Finance for non habitable property

[j_p]

Currently we are looking to purchase a place for a PPoR that has been vacant for ~7 years and is about to come on the market, not listed yet so trying to get in an offer quick. Currently the bank would probably view this property as non habitable (even though possums seem to think it is fine). The purchase price, assuming our offer was accepted, would represent land value only.

What considerations do I need to think about?

For reference
Price ~$550k
LVR 85-90% ideally, or would we need to go to sub 80%?

 

[Peter_Tersteeg]

Just make sure the valuation acknowledges it is for land value only.

We had one of these last year. As long as you pay the right price for it and you can show that you've factored in the ability to build on the site, it's not a big deal at all.

 

[Mick C]

As pete mentioned, it will valued as "land value only" if it's a full valuation lender esp in the >80% LVR

 

[j_p]

OK I thought that land value only might be the case.

Might try and see what land value the council puts on their rates, not sure if this is accessible to the public however, anyone?

Are there any lenders likely to "miss" the condition of the property by not doing a full valuation? Fewer hoops can only be a good thing

 

[Terry_w]

Many lenders don't do a valuation at all. But could this amount to non disclosure...

 

[j_p]

Thanks for a voice of reason Terry

Thanks to you both PT and Mick, always helpful.

If we get (un)lucky and get the place I guess I'll have to start a thread of our adventures of restoring the place.

 

[Shahin_Afarin]

A valuer will deem a property uninhabitable if there is no kitchen or bathroom.

I would recommend using a lender that has their own DUA and also if it were my client I would recommend ordering an upfront valuation (provided the lender allows for it) and running it by credit to ensure that they are comfortable with the security.

There is much more to the valuation than if its habitable.

Some lenders with not take on this security even at 80% LVR so its not as easy as you think even at 80% so lender selection is key.

 

[j_p]

A valuer will deem a property uninhabitable if there is no kitchen or bathroom.

I know these are there somewhere, though the condition will be poor. There is a section of roof that needs replacing due to a fallen branch I believe which I saw as a bigger issue.

Haven't been able to gain access to verify things yet. Early days but trying to be prepared.

 

[Shahin_Afarin]

I know these are there somewhere, though the condition will be poor. There is a section of roof that needs replacing due to a fallen branch I believe which I saw as a bigger issue.

Haven't been able to gain access to verify things yet. Early days but trying to be prepared.

That doesn't necessary make it uninhabitable. Valuers technically need to deem a property inhabitable if its missing either a kitchen or bathroom.

I have financed heaps of "dumps" and the risk ratings have come back a "3" which doesn't raise any alarms.

You may be surprised which is why I am recommending that you get an upfront valuation ASAP.

Is it an auction sale or private sale?

 

[westminster]

That doesn't necessary make it uninhabitable. Valuers technically need to deem a property inhabitable if its missing either a kitchen or bathroom.

I have financed heaps of "dumps" and the risk ratings have come back a "3" which doesn't raise any alarms.

You may be surprised which is why I am recommending that you get an upfront valuation ASAP.

Is it an auction sale or private sale?

I'll second this. What you consider uninhabitable is different to banks and also the health act (in WA the health act wants a laundry as well)

 

[j_p]

Interesting! Need to check out how bad the roof is etc.

We need to be delicate as the owner is recently deceased (they didn't live there anymore) we started to try and track down the relevant parties only to find out the owner had passed and family is looking to sell though they are quite emotional, understandably.

 

[westminster]

Interesting! Need to check out how bad the roof is etc.

We need to be delicate as the owner is recently deceased (they didn't live there anymore) we started to try and track down the relevant parties only to find out the owner had passed and family is looking to sell though they are quite emotional, understandably.

It may also take them awhile for everything to be ready for a sale as the executor needs to do a few things first.

Good luck with it. A roof is not compulsory on a house

 

[j_p]

A roof is not compulsory on a house

Here I was thinking it was. Obviously I'm a little precious.