Much coverage in the property media has recently been given to the difficulties experienced by would-be home buyers in obtaining bonds. However, says Gregory Senftleben, Rawson Properties franchisee for the Umhlanga precinct, in his experience another problem almost as frequently encountered is the valuation of property by the banks vs market value.

"We have just recently," he said, "had a case in which we had an offer on a beachfront home at R2,1 million – but the bank valued it at R1,8 million. When we asked the bank about this, it became clear that their valuation was based on inaccurate information and that no onsite valuation had been done. After providing them with correct information and insisting that an onsite valuation be carried out, they finally raised their value to R1,9 million. This helped but did not eliminate the problem because there was still a substantial discrepancy between our valuation and that of the bank – which, understandably, caused the buyer to lose confidence in the property and consider withdrawing his offer.

"We were, however, able to convince him of the accuracy of our valuation by bringing in an independent valuer – whose figure was similar to ours – and then forwarding this written valuation to the client and the bank. This incident," said Sentfleben, "is by no means the only one he has had to deal with and although bringing in another valuer is an effective tactic, it has to be said that it is also an expensive one. Furthermore, the disagreements on valuations can, and in this case did, cause his staff and the client to go through an emotional rollercoaster ride for some weeks. Fortunately, however, in this case the purchaser was willing and able to cover the differential by increasing his deposit."

"This incident highlights the true nature of the problem, namely that banks are in many cases over-cautious in the implementation of their lending criteria for bond applicants and are, therefore, not willing to accept that the market has adjusted itself. Banks need to realize that buyers today inform themselves very adequately concerning property prices and, when an offer is made, it is seldom done in ignorance but only after careful comparison of the properties available in the marketplace. Offers are, therefore, truly 'market-related' in every sense."