Where do you work?
What is Mortgage Valuation?
When a buyer is interested in buying a property, he will need to approach the bank for a mortgage. Because property transactions are capital intensive, buyers typically only put up 20-40% equity (depending on your credit rating), borrowing the remainder from the bank.
When the buyer applies for a mortgage, the bank will commission a property valuation firm to conduct a mortgage valuation. The report is used to establish whether the property is worth the value that the buyer is proposing to buy it for. The bank requires it to protect itself in the event that the borrower defaults, i.e. fails to pay up. Should the borrower default, the bank will have to sell the property, and they need to know that if they do sell the property the proceeds can cover the loan.
Here you might ask, why doesn't the bank just hold onto the property for capital appreciation, while renting it out to derive income in the meantime? The short answer to that is that banks prefer to focus on their core business of banking, not property investment.
So how do property valuation companies make money?
Banks typically have a bunch of property valuation companies sitting on their panel. You get onto the panel on the basis of your company's credentials and track record. Simply put, the more panels you sit on, the more business you get. Banks will distribute the cases among the firms on the panel on a daily basis. If they find that a particular valuation company is swamped, i.e. spike in the number of late cases, they will give the case to another company. Therefore, it is important to deliver the reports before the stated deadlines, so the bankers return to engage your services.
Since mortgage valuations are typically paid by the banks, they tend to muscle for a lower fee. With their fees cut, property valuation firms go for high volume to make up the difference. The faster you churn out the reports, the more revenue you generate. However, it is a dangerous tight rope dance between churning out the reports quickly and accurately versus making crucial mistakes and getting sued for professional liability.
What does this mean for you?
A break-neck pace, day in day out. Countless appointments to arrange. Appointments at nights and on weekends. Rushing from house to house all over the island, arranging for appointments on the go, with barely enough time to catch my breath. Despite working rather quickly already, I often still need to work till 8pm on the nights I don't go for night inspections, and OT till midnight once every two weeks when the backlog piles up. A tough job, yes. Sigh.
I hope my bonus will be fat :(
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