Irish Auctioneers and NAMA Valuations

Kawabata

I read in 'The Irish Times' last week that Irish auctioneers have been applying for work as valuers for NAMA, if and when it gets up and going.

I had understood some time ago that the Government was going to deliberately avoid using Irish auctioneers, on the reasonable basis that there was too much conflict of interest between being a NAMA valuer and auctioneers' days jobs as floggers of property. I remember quite a few irate opinion pieces from property vested interests about this in the very same 'The Irish Times'.

Has the Government position changed or did I misunderstand something along the same? Notwithstanding any appeals to 'professional conduct' by Irish auctioneers, isn't there simply going to be too great a temptation for Irish auctioneers to look on the rosy side of property and site valuation?

jimmycrackcorm

So kawabata, are you completely unable to do your own job even if you have expertise and are being paid to provide a service regardless of there being any potential non-personal profit.

Kawabata

With respect, I thin you're slightly missing the point. It's not a question of whether the auctioneer is capable of acting impartially for NAMA, it's a question whether they'll actually do so.

The day job of auctioneers is to sell property, on which they make their profit usually as a percentage of the sale price. The higher the sale price, the more the profit. And nothing wrong with that!

For auctioneers who get the NAMA valuation gig, using a valuation formulation currently under preparation, they'll presumably be required to (i) establish 'current market value' and (ii) determine 'long-term economic value', which must be greater than the current market value. I have no idea what checks and balances will be incorporated, if any, into such valuations.

Given that auctioneers and estate agents are not exactly well-known for their high ethical standards and given the amount of valuations that will have to be done, I think you'd wanted to be an awfully trusting or naive person to consider it unimaginable if self-interest doesn't creep into their valuations, given that NAMA will almost certainly be establishing an artificial floor under property prices in any event.

gurramok

And one of them has a tarnished record on their view of the market.
http://www.irishtimes.com/newspaper/ireland/2009/0902/1224253665122.html?via=mr

Seriously, we should have foreign valuers doing the valuing as Irish valuers were either dishonest or just stupid in their past valuations within the market.

ronbyrne2005

Theyll be getting backhanders to inflate the long term economic value as this would suit certain "investors". There should be new criminal offences to go along with NAMA so anyone found guilty of corruption in the process gets long sentences and massive fines.

EKRIUQ

Believe it or not valuations can be very complex and mathematical, I studied this book and this book for 2 years.

Plus a property can have 5 valuations and all correct maybe not right but correct in the right context

Agent J

Using people who were part of the problem to help solve the soultion is usually a bad idea.

Using people who get a % of the house price when performing their normal job to value the property is a really bad idea.

Using people who are now out of normal work and will continue to be until the property market is restored as well as having a vested interest in maintaining the previous status quo is definatly a bad idea.

Evidently we haven't been able to run our own affairs so bringing some outside oversight may be the best idea.

ronbyrne2005

Independent valuers should be brought in from abroad. Typical Irish solution to problem.

ronbyrne2005

EKRIUQ wrote: »

Believe it or not valuations can be very complex and mathematical, I studied this book and this book for 2 years.

Plus a property can have 5 valuations and all correct maybe not right but correct in the right context

Ultimately the value is what someone is willing to pay. Deapite the guff, there is money sitting out there waiting to buy investment property and homes at right price. NAMA is just a convoluted way of recpitalising the banks and a futile attempt to halt property crash.

Patrickof

The valuers that will be appointed only have to establish the "market Value" the Gov (Min of Finance) will set the Long Term Economc Value based on the current market value as a starting point.