Bank Valuation: Online property valuation LOWER than what I think it will sell for.

[nhg]

I found an auction property with good returns and growth potential on (my) total estimated purchase price of $470k. However the online valuation on onthehouse.com has a ‘good value’ estimate of $370k, $100k UNDER what I think it will sell for. To be frank, using past purchase price and adjusting for growth in the area, I also came to the same figure as onthehouse.com. The yields are there tho.

I called the bank to seek a valuation just to make sure if I purchased it I wouldn’t face myself having to pay an extra $100k out of pocket to make up the difference, however they want me to make a ‘hard’-application which will affect my credit score.

Any thoughts on how to get around this? Using a private valuer is $220 (worth the cost I suppose).

 

[Aaron_C]

....get a broker to order an upfront valuation?

 

[Rolf Latham]

I found an auction property with good returns and growth potential on (my) total estimated purchase price of $470k. However the online valuation on onthehouse.com has a ‘good value’ estimate of $370k, $100k UNDER what I think it will sell for. To be frank, using past purchase price and adjusting for growth in the area, I also came to the same figure as onthehouse.com. The yields are there tho.

I called the bank to seek a valuation just to make sure if I purchased it I wouldn’t face myself having to pay an extra $100k out of pocket to make up the difference, however they want me to make a ‘hard’-application which will affect my credit score.

Any thoughts on how to get around this? Using a private valuer is $220 (worth the cost I suppose).

Few things

Are you the servant of your lender, or are you their master : )...... get your broker or banker to earn their keep, and get an upfront val done.

A private valuer wont be worth diddly to you if the price you pay is 440, your valuer says 450, and the lenders valuer says 400. Rare, but it happens.

On the house is powered by Residex.......can be very good data, but thats all it is, data which is black box statistics

To get a full val upfront, the agent will get a sniff of what you think it should be worth, coz the valuer isnt going in totally cold.

ta
rolf

 

[buzzlightyear]

Onthehouse.com.au has been so inaccurate in two recent examples of refi I wouldn't use it to even estimate a ball park valuation. Not that i was using it, but more out of academic interest.

It doesn't take too long to get comps from re.com.au and REAs to get a much better sense of the market or ballpark value of your property.

 

[nhg]

How will a 'hard'-valuation affect my credit rating? Am I being paranoid?

Just want to know the consequences of what will happen if I put in an application and don't go ahead with the purchase.

 

[Aaron_C]

How will a 'hard'-valuation affect my credit rating? Am I being paranoid?

Just want to know the consequences of what will happen if I put in an application and don't go ahead with the purchase.

Upfront valuation by brokers are not an application so they do not impact your credit rating at all.

 

[Rolf Latham]

How will a 'hard'-valuation affect my credit rating? Am I being paranoid?

Just want to know the consequences of what will happen if I put in an application and don't go ahead with the purchase.

how long is a piece of string.

I refuse to work with lenders that wont see common sense on this sort of stuff..........unless there is VERY good reason as to why one wants to use lender X, id seek the services of a broker like Aaron who has just indicated that a broker ordered val wont affect your file at all, because no application is made

ta
rolf

 

[nhg]

Okay so hopefully last question.

Upfront Valuations are NOT the mortgage broker looking at Residex, but actually getting the bank to search for it?

The zoning is heritage, will go in at 80% LVR, would rather 90% but one half of the building was previously used as commercial space. *sigh* never dealt with heritage before.

Thanks Everyone for your helpful advice.

 

[Aaron_C]

Okay so hopefully last question.

Upfront Valuations are NOT the mortgage broker looking at Residex, but actually getting the bank to search for it?

An upfront valuation is done by a bank valuer, for the bank, and it is relied upon by the bank the deal is put to. It is not some desktop valuation which has no meaning.

 

[nhg]

how long is a piece of string.

I refuse to work with lenders that wont see common sense on this sort of stuff..........unless there is VERY good reason as to why one wants to use lender X, id seek the services of a broker like Aaron who has just indicated that a broker ordered val wont affect your file at all, because no application is made

ta
rolf

I only use a mortgage broker, though she seems hesitant on this one for some reason.

 

[nhg]

An upfront valuation is done by a bank valuer, for the bank, and it is relied upon by the bank the deal is put to. It is not some desktop valuation which has no meaning.

Thanks Aaron. Really appreciate the replies.

 

[Rolf Latham]

I only use a mortgage broker, though she seems hesitant on this one for some reason.

I would be too.

The lender would need to ok the val before I went to auction ! if you are needing a 90 %

ta
rolf

 

[Peter_Tersteeg]

You can't rely on a report from onthehouse, or Residex, or RP Data or any other similar report. Sometimes they're good, sometimes they're not. The do contain other information than a figure on the front page which might help you determine your own estate of value however.

Ordering a proper valuation can be useful, but essentially you'll get the valuers estimate of what it's worth, but this is still an estimate. A valuation prior to an agreed price may be different. If the valuation is lower, this could put you at a disadvantage with the lender because they may be obliged not to accept the sale price if they know a valuation is a different value. If the valuation is higher than the sale price, the lender will simply use the sale price so you don't have any advantage.

It's easy to say that if a valuer does a valuation, then that's what you'll offer because it must be the value of the property. Unfortuantely the vendor may disagree with you and for any number of reasons and want more. In this case the valuation clearly isn't correct because a sale isn't made (which is the true value of a property).

In essance, I think you need to get together as much information as you can, then use this to come up with a value that you beleive to be correct. Use this as the basis for your offer and negotiations. Odds are the banks valuer will agree with you when they see the figure on the contract of sale if your offer accepted.

 

[Mick C]

I only use a mortgage broker, though she seems hesitant on this one for some reason.

From what my heritage BDM has advise me - they will take sale contract price without the need for a valuation if LVR is under 80% and the property is located in a cat 1 location + under $500,000 --- to be honest i haven't tested out this feature yet....most of my heritage deals are considered "out of the box" or over 80%...

 

[Rolf Latham]

From what my heritage BDM has advise me - they will take sale contract price without the need for a valuation if LVR is under 80% and the property is located in a cat 1 location + under $500,000 --- to be honest i haven't tested out this feature yet....most of my heritage deals are considered "out of the box" or over 80%...

me thinkest OP means heritage zoning rather than Heritage Bank

ta
rolf

 

[nhg]

Heritage zoning.

Will buy at 80% LVR tho would want to refinance later to expand portfolio.

Called AaronC, hopefully he can help me out, so far so good. Will keep you all posted.

 

[Mick C]

LOL ok my bad....maybe i should read the full thread next time.