Correctly value a property
By Karen Hall, with Evan Harper
Evan Harper, a stalwart in the auction industry, has recently joined the Auctioneer sales team. As an experienced valuer, we thought it would be helpful to get his views on the importance of correctly valuing a property when buying or selling on auction. This is the advice he has to give…
Due to poor lending criteria or poor inconsistent valuations given by certain Estate Agents or Financial Institutions a large number of properties eventually find themselves on the Auction Platform with incorrect data, values, descriptions and condition of the property.
To be successful and fair to both buyer and seller it is very important to have the property valued by a recognised Professional Registered Valuer prior to the auction that will be able to ensure that the right property is the one up for auction together with a full description and condition of the dwelling and property. Any legal discrepancies and conditions should be included in his valuations as this could also have a bearing on the selling price.
This may sound over simplified… right? But in 2 instances, Evan arrived to value a property that was briefed into him as vacant land. Both times, he found that the properties had dwellings with values of over R1 million, which considerably affected the final valuation.
Or, when a property is described as neat, well kept and in good condition, but on inspection it was situated next to a squatter camp and all fittings (including the kitchen sink) had been systematically stolen.
Besides confirming that the property actually exists and is in the condition it is described to be, the valuer would, in all cases, look at the current market, area and current sales in determining his final valuation.
Not to mention, that according to the Consumer Act he must disclose all adverse affects either on the dwelling or property and should be pointed out by the auctioneer when proceeding with the auction.
At some auctions, the Auction House even has the valuer present at the auction to answer any question by any interested party relating to the subject property. And this, in many cases, helps in the finalising of the sale.
So ask if the property has been professionally valued, especially if you haven’t personally visited the property.
This article is the seventh in The Auctioneer’s auction education series. In further articles we will be pursuing all aspects of the auction industry and this is best done on consultation with experts in the industry. While we have instituted a board of experts to assist us, we are always looking for more expert opinions. Should you be interested in contributing please contact email@example.com