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Concern over valuation turnarounds

Advisers say their clients are experiencing severe delays with turnaround times for registered valuations, putting first home buyers in a race against time on auctions.

Wednesday, March 31st 2021, 7:34AM 7 Comments

Multiple advisers told TMM Online that bank panel valuers are struggling to cope with the weight of demand in the market, with valuations taking up to two weeks to come in.

The problem has affected first home buyers, which require a registered valuation if they have less than a 20% deposit. 

Most big lenders require an RV to approve a home loan.

The delays are creating difficulties for clients at auctions, with buyers unable to compete if they don't have an RV. 

Registered valuations can cost about $1,000, meaning some clients have forked out a significant fee for a valuation but have been unable to get one in time.

"The turnaround times aren't there at the moment," said adviceHQ's David Green. "It's putting time and cost on to first home buyers, who are usually the ones requiring registered valuations.

"So if they see a house they like, and ask for a registered valuation, it could take a week or two. If the auction is brought forward, you don't have a registered valuation, so you can't offer, and you've spent $1,000 for nothing. It's causing a lot of pain for purchasers and vendors.

"The demand is overwhelming and placing a lot of strain on the system, whether it's valuations, banks, or builders, at the moment, it's overwhelming for everyone," Green added.

Sarah Bloxham of Lets Talk Mortgages said valuation turnarounds went from "one extreme to the other" in this market. 

Bloxham said one client was forced to wait three weeks for their valuation, delaying a private sale.

She added the fees for quicker service were "really taking it out of first home buyers' pockets".

"I advise all clients to have a pot of around $5,000 for costs towards their home for the valuation, the build report and solicitor," Bloxham said.

Bloxham is currently advising clients outside of Auckland that they will have more chance of winning a tender if they go unconditional. However this means clients need valuations, leading to extra risks around valuations.

"The cost of valuations is soaking up their savings," Bloxham added.

Tags: Lending valuations

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Comments from our readers

On 31 March 2021 at 10:18 am marchyp said:
Yesterday 9 valuers declined to quote for an urgent task and the one who accepted has quoted $2k for an urgent valuation.
On 31 March 2021 at 10:47 am Straight shooter said:
Yes another forced upon us task, initially only to meet the Aussie owned banks RBA requirements and since adopted by a few NZ Banks. This whole system is a Rort at best, its supposed to place an independence barrier between client, lender, broker and valuer. All it has done has added a huge cost to the consumers, mostly First home buyers who can afford it least. Its added delays to the process and a huge middleman charge which is obscene in most cases where CL & V the two Monopolistic providers see it as an opportunity to add as many fees as possible such as urgent fees for a valuation that will still take 10 days to be done. A client of mind was quoted $1265 for a construction job by a local firm, when i said it had to be done via V the same valuer picked up the job but the cost had risen to $2070 ! go figure. As an advisor it also adds over an hour of work in some cases loading all the info into their system which is unreliable and slow. Not to mention the 10 e-mails we get as result of ordering a report which we also need to deal with. I am sure this is another practice the COM COM would be interested in reviewing as it certainly hasn't added any value to consumers just an added cost.
On 31 March 2021 at 11:10 am Amused said:
The definition of a monopoly is “the exclusive possession or control of the supply of or trade in a commodity or service” and respectfully that is exactly what has happened now to NZ consumers when they are required by their bank to provide a registered valuation for final finance approval.

If you compare both the average cost of a registered valuation and the amount of time it takes to source one prior to the introduction of the panel valuation ordering services it is very clear that NZ consumers are now been disadvantaged financially. No one could argue with this. For example prior to Christmas both panel valuation services charged customers $100 extra for ordering an urgent valuation (sigh) Now both are charging customers $250! I have been operating as a mortgage adviser for almost 19 years now and in that time I have never once seen or heard of a registered valuer charging a customer more to complete a registered valuation urgently. The valuer either has the capacity to do the job for the customer or they don’t. So why have the panel valuation services (and certain unethical valuers quoting on jobs) now been allowed to start charging customers more for urgent valuations?

Mortgages advisers were all told prior to the introduction of the panel valuation service that the cost of a registered valuation would not be increasing for our customers. This has now been proven to be untrue. The delays also been experienced by both advisers and our customers now when it comes to sourcing a registered valuation are just a natural by-product of having another pair of hands been involved in the process. The supposed justification for originally having these extra “pair of hands” involved in the valuation process were always tenuous at best. I have not in my time seen evidence to suggest that registered valuers and mortgage advisers are actively colluding to inflate valuations. Obviously those advisers and valuers who are doing this should be barred from the industry.

These above delays (and added costs) could be completely avoidable if the panel valuation services could be by-passed and the customer and their adviser at least given the choice of accessing a valuation either via the panel ordering service or going direct to a local experienced “panel” valuer. Banks like ANZ and Westpac who until May 2020 gave their customers this option need to revert back to this policy. Lest we forget both these two banks told the Commerce Commission officially that they would allow all customers to have this option and on this basis the Commerce Commission ruled that the panel valuation service wasn’t anti-competitive.

If all the banks don’t allow their customers the choice of accessing a valuation either via the panel ordering service or going direct to a “panel” valuer then the Commerce Commission is going to have to step in now and fix what is a broken system disadvantaging NZ consumers.
On 31 March 2021 at 11:48 am valkyrie6 said:
so are the banks clipping the ticket on these?, if banks now force customers to order valuations through their preferred valuation platforms are the banks profiting from this? that would be a monopoly.
Also if some banks flag for valuations all the time and in a lot of cases for under 80% deals, are they in effect increasing the values of the properties they hold securities over and therefore lowering their LVR's on the books (good for capital requirements) but making the customer pay, which is brilliant.
On 31 March 2021 at 4:49 pm JeffQV said:
These delays on top of unacceptable bank turnarounds are making life hell for most FHB's who need high LVR borrowing. Epic fail by the whole lending industry (with the exception of Brokers and Lawyers)
On 31 March 2021 at 6:31 pm Amused said:
Following on from my earlier comment today I have been advised by local valuers that bank staff at branches are now routinely circumventing the panel valuation service for their customers. This is being done because of both the delays been experienced when ordering a valuation via the panel valuation service and the extra costs incurred by customers.
These valuers been approached directly by frontline branch staff are on the banks historic panel of approved valuers. From the banks own perspective then there is no risk going direct to these valuers especially if it saves their customer both time and money. The next logical question that we need to be asking now is if bank staff can do the above for their customers why can’t mortgage brokers?

I wonder how the Commerce Commission would react to the above especially when first home buyers predominantly use a mortgage broker.
On 1 April 2021 at 11:36 am haggis1945 said:
There's a really easy solution to this. Put the burden on the Auctioneer and make it compulsory for the Austioneer to supply a copy of a registered valuation to every bidder - simple!

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AIA 6.35 5.25 5.45 5.99
ANZ 6.34 5.59 6.05 6.29
ANZ Blueprint to Build - - - -
ANZ Special - 4.99 5.45 5.69
ASB Bank 6.35 ▼4.99 5.45 5.69
Avanti Finance 6.65 - - -
Basecorp Finance 7.25 - - -
Bluestone 6.89 - - -
BNZ - Classic - 4.95 5.39 5.69
BNZ - Mortgage One 6.39 - - -
BNZ - Rapid Repay 6.39 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Std, FlyBuys 6.39 5.55 5.99 6.29
BNZ - TotalMoney 6.39 - - -
CFML Loans 7.25 - - -
China Construction Bank - 5.35 5.80 5.99
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - ▼4.89 - -
Co-operative Bank - Owner Occ 6.25 ▼4.99 5.39 ▼5.69
Co-operative Bank - Standard 6.25 ▼5.49 5.89 ▼6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 ▼4.79 5.29 5.39
Lender Flt 1yr 2yr 3yr
Heretaunga Building Society 6.50 5.60 6.00 -
HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 ▼4.79 5.15 ▼5.69
Kainga Ora 5.85 5.31 5.58 5.97
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 6.79
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 5.89
Liberty 4.84 - - -
Lender Flt 1yr 2yr 3yr
Nelson Building Society ▲6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 ▼5.39 ▼5.79 5.99
SBS Bank Special - ▼4.89 ▼5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 ▼5.65 6.09 6.39
TSB Special 6.25 ▼4.85 5.29 5.59
Unity 5.65 4.95 5.55 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
Lender Flt 1yr 2yr 3yr
Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 ▼5.55 6.05 ▼6.29
Westpac - Offset 6.39 - - -
Westpac Special - ▼4.95 5.45 ▼5.69
Median 6.34 5.33 5.79 5.93

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