Bank Valuations?

[Bigtone]

When I was setting up a LOC against my PPOR, the valuer came along with his measuring wheel etc.. He didn't say a lot, other than to ask what I thought the property was worth. I was a bit surprised, and it caught me off guard. I knew that most owners he asked would probably have an inflated opinion of what their house was worth and I gave him my realistic, or even a slightly low number.
I immediately regretted it.

His valuation came back at that exact figure. Surely he didn't take any notice of what I thought?? I was definitely a bit low, but typical of 'bank valuations' i guess..

He asked so he knew what u needed to do the deal, so he probably assumed the figure u quoted was all you needed so why stick his neck out above this figure. A bit like a contract price a valuer thinks the value is 5% higher than contract why take the risk just put down contract price. U know next time!

I have seen this dozens of times.

When I get asked by valuer i always go to the top of the realistic range, anything above that they just ignore, valuer normally goes away then comes back with " i am about $30k away from that" I respond can you stretch it $10k to make the deal"? 9 out of ten they stretch it the $10k and everybody happy.

Rightvalue do you value in Mordialloc? If so I am interested in how the St Lucia development due to finish this year will value up, I didn't buy any in there but know a few that did. I thought for an off the plan purchase it was not so bad as it had some unique features but that of course was built into the price.

Cheers

BT

 

[wylie]

It is my understanding that it's better to overvalue your place, than to undervalue it, a little bit like selling a property. So, if want the place valued at $360K, it's better to suggest to the valuer that the place is worth $390K (by showing comparative sales via RPData) and you are more likely to get the 360K you wanted in the first place.

Maybe Right Value has an opinion on this?

Cheers
Lisa

I was meaning that comment (re my original comment about under-valuing our properties and getting a nice surprise) in relation my own figures, and when the loan broker asks me what I think our houses are valued at.

I have only ever "suggested" a value to a valuer once, when we were short of getting over the line after having just renovated, and knowing that reaching the value so soon after the reno was going to be tough (which it was). This was when I did some digging and gathered some comparables.

I was very wary of suggesting a value, but it did value up enough to get the dea through. I was worried though.

 

[Luv2Travel]

I've recently had both my properties valued and was pleasantly surprised with what they came back with. Definately best to put the upper end of the range you think it's worth. For example, one of them, I thought would be worth around $440K conservatively. I was almost going to put that (am learning to not be so conservative and be more pushy with banks now though), as that was more than I needed anyhow, but decided to speak to an agent I work with. He told me no way, definately worth $450K-$480K and told me to put the higher end of it so I did. Valuer came back with $475K.

 

[Perp]

As a general rule a sale is considered to be evidence of market value.

Thereofore primaface your sales contract is deemed to be representative of market value.

I agree, but I also find it interesting that one purchaser and vendor get to be so influential on the value. Do you look at the contracts, RV? For example, I've heard of people signing a contract for, say, $420K, but including a $20K "rebate on settlement". I've never bothered with this kind of game-playing myself, but I've heard that the vendor and purchaser can agree to do that so that the valuer is told "purchase price $420K" and will value at $420K rather than $400K. I would have thought that the banks see right through this and tell the valuer $400K.

Many Jenman agents tink it is cute to get the purchaser to offer say $360,200 to show the vendor they have squeezed every last dollar out of the purchaser.

I used to value these contract at $360,000 .. but the bank clerk gives me grief and asks for the valuation to be raised to purhcase price as if not it will ruin their deal etc etc.. so I will value the bloody thing at $360,200 .. once I valued something like that at $360,205 and got just as much grief.

Grrr, I'd get annoyed at paying these stupid games. Serves them right for trying to be "cute".

Please do not tell me I am lying about my personal approach to conducting valuations made under my own CPV status just because you have had varying experience with other valuers in the past.

Agreed; that was out of line, grossreal.

RightValue has been both transparent and accurate on how things work in the valuation space. What many years running a lending business has shown me is that borrowers invariably over estimate the value of their property.

Amen, and ... guilty! However the last vals on a property of mine ranged from $600K to $790K, over 20%. If valuers vary that widely, it's understandable why owners have difficulty being more accurate.

 

[virgo]

Bank valuations

It is my understanding that it's better to overvalue your place, than to undervalue it, a little bit like selling a property. So, if want the place valued at $360K, it's better to suggest to the valuer that the place is worth $390K (by showing comparative sales via RPData) and you are more likely to get the 360K you wanted in the first place.

Maybe Right Value has an opinion on this?

Cheers
Lisa

Hiya
Re the above, if you subscibe to RP Data, it has this tool that performs CMA (comparative market analysis). This provides a range say 400-490K for a particular property..wonder if one can use the upper range to "suggest" a value to the valuer?

 

[Perp]

Re the above, if you subscibe to RP Data, it has this tool that performs CMA (comparative market analysis). This provides a range say 400-490K for a particular property..wonder if one can use the upper range to "suggest" a value to the valuer?

You can use whatever you like, but if you go too high, you risk alienating the valuer.

A range of $400-490K hardly seems useful; presumably anybody with a house worth $450K could get that close anyway.

 

[Propertunity]

...if you subscibe to RP Data, it has this tool that performs CMA (comparative market analysis). This provides a range say 400-490K for a particular property..

Hi virgo,

RP Data has 2 options for a CMA - a standard CMA and a predictive CMA.
The predicitve CMA gives results like you are describing. There can be a range of $100K which I (and others no doubt) find totally useless. I can only assume that the algorithum that they use to come up with this stuff is a dud.

Whilst still not perfect by any means, I find the pricefinder equivalent in PDS Live gives much better resuts.

However, there is nothing that beats having recent and intimate knowledge of comparable sales in one's head. Having software black box technology confirm your own conclusion is better, I think, than relying on it totally. In a sharply rising market no software system can keep up, which is one of the reasons valuers struggle sometimes.

 

[virgo]

Hi virgo,

RP Data has 2 options for a CMA - a standard CMA and a predictive CMA.
The predicitve CMA gives results like you are describing. There can be a range of $100K which I (and others no doubt) find totally useless. I can only assume that the algorithum that they use to come up with this stuff is a dud.

Whilst still not perfect by any means, I find the pricefinder equivalent in PDS Live gives much better resuts.

However, there is nothing that beats having recent and intimate knowledge of comparable sales in one's head. Having software black box technology confirm your own conclusion is better, I think, than relying on it totally. In a sharply rising market no software system can keep up, which is one of the reasons valuers struggle sometimes.

Thanks Alan for the reply. While i do see the limitations of the predictive CMA

i was wondering whether i can quote that figure when the bank valuer comes a calling...

cheers

 

[Propertunity]

i was wondering whether i can quote that figure when the bank valuer comes a calling...

Well virgo, you can quote whatever you like but if it is too far out, you risk being lumped into the "she has no idea and she wants too much" pile on the valuer's desk.

Personally, I'd rather narrow the price range down to say, a $20K range and quote the high end of that, to be taken seriously.

 

[virgo]

valuation

Well virgo, you can quote whatever you like but if it is too far out, you risk being lumped into the "she has no idea and she wants too much" pile on the valuer's desk.

Personally, I'd rather narrow the price range down to say, a $20K range and quote the high end of that, to be taken seriously.

Thanks Alan; will digest and plan strategy...

 

[artlez]

Not trying to advertise or anything but I thought some people might be interested in this - PDS Live as mentioned above is offering a 3 day trial period (I'm not sure if this is always offered or not) but I just signed up and it looks pretty nice. But there's no way I'm going to pay $255 or whatever a month for it lol