningham criticised the suggestion, calling it one of the most “flawed and misguided” solutions he has ever come across, especially since the valuer would consult with the local agent anyway to determine the property’s value.
He said residential valuation is a highly subjective assessment and is made up of “thousands” of elements.
“So to arrive at a singular figure to guide buyers is nonsense,” Mr Cunningham told REB.
“Providers are trying to simplify a very complex set of criteria, basing the whole disruption assumption on applying binary applications to complex set of elements.”
Mr Cunningham said ReValu8’s measures are not the solution to a problem, and will confuse buyers instead.
“Putting a valuer in to value your property, unless they are a local specialised valuer, is applying far more guess work than an agent would ever do.
“They don't know the nuances of the street, they don't know the nuances of the suburb. They don't know the intimacy of the sale.”
Mr Cunningham said he is concerned about people making decisions on potentially flawed or discredited information supplied by non-independent parties.
He said the 10 per cent range in NSW is working well, adding that despite the still strong market Fair Trading is reporting significant reductions in consumer underquoting complaints.
Earlier this year, underquoting law reforms came into effect in NSW and Victoria.
[Related: Industry supervision ‘either poor or absent’]
