Hi everyone,
A newbie first home owner here! Just wanted to firstly say thanks for all the brilliant advice and discussion on this forum. I have learned so much just in the last few weeks since I have been coming on.
My partner and I have just signed a contract of sale for our first home (so exciting!) We have had a building/pest inspection done which all came back great, now we're just waiting to receive unconditional approval. Our LVR is at 88%. The valuation is taking place in the next couple of days.
I'm feeling concerned about the possibility of a low valuation coming back, and subsequently our finance being declined.
I suspect that we may have offered an amount that is on the high end of what the property is worth. Probably because of the first home owner flurry. The asking price on the ad was $255+ but it became clear pretty quickly that this was just a low figure that the REA was using to drum up loads of interest. When we expressed interest, the REA was adamant that offers would need to be much higher, because there was such a high level of interest. I consulted with a number of friends of mine who are REAs and they agreed that the property was probably more likely to be more worth somewhere between $280K-$315K. The amount that we signed the contract for was $313,500. We love the property and were prepared to pay a bit extra to get it. There were multiple offers and the REA was adamant that we would only be able to submit one offer. The property is worth this much to us.....but I'm not sure that the valuation will come back as such...
My questions are, in the case of a low valuation...
1. Is the amount that the valuation needs to be equal to/greater than the sale price (in our case $313,500) or the loan amount (in our case $278K)?
2. If there is a 'small' discrepancy (say $5K-$10K) would the lender require you to contribute that extra amount in order to have the finance approved, or is that only when there is a major difference between the valuation amount and what you have signed the contract for?
3. Can you re-negotiate a price with the vendor to be the amount that the property is valued at, if otherwise your finance will be declined? The vendor seems very keen for our finance to be approved ASAP, as they are about to offer on another property.
4. Do you think that I am just being over-anxious, or do valuations in this price range often come back lower than expected?
Sorry about the ramble, thanks in advance!!
A newbie first home owner here! Just wanted to firstly say thanks for all the brilliant advice and discussion on this forum. I have learned so much just in the last few weeks since I have been coming on.
My partner and I have just signed a contract of sale for our first home (so exciting!) We have had a building/pest inspection done which all came back great, now we're just waiting to receive unconditional approval. Our LVR is at 88%. The valuation is taking place in the next couple of days.
I'm feeling concerned about the possibility of a low valuation coming back, and subsequently our finance being declined.
I suspect that we may have offered an amount that is on the high end of what the property is worth. Probably because of the first home owner flurry. The asking price on the ad was $255+ but it became clear pretty quickly that this was just a low figure that the REA was using to drum up loads of interest. When we expressed interest, the REA was adamant that offers would need to be much higher, because there was such a high level of interest. I consulted with a number of friends of mine who are REAs and they agreed that the property was probably more likely to be more worth somewhere between $280K-$315K. The amount that we signed the contract for was $313,500. We love the property and were prepared to pay a bit extra to get it. There were multiple offers and the REA was adamant that we would only be able to submit one offer. The property is worth this much to us.....but I'm not sure that the valuation will come back as such...
My questions are, in the case of a low valuation...
1. Is the amount that the valuation needs to be equal to/greater than the sale price (in our case $313,500) or the loan amount (in our case $278K)?
2. If there is a 'small' discrepancy (say $5K-$10K) would the lender require you to contribute that extra amount in order to have the finance approved, or is that only when there is a major difference between the valuation amount and what you have signed the contract for?
3. Can you re-negotiate a price with the vendor to be the amount that the property is valued at, if otherwise your finance will be declined? The vendor seems very keen for our finance to be approved ASAP, as they are about to offer on another property.
4. Do you think that I am just being over-anxious, or do valuations in this price range often come back lower than expected?
Sorry about the ramble, thanks in advance!!
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