How the flat valuation process works

Valuers derive a value by comparing previous transactions that occurred in the area. A valuer is assigned at random after receiving a completed request form with payment from the flat owner. -TNP
Foo Jie Ying

Fri, Oct 19, 2012
The New Paper

PERSONAL insults are common in his line of work.

"When we send a fresh graduate, they (the home owners) say that she is young, 'blur' and inexperienced.

"But when we send an experienced lady, they ask us why we are sending an 'aunty'," said Mr Eric Tan, chief executive officer of real estate appraisal company GSK Global.

The company offers valuation services for HDB flats as well as other aspects of real estate consultation.

The 44-year-old said it is common for home owners to resort to insults and threats to raise the value of their flats.

"Once, there was a home owner who called 10 times in a day to ask to increase the value of his flat," Mr Tan revealed.

For HDB flats, valuers derive a value by comparing the previous transactions that have occurred in the area.

A valuer is assigned at random to assess the flat's value after receiving a completed request form with payment from the flat owner.

Other factors then come into play: the renovation the flat has undergone, the view, the storey the flat is located on, and how many units there are on the same level.

Going through the checklist of these different factors, the valuer then makes adjustments to determine the flat's value.

The valuation report is usually ready within two weeks of the valuer's visit.

If the flat owner is not satisfied with the valuer's quote, he or she can appeal against the valuation report.

HDB will then assign a new valuer for the flat.

But the factors mentioned by Mr Tan are only guidelines when it comes to putting a price to a unit.

Mr Tan, who has been in the line for 20 years, said this is when experience matters.

"There are no hard and fast rules for this," he added.

He cited an example of the varying views on different levels, which can result in bigger jumps in the value of a flat.

The lack of clear rules for valuers also mean that valuation becomes subjective, Mr Tan conceded. "There is no one 'correct' price when it comes to valuation. It's not a matter of right or wrong," said Mr Tan.

"But the difference in the values should not be too great, especially when there are other previous transactions for reference," he added.