Bank Valuation came under by 70k on Unit

[Mick C]

Sounds like your broker done what we call a Automated Valuation Model (AVM) - which normally comes in lower in this current market.

A full valuation is the way to go in most cases with CBA for purchases anyway.

I did one for Castle hill 2 weeks ago, the purchase price was $880,000 the CBA AVM came back as $720,000!! but the full val was fine.

P.s if the val is still coming in short for the full- consider using a lender that will waive the Valuation condition and accept the sale contract as is.

Cheers

 

[MightyWill]

Devil's advocate - have you done your due diligence?

Did it stack up at this price?

Is it a ppor or IP?

Is mortgage insurance an option (brokers)?

Are you over paying compared to other units?

The average unit in the complex goes for about 620 - 670k. These either are very low levels with no view or are in the middle of two units (not a corner one). I was actually going to pay 668 for another unit in block last week but pulled out and got my deposit back. The second bedroom was only 3 by 2.8. I thought to myself, the one being listed for 699 has two bedrooms which are 3.8 by 3.9, it is a north east corner (less common walls), the access to lift is much easier and convenient, it has a better view, lounge bigger (internal bigger by 10sqm). I said to myself, I would rather pay an extra 30-40K for something a lot better given that I am already spending over the 650K bracket. I'm thinking in 10 years, this would have more selling points to offer.

I'm trying to avoid LMI by putting down 20%. I save around 12k here.

 

[Jamie M]

P.s if the val is still coming in short for the full- consider using a lender that will waive the Valuation condition and accept the sale contract as is.

Cheers

Hey Mick

There's still usually some form of AVM that the lender carries out for these deals though right? ...and if the purchase price doesn't match their AVM they'll request an upfront. This seems to happen with St George quite a bit.

Cheers

Jamie

 

[mrsdawnrazor]

Subject to finance has pretty much NOTHING to do with pre-approvals.

Finance pre approved simply means they'll lend you money IF the propoerty stacks up etc.

Subject to finance means if the bank won't lend you money, your don't have to buy.

BIG difference Will.

The Y-man

+1

With no finance clause, if the bank wont lend - you still have to buy. Can you manage this?

 

[ZachAnSel]

+1

With no finance clause, if the bank wont lend - you still have to buy. Can you manage this?

This is the trap, you feel safe whenever you get pre-approval.
But pre-approval means nothing, misleading information.
Looks good because you afford to pay back the interest of the loan.

But doesn't mean you have pre-approval means lender guarantee you the money as Y-Man said..

 

[big unit]

im interested in the outcome?

 

[WattleIdo]

Me too. What's happened MightyWill?

 

[MightyWill]

Went to meet with the broker lastnight to sign final papers and to go through the loan. She said she got back the full valuation from CBA; I took a guess at 655. It came in at 650. I said that is about right. That is how much the average unit costs in the area. However, given that mine is north east corner with a good floor plan and view, etc, I paid more for it.

With my new provider, I get 0.98 off the variable rate but CBA was going to give me 1%.

In the days to come, all my cash will be drained from CBA into the new lenders account I created today. 30 plus years with CBA is about to go bye bye.

Did I mentioned that no valuation was done with new lender.

 

[RetireRich101]

sorry, you went with another lender that is not CBA?
and that lender lend you on purchase price with a full/desktop valuation?
which bank?

 

[Terry_w]

Went to meet with the broker lastnight to sign final papers and to go through the loan. She said she got back the full valuation from CBA; I took a guess at 655. It came in at 650. I said that is about right. That is how much the average unit costs in the area. However, given that mine is north east corner with a good floor plan and view, etc, I paid more for it.

With my new provider, I get 0.98 off the variable rate but CBA was going to give me 1%.

In the days to come, all my cash will be drained from CBA into the new lenders account I created today. 30 plus years with CBA is about to go bye bye.

Did I mentioned that no valuation was done with new lender.

I don't understand.

 

[WattleIdo]

sorry, you went with another lender that is not CBA?
and that lender lend you on purchase price with a full/desktop valuation?
which bank?

hahaha very good

 

[Big Will]

I don't understand.

Me either, except I think he got a loan with another bank without a valuation (or they did their own valuation and said okay). He also got nearly 1% the standard rate.

So I am assuming he got the loan and a few more grey hairs haha. Good lesson/reminder to watch the pre-approval trap.

 

[RetireRich101]

BigWill, you start this post to seek help.
There are alot of Brokers here to help genuinely
It's either you don't want to say who or don't know who the 'other lender', as we're guessing alot in this OP.
It appears you accepted the 'other lender' with a 1% discount, mind sharing who this lender is?

 

[Mick C]

Im guessing it was CBA that was offering the 1% discount but the valuation fell short...so hence the frd went with ANZ who doesn't need to do a valuation in some cases and will just accept the sale contract but discount is 0.98% ( which sounds about right for ANZ)

Note:
ANZ 0.98% discount = 4.90% Variable rate
CBA 1% discount = 4.90% Variable rate.

So overall still a good win with the new lender( presuming its anz given the no val)

 

[WattleIdo]

I think Mick C has explained it but wow it's all a bit cryptic, isn't it? Are MightyWill and BigWill one and the same or alter-egos or is it just co-incidental that BigWill understands what MightyWill is doing?

 

[RetireRich101]

I think Mick C has explained it but wow it's all a bit cryptic, isn't it? Are MightyWill and BigWill one and the same or alter-egos or is it just co-incidental that BigWill understands what MightyWill is doing?

I must got Willy mixed up. sorry BigWill.

 

[Big Will]

I think Mick C has explained it but wow it's all a bit cryptic, isn't it? Are MightyWill and BigWill one and the same or alter-egos or is it just co-incidental that BigWill understands what MightyWill is doing?

Two different people (unless im bipolar).

I used to be a REA but am no longer and have nothing to gain except knowledge and also give back my experience. I was a member of B.I.G (Better Investing Group) that was in Brisbane many years ago for people who have been around that long. Been viewing forums from time to time and joined Feb 2005.

Have moved from Brisbane around 2008/9 and now married with first child due October.

No worries RetireRich101 I was about to say yes I did ask for help along time ago but not recently.

 

[MightyWill]

Hi all,

Sorry for the late response here. To fill in the gaps, I have been banking with CBA my entire life so it made sense to get my loan through them factoring in their good home loan deals at the moment. They have a good 3 year fixed rate as well. My broker was able to get 1% off the variable rate which was fine by me. When it came to crunch time during cooling off, the CBA desktop valuation came in under by roughly 70k. My broker did was was sensible by escalating for a full valuation to be done asap. In the meantime, my broker and I didn’t waste time; we went and applied for another lender. The second lender gave me 0.98 off the variable rate; however, their variable is slightly cheaper than CBA so it equals to about the same as 1% off.

Until settlement and loan goes through, I won’t advise the second lender as I am what you call superstitious. Yes the second lender did not do a valuation as I had 20%.

CBA came back with the full valuation days later after cooling off had ended. It was a tad higher but not much from the desktop valuation.