Suncorp Valuations is thrilled to be attending the 2024 AB MUNIS Public Risk Conference. Our Risk Management Manager, Shamair Turner, will be leading a presentation on “Loss Control” on April 18th at 2:15 pm.
Don’t miss this opportunity to network with risk professionals. We look forward to seeing you there!
If you haven’t registered for the conference yet, there’s still time. Visit here for more details.
Suncorp Valuations is excited to share that we will be attending the 2024 MIABC Risk Management conference in Vancouver. Our President, Tom Gardiner, will be attending the conference alongside our Business Development Manager, Devin Baker, who will be presenting on April 3rd from 1:00-2:00 pm on the topic of “Capital Asset Planning –Where to Begin?”
We hope to see everyone at this spectacular event!
If you haven’t registered for the conference yet, there’s still time. Visit here for more details.
At Suncorp, our Brand Promise is On-time, Credible and Professional. We built our reputation on consistently delivering this Brand Promise.
At least until COVID arrived. During the initial COVID recovery phase (2020-2021) there was a significant increase in demand for insurance appraisals which overwhelmed the global appraisal industry. In fact, many industries other than appraisal services were overwhelmed by the new realities as the world emerged from the first few COVID years.
Demand for appraisal services increased so quickly that appraisal firms struggled to adjust. This sharply increased demand changed the dynamic of the “triple constraints” which all businesses face: “Quality, Speed, Price; You can have two, but not all three.”
Appraisal firms faced a very difficult choice. Either cut back on quality to deliver appraisals on time. Or maintain quality levels, but at the cost of missing some deadlines.
The apparent solution to all this was to hire. However, in our industry it takes years for an individual to complete the proper training and gain adequate experience to become an appraiser with the skills needed to produce services at the quality levels that Suncorp is known as a top-tier firm. Exacerbating this problem is that during the 2021-2023 period there was a global skilled labour shortage in all industries including appraisal, which made recruitment very difficult.
Many appraisal firms chose the fast and cheap route to capture additional market share. And those firms grew. Of course, that approach comes at a cost, mostly to their clients. Those firms chose to cut corners on data acquisition and research, and to cut costs such as no longer purchasing E&O insurance. The result is appraisal services delivered on time, but predictably those appraisals are of much lower reliability, and often have no back-up E&O insurance to protect clients in the case of errors.
At Suncorp we chose a different path, albeit more difficult and challenging. We chose to take the high road and maintain quality. We chose to not cut corners or take shortcuts. This is true to the “…credible and professional…” elements of our Brand Promise. However, we struggled to deliver on time.
How did we implement this strategy? We initiated a three-point plan:
1) Maintain and enhance research, analysis, and quality
An appraisal estimate is only as good as the quality of the data and analysis it is based on. During recent years the professional team at Suncorp continued to employ tried-and-true data acquisition, verification, and analysis methodology. During the 2021-2023 period, we observed very dysfunctional markets including deflationary and inflationary periods, increasing our research efforts. All this resulted in appraisal estimates that were and are accurate, credible, and reliable.
2) Aggressively recruit and train
During the 2021-2023 period Suncorp’s HR team implemented an aggressive strategy to recruit, screen and onboard professional staff at all levels. Although there was significant labour market competition, Suncorp’s reputation in the industry as an employer-of-choice meant that we had the upper hand. We successfully attracted many high-quality individuals to our team and virtually doubled our staff count within our Professional Services divisions. We also successfully increased our roster of qualified and experienced subcontractors who are located across the globe.
3) Implement meaningful internal process improvements
Although process improvement is an ongoing endeavor, we completed a deep dive into all internal procedures and processes to eliminate redundancies and red tape. We have also made a significant investment in IT equipment, software, and training. Suncorp continues with these significant investments during the 2024-2025 period to increase efficiency and throughput.
As an additional example, in 2022 Suncorp opened an office in Hyderabad India which his staffed by a team of skilled and experienced appraisers. Many of our appraisal files now never “sleep” in that someone is always working on the file 24 hours/day. This model also increases efficiency and throughput, helping us to better deliver on time.
During the past few years Suncorp admittedly struggled with On-Time delivery as we adjusted to the new business realities. However, we take comfort in knowing that the services we delivered during that period are of high quality and reliability.
Due to our successful three-point strategy, Suncorp’s on-time delivery improved greatly during 2023. Suncorp is now back to consistently delivering on our full Brand Promise.
This article was written by our Senior Managing Director – Bharat Kanodia, ASA and published on ASA Newsroom.
(Reprinted with permission from the American Society of Appraisers).
The machinery and equipment market is undergoing rapid transformation fueled by technological advancements, changing consumer preferences, and global economic shifts. As industries strive to stay competitive and embrace innovation, the need for accurate and reliable machinery and equipment appraisal has never been more crucial. This growing demand has created a unique opportunity for qualified appraisers to play a pivotal role in assessing the value of these assets. In this article, I will explore the trends driving this demand and where aspiring appraisers can find exciting job opportunities.
Technological Advancements
The machinery and equipment market is witnessing a surge in technological innovations. From smart manufacturing tools to advanced robotics, companies are investing heavily in cutting-edge equipment to improve efficiency and productivity. As these technologies become more sophisticated, the need for appraisers who understand their value and functionality becomes paramount. Appraisers must possess the knowledge and expertise to accurately assess the worth of these advanced assets.
Globalization and Market Dynamics
Globalization has led to increased cross-border transactions and collaborations, impacting the machinery and equipment market. As businesses expand internationally, the demand for qualified appraisers with a deep understanding of global market dynamics has risen. Appraisers must be adept at assessing the value of machinery and equipment in different economic contexts, taking into account regional variations and market trends.
Sustainability and Environmental Considerations
With a growing emphasis on sustainability and environmental responsibility, industries are increasingly investing in eco-friendly machinery and equipment. Appraisers must be well-versed in evaluating the environmental impact of assets, including their energy efficiency, carbon footprint, and compliance with regulatory standards. This trend highlights the need for appraisers who can provide comprehensive assessments that go beyond traditional valuation metrics.
Data Analytics and Artificial Intelligence
The integration of data analytics and artificial intelligence (AI) in the machinery and equipment sector is reshaping the appraisal process. Appraisers must leverage these technologies to analyze vast amounts of data and derive valuable insights. The ability to interpret data trends and understand how AI impacts the valuation of assets is becoming a critical skill for appraisers in this evolving landscape.
Industry-Specific Expertise
As machinery and equipment become more specialized across various industries, appraisers with niche expertise are in high demand. Whether it’s healthcare, manufacturing, agriculture, or logistics, appraisers need to understand the unique challenges and opportunities within specific sectors. Industry-specific knowledge ensures a more accurate and tailored appraisal, contributing to better decision-making for businesses.
Where to Find Jobs?
For those seeking a career as a qualified machinery and equipment appraiser, various avenues offer promising job opportunities:
Conclusion
The machinery and equipment market’s evolution is creating a surge in demand for qualified appraisers who can navigate the complexities of this dynamic landscape. Aspiring appraisers should focus on acquiring industry-specific knowledge, technological skills, and a global perspective to thrive in this burgeoning field. Job opportunities can be found through professional organizations, online platforms, specialized firms, and networking events, offering a multitude of paths for individuals looking to embark on a rewarding career in machinery and equipment appraisal. Already a qualified professional and exploring job opportunities? We’d love to touch base with you about new openings at our firm.
At Suncorp Valuations, we strive to provide valuable insights to our clients when we see court rulings that provide astute guidance relative to valuation. In the re-print of an article by James Cook at Gardiner Roberts LLP we see the importance of qualified advice.
For more information please contact: James Cook at 416.865.6628 or jcook@grllp.com
(This blog is provided for educational purposes only, and does not necessarily reflect the views of Gardiner Roberts LLP).
Real estate agents are often asked by clients to assess the value of a property. There is a significant difference between an opinion of value as determined by an agent and a formal appraisal prepared by a certified appraiser, including the time and costs involved. Depending on the circumstances, a client may need to obtain a more expensive appraisal rather than relying on a rough ballpark estimate provided by a real estate agent.
In Spencer v. Sutton-Harrison, 2023 MBKB 16 (CanLII), the plaintiff and her husband owned six parcels of farmland ranging in size from 46 to 160 acres. The plaintiff telephoned her long-time real estate agent in March 2018 and informed him that she and her husband were separating and that she needed to obtain the value for the six parcels of land.
The agent explained that there is a difference between an opinion of value, which might cost about $300, and a formal appraisal which would cost between $2,000 to $4,000. The plaintiff asked the agent to prepare an opinion of value in respect of six parcels of land.
In April 2018, the agent prepared an opinion of value which valued each of the six parcels ranging between $200,000 and $465,000, for a total value of approximately $1.4 million. In doing so, he looked at the assessed values of the six parcels and perhaps one recent sale of local farmland. The agent emailed the opinion of value to the plaintiff’s family law lawyer who was handling her separation.
The plaintiff then entered into a separation agreement with her husband. The separation agreement listed the six parcels and said that the two spouses owned the parcels as joint tenants. It mentioned that the plaintiff’s husband would pay her an “equalization payment” and that her interest in the six parcels was “taken into consideration when reaching agreement on the quantum of equalization payment due and owing” to the plaintiff.
In November 2018, the plaintiff advised her agent that two of the six parcels, which had been assessed at a combined value of $360,000, were listed for sale. The plaintiff subsequently asked her agent to prepare a further opinion of value of the two parcels.
The agent’s opinion was that the combined value of the two parcels was between $570,000 and $595,000 (up from $360,000 in April 2018). The agent emailed a copy to the plaintiff’s family lawyer in January 2019.
The two parcels were sold in February 2019 for $600,000.
The plaintiff came to feel that the agent’s opinion of value was much too low and she sued the agent and his brokerage for negligence.
In the course of the litigation, the plaintiff hired a certified appraiser who reviewed the agent’s opinion of value, produced a formal appraisal (which included photos, maps, charts and other materials), and concluded that the agent’s opinion was deficient in various ways. The appraiser felt that the six parcels were worth over $1.8 million.
At trial, the plaintiff argued that her real estate agent had violated the standard of care required by the Realtor Code of The Canadian Real Estate Association (the “Code”). In particular, she argued that he failed to enter into a written agreement with her as required by the Code; that he failed to deal fairly with her as a client; and that the Code required him to disclose all information, which he failed to do.
The plaintiff argued that due to the defendants’ breaches of the Code she had suffered damages in the amount of half of the difference between the OOV ($1.4 million) and the formal appraisal (over $1.8 million). The “half” was based on the principle that family property is generally divided equally between former spouses/partners after separation.
In the trial judge’s view, however, the plaintiff got exactly what she paid for. Notwithstanding that she was neither a realtor nor an appraiser, she should be treated as a reasonable consumer. A reasonable consumer would have realized that a $3,000 formal appraisal would be substantially different from a $300 opinion of value, and that they would have governed themselves accordingly. For the low price of $300, the plaintiff got a quick and rough ballpark set of estimated land values. Even if the values were at the low end of the ballpark, that did not constitute negligence.
The agent’s evidence was that he told the plaintiff that, as a realtor, he could only provide an opinion of value and that he was not qualified as an appraiser. He said that he made the plaintiff aware of the difference in cost between an opinion of value and a full-blown appraisal, which would likely cost several thousand dollars. His evidence was that the plaintiff did not have or want to spend that amount of money for an appraisal. His text messages to the plaintiff confirmed that he was providing an “opinion of value in today’s market”. The opinion of value itself was a short document on the brokerage’s letterhead and marked: “RE: Land opinion of value”.
The plaintiff confirmed during her examination that the agent had said that she would probably be better off getting an appraisal. While she denied understanding the different amount of time that would be involved in preparing an opinion of value and an appraisal, she reluctantly admitted that she was at least aware there was a price difference between the two types of reports and that an appraisal would be prepared by a person with “more experience and more qualifications”.
While the Code is a useful tool in determining what a reasonable realtor should do, it is not a codification of the law of negligence but rather could fairly be described as “a summary of best practices for diligent Canadian realtors”.
In the circumstances, the plaintiff failed to establish that the agent’s allegedly negligent conduct was the cause of any damages. She failed to show a connection between the opinion of value and what she had obtained as result of the separation agreement with her husband. The portions of the separation agreement introduced as evidence at trial mentioned an equalization payment, but did not mention the amount of that payment. Even though all realtors have a duty of care to their clients, and the standard of care is that of a reasonable realtor, the tort of negligence also requires damages: “there is no breach without proof of consequential damages.”
Further, prior cases had shown that there may be legitimate differences, even large differences, even between formal appraisals since property appraisal is not an exact science: Royal Bank of Canada v Westech Appraisal Services Ltd., 2018 BCSC 473, at para 163. The fact that a plaintiff can obtain another appraisal much higher than the appraisal provided by a defendant does not mean that the defendant was negligent and does not mean that the quantum of damages is the difference between the two appraisals. The plaintiff had an independent family lawyer and could have challenged the values before agreeing to the separation agreement.
The plaintiff’s claim for negligence was therefore dismissed.
At the end of the day, as noted by the trial judge, one pays more for services of higher quality: “In a capitalist society, it is accepted that one generally gets what one pays for”. Given that the plaintiff was aware of the huge price difference between an opinion of value and an appraisal, a reasonable consumer in her place would have realized that a $300 opinion of value would be a rough “ballpark” estimate of the values of the six parcels and that for an extra few thousand dollars, she could have obtained a much more precise estimate in the form of an appraisal from a certified appraiser. She would have been better off had she done so rather than suing her agent for negligence.
For more information please contact:
James Cook at 416.865.6628 or jcook@grllp.com
(This blog is provided for educational purposes only, and does not necessarily reflect the views of Gardiner Roberts LLP).