ST Forum : Indicative valuations are a vital tool

26 JAN 2011,
Indicative valuations are a vital tool

INDICATIVE valuations are a daily part of the property business ('Don't rely on indicative valuations' by the Singapore Institute of Surveyors and Valuers; Monday).

For every sale or purchase, clients want to know the 'bank valuation'. Buyers need the bank to lend them money. Would a purchaser's bank be bound by a professional valuation done by the Singapore Institute of Surveyors and Valuers, or would the bank still send their valuers, who might arrive at a different value?

If the latter, what is the point of getting a professional valuation from a valuer and not through a bank?

I am in the real estate business and I always ask a few bankers from different banks for an indicative valuation of a unit. The most blatant answer for a unit valuation in an established condo was a range of $3.2 million to $4 million involving four different valuations from three banks. So where is the real value?

It was a four-year-old condo with all parameters known to the bankers and their valuers.

A desktop valuation should be very much possible in a case like this. Units like this have been traded before, all figures are there to be seen by agents, so I assume the valuers have similar tools.

The indicative valuations for condo apartments that I receive from bankers (who get them from their valuers) usually differ by between $50,000 and $200,000.

Monika Fischer (Ms)