So let’s tackle this head on. In my opinion, there is no such thing as a down valuation and, speaking from my own experience of sitting on both sides of the fence, never has an employer asked its valuer team to pull back on its valuation figures.
Quickly changing markets – both rising and falling – present challenges, expectation and reality in terms of house prices which may or may not be met.
These changing conditions create collisions, and collision is the driving force behind the down valuation narrative which has once again appeared. But just to repeat, there is no such thing as a down valuation.
This is simply a difference in opinion over what a particular asset is worth. There are no deeper or more sinister connotations than that. Values are temporarily buoyed by optimistic selling figures or enthusiastic buyers. They then receive valuation advice which is carried out for the benefit of the lender that sometimes fails to match expectations.
Two sides of the industry
Within this process it often seems like agents are being pitted against valuers. But let’s take a step back here.
Both are essentially two sides of the same coin and both are involved in the buying and selling of residential property. Interestingly we track our valuers’ valuations compared to the declared asking price or given assessment of value at the time of instruction.
Unsurprisingly, there is a resetting of expectations in terms of where the market value lands compared to the initial figure but the percentage of cases where this happens – either above or below the stated figure – is significantly lower than recent articles would suggest. The facts are not supporting the narrative.
So, let’s just drop the term down valuation altogether. As an industry, we need to be more closely aligned in the way we look at and advise on property. It is in the best interests of the client and after all it is the client for whom we act.
Market value is an internationally recognised valuation definition, and any deviation from that at the marketing stage will only lead to a difference in opinion further down the line.
To do this, we need to ensure that the lines of communication remain open.
Agents need to present why they believe valuations may differ, whilst being mindful of the valuation process and the evidence provided by previous completions. The more evidence we have to tell the story and build a more accurate picture, the better for all concerned.
Being at loggerheads and raising the down valuation excuse helps nobody, and this this applies to valuers as much as agents.