Long time reader, first time poster.
Hoping for some advice/experiences in dealing with a bank valuation that has come back below the contracted price. Short story is I bought a place in Melbourne at public auction a few weeks ago. There were two bidders - a buyers advocate and me. We pushed the price up rapidly and it supposedly sold for ~25% above the reserve, 4 mins after the auction started. I understand there were 6 other parties the agent was expecting to bid - it was a unique property.
An independent valuer has completed a valuation for the bank that suggests the 'market value' is 12% below what I have paid. It references the fact the auction only had 2 bidders who were aggressive, I was previously the underbidder on a similarly priced property in another suburb a week prior, the reserve and fact I was bidding against a buyer's advocate. The valuer had been unable to find any comparable properties in the same suburb, so has used 5 properties in surrounding suburbs.
My banker (at CBA) is going to dispute the valuation/order another firm complete one, but I'm doing some work to assist her in building a case. I've:
- Found comparable properties in the same suburb sold over the last 12 months the valuer has seemingly overlooked
- Sent my calculations on how I determined value - primarily based on (1) comps (2) per sqm for the suburb (3) median price growth since the property was sold 5 years ago and (4) comps in surrounding suburbs I believe are more appropriate than those in the report.
I'm interested in anything else I can do - I'm guessing others have dealt with this problem before. Going back to first principles, I'm still struggling to work out how a public auction with willing buyers and willing sellers is not illustrative of market value.
Any thoughts/advice appreciated! Cheers.
Hoping for some advice/experiences in dealing with a bank valuation that has come back below the contracted price. Short story is I bought a place in Melbourne at public auction a few weeks ago. There were two bidders - a buyers advocate and me. We pushed the price up rapidly and it supposedly sold for ~25% above the reserve, 4 mins after the auction started. I understand there were 6 other parties the agent was expecting to bid - it was a unique property.
An independent valuer has completed a valuation for the bank that suggests the 'market value' is 12% below what I have paid. It references the fact the auction only had 2 bidders who were aggressive, I was previously the underbidder on a similarly priced property in another suburb a week prior, the reserve and fact I was bidding against a buyer's advocate. The valuer had been unable to find any comparable properties in the same suburb, so has used 5 properties in surrounding suburbs.
My banker (at CBA) is going to dispute the valuation/order another firm complete one, but I'm doing some work to assist her in building a case. I've:
- Found comparable properties in the same suburb sold over the last 12 months the valuer has seemingly overlooked
- Sent my calculations on how I determined value - primarily based on (1) comps (2) per sqm for the suburb (3) median price growth since the property was sold 5 years ago and (4) comps in surrounding suburbs I believe are more appropriate than those in the report.
I'm interested in anything else I can do - I'm guessing others have dealt with this problem before. Going back to first principles, I'm still struggling to work out how a public auction with willing buyers and willing sellers is not illustrative of market value.
Any thoughts/advice appreciated! Cheers.