Hi,
I am a newie to this forum & I would like to share my experience with you re a development site in Brisbane that was assessed by a bank valuer in Brisbane. One thing that I was watching with an interest was to see what method the valuers would use to ascertain the value of land & what would be the market value of land. The financier initially agreed to provide XXX amount (or 75% of valuation, whichever is the lesser, not to exceed 80% of cost). Costs included fixed contract, DA & BA, land value. In our equation, land value played a critical part. The land (and an old house in it) was bought for $475k a couple of years ago in a prime location 6 k to CBD, close to a shopping centre, bus & train stations, schools, university,etc. Now three is a DA, BA, unconditional & solid contracts & surprise surprise the valuation came back, guess what the land was valued at $575k. Everyone is in shock after hearing the outcome as we expected the figure would be around 700 mark. I am still awaiting a copy of the valuation, however I was told this is the way the land was valued: Land Value= Net Realisation - Total Construction Costs (builder contract+DA+current loan on land). We disputed this as we strongly believed the land was under-valued & we we seeking market value of the land instead. Meaning getting market value of the land by comparison. Well, we didn't get nowhere. Here is my question, what is the definition of market value? do different valuers utilise different methods? Do customers have a say when it comes to property valuation, & can we ask financiers not to appoint X, Y, Z valuers if we know them already (& hope they haven't changed their names), what about asking financiers as to what methodology the valuer would be using? Please share your thoughts.
Regards, Cirrus
I am a newie to this forum & I would like to share my experience with you re a development site in Brisbane that was assessed by a bank valuer in Brisbane. One thing that I was watching with an interest was to see what method the valuers would use to ascertain the value of land & what would be the market value of land. The financier initially agreed to provide XXX amount (or 75% of valuation, whichever is the lesser, not to exceed 80% of cost). Costs included fixed contract, DA & BA, land value. In our equation, land value played a critical part. The land (and an old house in it) was bought for $475k a couple of years ago in a prime location 6 k to CBD, close to a shopping centre, bus & train stations, schools, university,etc. Now three is a DA, BA, unconditional & solid contracts & surprise surprise the valuation came back, guess what the land was valued at $575k. Everyone is in shock after hearing the outcome as we expected the figure would be around 700 mark. I am still awaiting a copy of the valuation, however I was told this is the way the land was valued: Land Value= Net Realisation - Total Construction Costs (builder contract+DA+current loan on land). We disputed this as we strongly believed the land was under-valued & we we seeking market value of the land instead. Meaning getting market value of the land by comparison. Well, we didn't get nowhere. Here is my question, what is the definition of market value? do different valuers utilise different methods? Do customers have a say when it comes to property valuation, & can we ask financiers not to appoint X, Y, Z valuers if we know them already (& hope they haven't changed their names), what about asking financiers as to what methodology the valuer would be using? Please share your thoughts.
Regards, Cirrus
