In the world of professional valuation services we often hear the idiom that “you get what you pay for”. Usually the context behind this is “we offer three types of service”, namely:
- Credible and Reliable;
- Cheap; or
But you can only pick two:
- Credible and reliable and cheap will not be fast;
- Credible and reliable and fast will not be cheap; or
- Cheap and fast will not be credible and reliable.
At Suncorp Valuations we emphasize credible and reliable reporting that is completed on time and at a fair price, in accordance with our brand promise!
Those of you who use our services know that Suncorp always prepares and delivers a proposal which details our current understanding of the services to be conducted. We do this in order to establish the appraisal’s intended use, scope of service, our professional fee, and the required timing of our deliverables.
Recently, a new client to Suncorp advised us that they had obtained three independent proposals from suppliers who they thought were credible and reliable. In vetting these proposals, our client asked if we could help them better understand the variances between them and explain why our professional fee was the highest.
The first variance we identified was related to the “credible and reliable” premise:
Clearly two of the firms were proposing to utilize staff who had not obtained a designation from a recognized and regulated Appraisal Society. Each and every report that Suncorp Valuations prepares is reviewed and signed off on by one of our permanent, full-time appraisers, who have obtained an Accredited Senior Appraiser designation from one of the following recognized Appraisal Societies:
- ASA (Accredited Senior Appraiser – American Society of Appraisers – www.appraisers.org)
- MRICS (Chartered Member, Royal Institution of Chartered Surveyors – www.rics.org)
- AACI (Accredited Appraiser Canadian Institute – www.aicanada.ca)
- MAI (Member Appraisal Institute – www.appraisalinstitute.org)
These designations have rigorous requirements with respect to formalized training and articling experience which must be adhered to before a Senior designation within each Society is granted.
The second variance we identified was related to the “on time” premise:
Our proposal was the only one that addressed the timing of the deliverables to align with the intended use of the report (i.e. to assist the insurance broker with the placement of property insurance). At Suncorp we want to be timely in our reporting to meet our client’s requirements; not fast, but appropriately timed!
The third variance we identified related to disclaimers within our competitor’s proposals:
These disclaimers limited the competitor’s liability in the event that their final cost estimates were not adequate to replace the property in the event of a significant loss.
Suncorp Valuations believes that by combining appropriate liability insurance along with proper appraisal accreditation, this affords our firm the ability to withstand scrutiny of our value conclusions. As a prudent company, having been in business for over 60 years , our professional fees need to reflect the cost of being able to provide both services. Accordingly, our professional fees are not always “the cheapest” option. We are happy to provide clients with a copy of our “Certificate of Insurance” which outlines the coverage we have in place to protect them, in the unlikely event that there is an error in our final cost estimate.
In selecting your valuation services provider, we encourage you to conduct an “apples to apples” comparison to ensure your interests are represented appropriately.
Be wary of companies that limit their liability to a multiple of the fees paid for the service, along with those who do not utilize staff members with Senior Appraiser designations from one of the above-noted recognized Appraisal Societies.
To sum things up, “cheap and fast” is not always the correct answer, and to quote a man who has a proven record of accomplishment in measuring risk:
“Price is what you pay; value is what you get.”
— Warren Buffett