Why the current system of property valuation is screaming out ‘Enough is enough!”.
Ask any kid what his ambition is and you won’t hear anyone say “I want to be a valuer.” Well maybe parents should start drilling it into their heads. “Aim to be a valuer -it’s the easiest job in the world!”
I recently discovered that the process of buying a piece of property actually involved it being valued three times. Yes, this is true. The first is immediately after finding that all too perfect shop lot, which have all the numbers adding up to Fatt (8). You call up the bank and ask “Hey Bro, how are you lah? How come never see you in Backyard these days? By the way, can check this one for me please – 3,000 square feet, double storey, Puchong Perdana.” Your “Bro” the ‘Bank Relationship Officer’ then calls you back and tells you the value of the property. The whole process from the time you say ‘Hey Bro’, to the time you get the magic number takes all of 10 minutes.
You duly go through all the paperwork, then comes the part where you have to pay the stamp duty. The stamp duty is based on valuation number two done by the Jabatan Penilaian dan Perkhidmatan Harta (JPPH). And guess what? The valuation is pretty close to the magic number given to you by “Bro”.
Valuation number three comes as part of the loan documentation process. The banks insist that you do another valuation. Apparently the bank does not trust the valuation by “Bro” and the JPPH, and he informs you that the Bank’s Panel Valuer will be coming over to inspect the Shoplot. And this time, you have to PAY for the valuation. Oh, and guess what? This valuation is based on the ‘market’ value of the property and not the intricacies of valuing a property.
Valuation fees are not cheap – 1/4% of the first RM100,000, 1/5% of the residue up to RM2 million and so on. So if the valuation of the property you want to purchase is pegged at RM1 million, the fees charged is RM2050! The reason for conducting this valuation is supposedly to look at “enhancements” to the property and other factors that might increase or decrease the value of the property with the ultimate aim of using the valuation as a basis for the financial institution offering you a loan amount.
Amazing isn’t it. The Bank’s Panel Valuer will come to the property and look around a bit, take some photographs, all the while knowing the valuation is based on recently- transacted prices for a similar unit in the area. And you suffer the ignominy of paying for this valuation even if your loan is finally not approved.
The burden on businesses to cough out so much money when buying a premises is bad enough, what more if there are many layers of additional fees to be paid which goes into the pockets of another business, namely the Panel Valuer.
The current NAPIC or National Property Information Centre published online by the JPPH at http://napic.jpph.gov.my/ portal simply puts up information about transacted prices for the various types of property – condominiums, bungalows, shophouses, etc., according to each state. This is simply not enough. The values of actual properties and their respective addresses are more important. Why can’t a single valuation be done by the JPPH and this information be published online?
Then everyone including buyers and banks can make an informed guess about the value of property without going through the current inefficiencies within the system.
This database would not only make it cheaper for businesses and consumers to purchase property. It would also enable JPPH to charge a valuation fee as part of its service offering and cut out these thriving Panel Valuers.
How’s that for Value-Add?
The views expressed here are the personal opinion of the columnist.