Brokers like it fast, lenders like it safe. I’m talking about valuation services of course. No doubt that this oversimplifying the situation, but there is truth in the statement that both parties are looking for slightly different things from this essential element of a mortgage application process.
With increasing competition between lenders to deliver the ‘killer’ proposition that will capture brokers’ attention, they can’t help but listen to the oft-repeated wish for a speedy answer confirming the value that has been ascribed to a property and whether it meets lending criteria.
The reality is that with average valuation turnaround in the sub-five working days space (even in the South East), this element of the process is usually completed far more quickly that the 10+ days that lenders aspire to achieve for their initial response.
There is something of a conflict of interests here too, lenders have an obligation to fully consider the risk associated with the property and are now rightly asking more complex questions of valuers which extend beyond ‘here and now’ valuations. They are increasingly interested how the circumstances of the property could change in future (6ft flood anyone?) and how their loan security may change in value over time.
It’s also probably not well-known that the valuers’ bible, the RICS Red Book, requires that valuers be given ‘time for reflection’ before submitting a report. It’s not always the right decision to come up with a value on the spot, as many brokers who are told their expected value was an over estimate would no doubt concur.
Technology is likely to shave time off the process to some extent in the future but there is a tipping point beyond this which will increase risk and do a disservice to both other professionals in the process and the applicant.
However, this conundrum is far from unsolvable. Making the right enquiries should uncover those lenders and partners who are already developing novel systems that can provide views regarding suitability and assist in both managing applicant expectations and avoiding fruitless applications. Faster and safer…result all round.
