Any deal involving property, be it residential or commercial, revolves around valuers – understanding their role within a transaction and the way in which they operate is key to getting the most from any agreement.

B&C spoke to Karen Bennett, Head of Sales and Marketing of, Commercial Mortgages, at Shawbrook Bank, to find out more about how to best approach valuations…

Valuers play a crucial role in any investment deal, for both lenders and brokers alike. Whilst valuers will often take a different view to brokers on the pricing of a property, there are some useful steps that brokers can take to help better predict where they will land on price.

The valuations market is one of the sectors probably most affected by the economic downturn, with valuers understandably nervous about potential miscalculations. It would be fair to say that many have adopted a ‘belt and braces’ approach by only accepting instructions from lenders directly.

There are no hard and fast rules to gauge where a valuer will fall on price, but there are some simple steps brokers can take to better understand their requirements. Knowing this information will go a long way in helping to provide clients with advice to ensure the valuation figures gives them the results they expect.

Getting to grips with the lenders’ instructions and approach is vital, as valuers follow this to the letter. If you understand a funder’s approach, it is likely that you’ll get a clearer view of how a valuer carries out his or her business.

Take multi-units - houses converted into separate flats, blocks of flats or a street of mews houses - for example; does your lender want a residential valuation or a commercial valuation, and do they value multi-units as one block or separate values?

At Shawbrook, we will work from the aggregate value (each individual unit value added together) of up to five units. We will then present this to the valuer, asking them to comment on marketability, and are likely to limit our lending against the vacant possession figure we are given.

Being aware of the condition of a property is also very important. If a broker is local to the client, it is always wise to visit the property yourself and assess its condition and the surrounding area and buildings. If you are not local, you might consider using Google applications like Street View to get some basic insight into the property and surrounding area.

Being aware of the purchase and rental demand in a specific area is another sure-fire way towards ensuring expectations are managed. Brokers should invest the time to speak to local agents where possible in order to understand their thoughts on the market. Is there an excess or shortage of the type of property your client focuses on in your area?

Brokers should also look to take advantage of desktop valuations wherever possible. While, in the main, brokers cannot instruct lenders directly, most lenders will publicise their valuer panel, giving brokers the opportunity to call the valuation team and get a professional opinion or guide to the property’s value. It is important to note, however, that most lenders will not then allow brokers or clients to dictate which of the panel the full valuation instruction should go to.

If a short term or refurbishment loan is being used for the property, it is always wise to check market comparisons to gauge what level the client expects the rental and property value to be at once all work is completed. Brokers should aim to stay close to the case and ensure the valuer is aware of the schedule and cost of the works, alongside any time constraints that tend to come with these types of applications.

As with all deals, we often find preparation is key; following these simple steps will really help to better understand where valuers will land on price.