Malaysian property valuation
There is some word, unpublicised as far as I know, that Bank Negara is looking seriously into the valuation practices of local banks.
Mainly the way in which loan sales offices shop around valuers to get the valuation for the loan because it could be one of the factors driving up property prices.
Well, in a way, yes it is a contributing factor but the margin of difference at which they are valuing is not really that large - based on observation, it is a fluctuation of about 5% to 7% in "hot areas" but true enough also that in low transacted areas, they can undervalue as much as 25% of the asking price.
Which begs the question of is the market pricing too high or are valuers judging at too low / judging too high in hot areas in order to get the deal to do the final valuation report?
After all, if they keep giving low verbal valuations, they will not get the business. If they give high values all the time, then it is an advantage to the seller and doesn't take into consideration of things like the condition of the property.
Anyway, what I heard is that BNM wants a split whereby mortgage sales officers cannot have access to valuers, rather it must be handled by a separate department who will liase with the valuer independently.
I think this is good in the long run PROVIDED every bank does this. So far, I think only some foreign banks do so.
However, this is only a halfway measure, I reckon. Better to be more transparent (ha ha, this is Malaysia, I must keep reminding myself) and have something like in Australia or US where the property and last sale details are open for all to see, so there are websites for you to do a price check independently. All it needs is the Land Office to open its database - or sell the information - and let a web developer do the interface and sell ads on it.
Everybody wins... except for the seller who is trying to get a high price on a dud house. If your property location is good and it is maintained well, then you will get a good price. If not, then don't expect to get a good price. It's as simple as that.
Mainly the way in which loan sales offices shop around valuers to get the valuation for the loan because it could be one of the factors driving up property prices.
Well, in a way, yes it is a contributing factor but the margin of difference at which they are valuing is not really that large - based on observation, it is a fluctuation of about 5% to 7% in "hot areas" but true enough also that in low transacted areas, they can undervalue as much as 25% of the asking price.
Which begs the question of is the market pricing too high or are valuers judging at too low / judging too high in hot areas in order to get the deal to do the final valuation report?
After all, if they keep giving low verbal valuations, they will not get the business. If they give high values all the time, then it is an advantage to the seller and doesn't take into consideration of things like the condition of the property.
Anyway, what I heard is that BNM wants a split whereby mortgage sales officers cannot have access to valuers, rather it must be handled by a separate department who will liase with the valuer independently.
I think this is good in the long run PROVIDED every bank does this. So far, I think only some foreign banks do so.
However, this is only a halfway measure, I reckon. Better to be more transparent (ha ha, this is Malaysia, I must keep reminding myself) and have something like in Australia or US where the property and last sale details are open for all to see, so there are websites for you to do a price check independently. All it needs is the Land Office to open its database - or sell the information - and let a web developer do the interface and sell ads on it.
Everybody wins... except for the seller who is trying to get a high price on a dud house. If your property location is good and it is maintained well, then you will get a good price. If not, then don't expect to get a good price. It's as simple as that.
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