Do Banks Undervalue a property

[poperr]

I recently arranged for Finance for House and land 4 X 2 in Western Suburbs of Melbourne. The price 330k, the valuation from one bank was 290k and another bank was 300k. The agent (someone who has helped with all my properties and helped me buy in the right places) has already had 18 sold in 3 months and has not experienced this.

The financier said this may be banks becoming more cautious, or the property is overvalued. What should I do?

 

[WBG Redcliffe]

Not much you can do. At the end of the day the banks get their valuations from companies like Heron Todd White and according to the current affairs shows during the past week the value’s are coming back reflecting a potential flat market.

 

[grossreal]

hi
in fact it depend on the bank
and how or what the bank has asked the valuer to value on.
might seem funny but its true.
value is very flexible and you can value on sales in the area,space, lease, or fire sale.
each and every lender is different
they ar not valuing down as such they are reducing risk and for that reduced risk they give a different interest rate or that the theory.
there are was to get the result you want and if you have a read on value in a couple of my posts you will understand ways of doing it

 

[silversands]

hi G R, which posts are those, I would love to take a look.

Thanks, Jodie

 

[grossreal]

just have a look at a couple of my last posts on value
value is a very subjective thing and no one has the same idea.
pices is governed by lots of things the price you are will ing to pay and the price a vendour or owner is willing to accept.
price and value are very different things.
to get a valuation you want you have to do most of te valuation yourself and then present it to a valuer and you also have to work out how that valuer looks at value and thats not easy.
if you go to about the last 10 post one will be on value sorry can't be more specific but some one here may be able to attach a link
I organise my own valuation and I structure it the way that best suits me and then work out which valuer on the lenders that I want use is on there panal and then work out which one will give the value I want and thats not always higher it maybe for a specific reason.
I can explain the difference between value and price but it would be avery long post.

 

[Rolf Latham]

Hiya

Mucn depends too on the LVR.............at that sort of money, many lenders wont even do a valaution if at 80 % or below.

We have our fair share of val disputes, sometimes there is an obvious error, sometimes there a difference of opnion, but more often than not Id have to say the valuers have the "right" value and the estimate or contract price is out a little.

I have even hgad valuers come back with a valuation 10 % less on a mortgagee auction................go figure.................

ta
rolf