Not All Valuations are Equal

[HotRod]

Had this just happen recently.

Was going through finance approval for a new purchase and one of the major banks had valuations done. One of my properties came back at $495K.

One thing led to another (nothing to do with the vals) and we had to shift one of otrher big banks quick smart.

Val came back at $480K.

Both were kerbside assessments, so it's interesting to see that even vals will vary from valuer to valuer.

 

[Aaron_C]

You're lucky it came only a 15k drop. I've seen them go from $1,500,000 to $900,000 then back to $1,500,000 again!!!

 

[Ausprop]

no doubt about that, I'd say that's a minor variation

 

[Peter_Tersteeg]

The value of a property is essentially what two people (seller & buyer) agree on on a specific day. Everything else is just an opinion, including valuations performed by professional valuers. Opinoins can vary.

This is why almost all purchase valuations come in on the purchase price.

 

[HotRod]

I know this to be right, just never experienced it myself first hand.

Glad it's only a $15K difference and not a $600K difference.

But I agree that the valuation IS what a buyer and seller agree on. That is the only thing that matters, not some outsider's opinion who only values property for a living and does not buy for a living.

Difficulty is when you have a property that is neither bought or sold, but has sat around for years earning you money. What value is that?

 

[Aaron_C]

Difficulty is when you have a property that is neither bought or sold, but has sat around for years earning you money. What value is that?

That is why refinances are notoriously hard as valuations often don't stack up.

 

[Rolf Latham]

That is why refinances are notoriously hard as valuations often don't stack up.

Yes, where possible brokes do their home work and try to get upfront vals done to exclude the "white picket fence " Syndrome

ta
rolf

 

[tobe]

of just go off the rates notice rather than the customer estimate....

 

[tess85]

of just go off the rates notice rather than the customer estimate....

Don't rate notices only estimate land value?

 

[tobe]

and 'capital improved' value usually.

 

[tess85]

OK... just wondering. Cos the assessment on my council rates are reeeeeeeally low... guess I shouldn't be complaining cos it means the rates are lower too!

 

[MaxwellSmart]

In NSW the value shown in your rates invoice is the land value only.

The LV is supplied by the valuer general every three years.

Your rates are calculated as a percentage of this LV.

 

[BMan]

the rates notice in sa lists the total value and i know alot that are way undervalued and also some that seem outrageously overvalued... dont know how they think of them .
i also know you can complain if they raise it and most often they will lower it.

i dont see how the banks would use that as justice for a loan but if yours is overvalued it wouldnt hurt to suggest it

my GF gave that figure to the bank when she wanted a reval done and they used that without even looking at the property(could of been because its a rural location who knows) and highly doubt that a valuer would of valued it at that
so like anything you dont know unless you ask

 

[Rolf Latham]

Had this just happen recently.

Was going through finance approval for a new purchase and one of the major banks had valuations done. One of my properties came back at $495K.

One thing led to another (nothing to do with the vals) and we had to shift one of otrher big banks quick smart.

Val came back at $480K.

Both were kerbside assessments, so it's interesting to see that even vals will vary from valuer to valuer.

Just looking at this again

a less than 5% variance is to expected unless you have full on "cookie cutter" product.

ta'rolf

 

[Jtkumnick]

Valuation depend on who is paying the valuer. If its the bank, you can bet it will be different to one that you get done yourself. Even the banks have substantial differences.

Liability can be an awful thing.........

 

[Rolf Latham]

Valuation depend on who is paying the valuer. If its the bank, you can bet it will be different to one that you get done yourself. Even the banks have substantial differences.

My experience over 12 years says nah............folklore and urban myth.

U pays your 400 bucks to valuer x and let them know u want a mortgage purposes val for lender y.

Unless you there are some unusual circs, like a major reno, or you have bought very well and doing a refi, the outcome will be similar

The fact that diff valuers have spread is to be expected.

ta
rolf

 

[Marty McDonald]

Yes agree with Rolf.

However they do seem to value lite on almost all non purchases! ie refinances / restructures. They also are slow to value up in rising markets and quick to value down in stagnant / decreasing market. As you would expect really but no excuse. Just value at market and stop deducting a few % of value based on worst case scenarios!!

 

[Jamie M]

However they do seem to value lite on almost all non purchases! ie refinances / restructures.

Agreed - it's quite rare to see a purchase val come back lower than purchase price......but it's not uncommon for a refinance val to come in lower than expected.

Cheers

Jamie

 

[Token Funder]

Agreed - it's quite rare to see a purchase val come back lower than purchase price......but it's not uncommon for a refinance val to come in lower than expected.

Cheers

Jamie

That's because the former is what the market has decided the property is worth while the latter is generally what the owner needs it to be worth.

 

[Rolf Latham]

That's because the former is what the market has decided the property is worth while the latter is generally what the owner needs it to be worth.

"white picket fence syndrome"

mostly Want, rather than need we find.

Its a normal human emotion !

ta
rolf