I REFER to Mr Patrick Tan's letter, 'Flat valuation went from $360,000 to $373,000' (ST, Aug 3).
We would like to explain the statement often given by valuers, that 'the valuations of HDB flats are based on valuation principles and market practices, just like private properties. Recent transacted prices of similar resale flats in the vicinity are adopted as market evidence'.
The market value of an apartment depends on a number of factors, among which are floor level, orientation and location. An independent valuer does not just base his valuation on the highest or lowest comparable sales because these prices could be due to a host of reasons, including prices paid by special purchasers or the buyers' subjective appraisal of improvements within a flat.
We understand that sellers often feel that their apartments are better than those transacted in the market. Therefore, the services of an independent valuer to give a more objective assessment are required. The independent valuer will look objectively at sales evidence that is available to him.
In appealing for a valuation review, Mr Tan had sent our valuers a few letters and he had never referred to any transaction at $389,000, except in his letter to the Forum. After his letter was published, we checked our records and found it to be an exceedingly high sale recorded in April 2005.
This evidence could not be considered as it was more than a year old and an outlier, that is, a transaction which falls outside the range of usual market prices which are borne out by a number of other transactions of similar properties in the same location.
Our first review was carried out at a time when there were no recent comparable sales within his block. The second review was done when, coincidentally, a new sale was recorded in his block. Based on this new evidence, we reviewed our valuation accordingly.
In his appeal, Mr Tan indicated his dissatisfaction as he needed a higher valuation to persuade his buyer to pay more. We have explained to him that our valuations are for mortgage loans and withdrawal of CPF funds and are not intended for price negotiations.
We have suggested to Mr Tan that he could refer the matter to the Singapore Institute of Surveyors and Valuers for an independent assessment. He has yet to take up our suggestion.
Christopher Tang Kok Kong
Director
HBA Property Consultants Pte Ltd
