Low Bank Valuation

Discussion in 'Property Finance' started by INVSTOR, 15th Aug, 2013.

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  1. INVSTOR

    INVSTOR O+

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    I paid for a bank val a year ago that came in $100,000 less than similar properties that had recently sold. Only just found out. Now bank is saying if I want to access equity I need to pay for another valuation. I feel reluctant! Is there anything I can do?
     
  2. INVSTOR

    INVSTOR O+

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    I paid for my own valuation a year before banks, and even though area was steadily rising, it's $10,000 less than my val.
     
  3. Rolf Latham

    Rolf Latham Member

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    Pay for the VAL or move lenders ...... which may seem overkill to save a VAL fee

    Ta

    Rolf
     
  4. see_change

    see_change Apprentice Timing Lord

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    ooops misread

    Cliff
     
    Last edited: 15th Aug, 2013
  5. INVSTOR

    INVSTOR O+

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    So there is no point, giving them links to uglier, smaller properties that sold for more than their ridiculous valuation? I would be super grumpy if valuation came in really low again. Too many break fees to move fixed interest.
     
  6. Rolf Latham

    Rolf Latham Member

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    I guess there are some valuable lessons there for others about to embark on the fixed rate fun

    Typically a VAL review may yield a 1 in 10 higher VAL

    Ta
    Rolf
     
  7. INVSTOR

    INVSTOR O+

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    Yes, your typing/voice keeps ringing in my ears about fixed rates :)

    RE agent is currently valuing my property, I'll try to enforce a copy onto next valuer.
     
  8. WigansAFC

    WigansAFC Member

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    As a valuer, I don't get annoyed when people hand me appraisal information, aslong as they are sales that have settled and the agent is not 'buying a listing' with their appraisal..

    It wouldn't hurt
     
  9. INVSTOR

    INVSTOR O+

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    Thanks, I will do. It's one of those tiny suburbs where the best properties are tightly held. I can see how it could easily be skewed if you weren't too familiar with area.
    A house behind mine on half the size block and half the size house and not very nice street just sold for $70,000 less than my valuation. Ouch!!
     
  10. Aaron_C

    Aaron_C Finance Broker

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    Well, you can make any property worth whatever you want. You just need to pick the right sales.
     
  11. Marty McDonald

    Marty McDonald Mortgage Broker Syd

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    Come on really?
     
  12. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    I don't see many valuers falling for that one.

    If you're going to give a valuer comparible sales, do comprehensive market research and give them genuinely comparible sales instead of wishful thinking. Valuers will find their own sales if your information is limited, and you'll probably end up disappointed.
     
  13. Jake D

    Jake D Hi Vis CAD nerd.

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    How many comparative sales would it be useful to supply? 3? 5?
     
  14. INVSTOR

    INVSTOR O+

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    Part of the problem is there really isn't many sales to use. There has been two sales recently that are really run down. Built in the 80's with no improvements. They have brick interior walls rather than plaster. Mine is well maintained and built ten years later plus had some improvement and built by quality builder. Last valuation was only about $120,000 more than replacement cost of house. Would it help any To get value of land and value off builder to build house?
     
  15. INVSTOR

    INVSTOR O+

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    My back neighbour has just put a 2 bedroom house on market yesterday. It has similar kitchen and facade but a bit cheaper looking. House and block are half the size of my place. It's on the market for $50,000 less than my pathetic bank valuation. Will be interesting to see what it sells for.
     
  16. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    In some markets finding comparible sales can be a real problem, unfortuantely there's not a lot you can do about it, other than give reasons why most of the market is not comparible (land size, location, etc). I've seen more than a few occassions where the lender went back to the valuer specifically because their comparisons weren't actually compariable (by the valuers own admission).

    Jake, you need at least 3 comparible sales, but I'd strongly suggest you need a lot more information to get a good result. With only 3 or even 5 comparisons, you're still potentially ignoring a potentially much larger market. I've had occassions where we provided a dozen comparisons in a tightly held market to justify our position. The valuation result was favourable, but the valuer still found his own compariables to justify his report.
     
  17. Aaron_C

    Aaron_C Finance Broker

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    Yes, really. My own property was valued by one valuer at $1.8m, then a month later it was valued at $2.5m.

    Another was valued at $900k and a month later at $1.5m.

    What do you think?
     
  18. Peter_Tersteeg

    Peter_Tersteeg Finance broker/strategist

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    I think those sort of variations between different valuers occur all the time given the price point and the locations you've mentioned previously. It's not uncommon to have substantial difference in results.

    However, cherry picking good results for comparible sales is unlikely to help much if there are other comparibles that aren't as good. As I've indicated, valuers will find their own comparibles to justify their position.

    Last week we say a 30% variance between an RP data report and a Residex report performed 24 hours appart on the same property (Residex was higher in this case). Depending on which research house a valuer uses, this could easily explain the difference in your own results.
     
  19. Marty McDonald

    Marty McDonald Mortgage Broker Syd

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    Duck for cover ;)...., I think:

    a) Those figures are not reflective of my 10 + years experience. Full valuations you say, normal resi metro property? We all know you get variance between valuers but these are very extreme examples if the properties are not super unique.

    b) You post so much that you are not giving enough thought to your replies.

    c) Perhaps showing off a bit on the $2.5 mil!
     
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  20. Aaron_C

    Aaron_C Finance Broker

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    Haha no I'm not showing off! Just showing the massive variances. Both times the under-valuers were young people. FYI these are properties in Metro Melbourne with lots of comparables. The idiotic valuers just chose the ones that wanted to fit the narrative. I know most aren't like that but those idiots could cost me an extra $1.3m in equity. This is no joke.