Short answer? No. There will always be a place for small Valuations firms, but with the astronomical cost of PI Insurances for small and large Valuation agencies alike, lowered Residential Valuation fees from some of the major Banks and the move towards streamlined valuation systems, it is hardly surprising that many small Valuation agencies are considering their options.
When we read the article on Opteon featured on the Australian Financial Review (click here) noting Opteon’s intent and success at buying smaller franchises, our immediate thought was ‘okay, so business as usual’.
Working with many agencies, we’ve seen these transactions and facilitated a few of our own. Whilst often the immediate reaction people have to bigger firms buying franchises is negative, the results we have seen for most of the smaller firms acquired have been quite positive.
Many have retained their structure, but benefit from the umbrella of the larger firm from lowered Insurances and access to both wider contacts and the use of their technologies.
This last point of technologies is very important. From a Recruitment point of view, one of the biggest attracting features of a valuations firm outside of its culture, is the technology it uses. With sometimes high targets / thresholds to achieve, Valuers want to know that the technologies they’ll be engaging with are as streamlined as possible.
The problem for many smaller firms is that these technologies can be expensive to implement. Many of the major Valuations firms have completed redesigned their systems as proprietary tech, integrating easily with Valex etc, making them attractive employer prospects for candidates.
An acquisition however will never suit everyone and sometimes there are winners and losers. The advantage smaller valuations firms interested in joining ranks with the big firms have is that numerous companies currently have an active acquisition focus.
This means that if a firm decides it needs to go down the path of selling, there is choice – a valuable factor in ensuring the best match between culture and ideals.