Allowing real estate agents to evaluate properties could have worrying repercussions on the entire property market, according to the head of the chamber of architects.
Kamra Tal-Periti president Chris Mintoff yesterday raised concerns over references to “property valuation” training in a government White Paper on real estate agents which proposes offering mandatory courses.
Mr Mintoff, himself an architect, said any references to property sellers acting as professionals who value property should be disallowed.
“This creates a conflict of interest which only the agent stands to gain from. The client should be encouraged to receive impartial third-party advice from an architect of his choosing who has no interest in the property being sold or not,” he said.
The White Paper, published in January, suggests estate agents should require a licence to operate and that their work be regulated by a new authority.
The Real Estate Agents Authority would administer the licensing regime, keep a register of the licensees, develop rules of practice, set fees, develop consumer information, set professional standards for estate agents and investigate reports of offences.
It would prescribe training courses, which, among other things, would cover theory and framework of valuation methods, principles of investment pricing and valuation appraisals.
Mr Mintoff said some agents may be experienced in valuing certain types of properties, but this should not allow them in any way to give guidance to sellers, especially since they would receive a percentage of the final sale price as commission.
Mr Mintoff also raised concerns over architects’ complaints of having frequently encountered agents undervaluing properties in order to expedite the selling process.
Facilitating agents’ evaluation practice “invited problems, at the expense of the consumer and the market as a whole”, he said.
The training, Mr Mintoff said, also jarred with the current legal framework, where local banks, the Malta Financial Services Authority and the State’s tax departments did not accept valuations from agents.
Mr Mintoff added that the advertisement of “free valuations” by agents often seen on social media should be disallowed.
“These services are used as lures to attract vulnerable or financially burdened individuals into entering commitments which end up costing them much more,” Mr Mintoff said.
The Times of Malta will this morning be organising a business breakfast on the real estate agent consultation document.
The fully booked event, at the InterContinental Hotel, will include a panel debate between the Malta Developers Association, the Federation of Real Estate Agents and a sensar (traditional property broker). The breakfast will be chaired by Business Insider editor Vanessa Macdonald.