Bank to Value house & flat?

Hi Guys,

How do I get the bank valuer to place real value on the stand alone 60sqm flat thats not attached to my recently renovated IP.

Last valuation was pretty ordinary and didn't seem to take into account either the monetary value for the flat or the actual land/build cost of the flat.
There's been a great jump in local values + a recent reno I've done so its time to revalue and go again.

Surely a granny flat makes a difference for a valuer? compared to a house without?

Anyone have any tips on encouraging the valuer upwards ?
 
Capital Value or Income Value

Unlike commercial property, increasing the rent return by creating a granny flat, does not necessarily increase the capital value of a residential property. However, the increased cash flow does increase the value of the property for the investor; as your income has gone up your ability to leverage that cash flow & further borrow from the lender has also increased.

A second valuation may be appropriate. If you do this check with your lender to find out who they use for valuations, as banks have a list of preferred valuers. However I suspect the value created here is not capital value but cash flow value.

Philip
 
Surely a granny flat makes a difference for a valuer? compared to a house without?
As Philip says - maybe / maybe not. What you can do though, is this: If your house was originally a 3brm, 1bath, 1 car and you added a 1brm, 1 bath granny flat - then you can start drawing comparables from 4brm, 2bath, 1 car properties. These generally do sell for more in my experience.


Anyone have any tips on encouraging the valuer upwards ?
Yes, - don't. They can smell the fear and they don't like to be manipulated either. They have a professional job to do and they are responsible if a claim is made on their PI.
However, nothing wrong with doing some research and coming up with 6 directly comparable, recent sales on a single A4 sheet and asking the valuer politely if these were comparable "in his opinion". :D

All the best with the reval.
 
If it is not on a separate title then it may or may not add too much extra value.

As mentioned it becomes mre comparable to a larger house.

As also mentioned it may be more valuable to the investor, but that is not the bulk of the market of potential purchasers of residential properties. If you want the property valued on it's cashflow then it usually becomes a commercial style valuation .. good luck borrowing on residential terms.

Every time someone objects to a valuation figure I have put on a property, I tell them to prove it to me by providing more relevant sales evidence. ... very rarely do I move valuation figures as a result of this .. usually it confirms my figure when the sale is anaylised .. I think I have moved on one valuation so far in the past year .. and that is in about 1500 valuations.

cheers

RightValue
 
Yes, - don't. They can smell the fear and they don't like to be manipulated either. They have a professional job to do and they are responsible if a claim is made on their PI.
l.

Too true.

It reminds me of one I did a couple of weeks ago .. a very anxious owner needing a "good figure" she told me. The owners estimate of value on the job sheet said $260k .. I asked her how much she thought the property was worth, she said she had no idea ..So I asked what she need the val to be at (brokers invariablly increase the owners estimate .. which is often accurate .. by a fair bit) and she tells me $230k.

I laughed and told her not to worry ... the house valued up at $300k

cheers

RightValue

PS; I never take any notice of the owners estimate .. it is usually inflated by either the broker or the owner or sometimes by both.. playing the game ...
 
this is how i do comparable valuations , not my profesion though,

i look at the UCV eg 200k , and then i calculate the floor area of the building, say 100m2 and in very average condition, being 1k m2 x 100 = 100k.
but if the home was in new condition i would calc like 1.5k per m2 x 100k = 150k.

if the property was best burb and best money could buy then 2k per m2 x 100 = 200k
and then i add the ucv back,
SOoo! 200 land (UCV) and 100m2 at $1,300 m2 =$130,000 then the seperate flat 30m2 @ $1,300 = $39,000
land = $200k
house= $130k
unit = $39k
total=$369,000 ;)
 
this is how i do comparable valuations , not my profesion though,

i look at the UCV eg 200k , and then i calculate the floor area of the building, say 100m2 and in very average condition, being 1k m2 x 100 = 100k.
but if the home was in new condition i would calc like 1.5k per m2 x 100k = 150k.

if the property was best burb and best money could buy then 2k per m2 x 100 = 200k
and then i add the ucv back,
SOoo! 200 land (UCV) and 100m2 at $1,300 m2 =$130,000 then the seperate flat 30m2 @ $1,300 = $39,000
land = $200k
house= $130k
unit = $39k
total=$369,000 ;)

craigb,

ONLY a builder would come up with a valuation method like that :p
However, what you have described is the 'summation' method sometimes used by valuers when there are no comparable sales to go off.

RightValue would be able to tell you more.;)
 
Actually Craig, the basic methodology is sound and is the method I use to analyse sales evidence to arrive at rates to summate a value for a property. The rates you use look out by a fair bit and there are a few more variables to consider, but as I said the basic methodology is sound.

cheers

RightValue
 
Independent valuation... still worthwhile?

Just wondering peoples thoughts on whether there is still an advantage in paying for a valuation yourself through the valuer your bank will use and then hitting the bank up for a loan based on that valuation.

ie. will the valuation you pay for be any higher than the one the bank will pay for with the same valuer?
 
When we had out house in Gladstone valued in Dec last year, they asked me the reason for the valuation, I said Capital Gains Tax as it was turning into a IP.

So I think they must have different formulas if it is for a bank valuation.
 
When we had out house in Gladstone valued in Dec last year, they asked me the reason for the valuation, I said Capital Gains Tax as it was turning into a IP.

So I think they must have different formulas if it is for a bank valuation.

you think wrong

the purpose of a valuation must be stated in the report.

If we do a valuation for a purpose other than mortgage security different clauses need to be inserted or deleted.

A property only has one market value - generally.

cheers

RightValue
 
what are the other variables ?? do tell :D

to many to list, many almost never come into play, but may need to be considered.

even in the variables used there are variations in to variables.

there are courses in valuations run by universities where over the 3 years you should learn most of the theory and the variables.... but there is nothing like experience for learning how it really works.

I myself am thinking of developing and running a course for investors, a large component of which will be understanding the drivers to property values, how to analyse property values and how to work out what a property is worth.

just gotta find a spare couple of months to write it.

cheers

RightValue
 
Just wondering peoples thoughts on whether there is still an advantage in paying for a valuation yourself through the valuer your bank will use and then hitting the bank up for a loan based on that valuation.

ie. will the valuation you pay for be any higher than the one the bank will pay for with the same valuer?

Rightvalue, are you able to answer this. I am also interested in a response to this question?

Cheers
Daniel


EDIT: eekk old post, sorry guys. Was researching some old threads!
 
Hi DR

I will butt in here ....................diff take though

In todays environment, where dumb machines with zero fuzzy logic make decisions on your creditworthiness using models that have a high relinace on "number of credit enquiries", its often worth knowing if the val from the valuer reflexts your expectations or no.

Putting in an app to get a val is old skool..........................and to a large extent is done to get you "off the market".

ta
rolf
 
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