On the subject of did you know !!

From: Rolf Latham


Hi all

A reply to a post below really got me warmed up. I think this is my first actual posting for a new thread. I have been waiting for a little while to reply to someone elses on a similar topic but wait no more, there is equity at peril.

Recent experience has shown me that the valuation you generally get from a lender when refinancing is usually 5 to 15 % short of where it could be, because you get what you ask for.

This is because applicants for finance generally have no idea what their properties are really worth. Surprising for the current market but most applicants are underestimating their property values.

Three recent experiences one at 205, really worth 230, releasing an extra 22 500 equity, thereby providing 100s of thousands of geared investment opportunity.

Another at 515 estimate actual 570 and another at 370 worth 420. While these figures dont sound huge, with a 90 to 95 % loan you can control some serious property.

If you want to milk the equity in your properties properly you really need to the homework to ensure you are getting the right value.

This homework might take you 20-40 real hours, but at say $ 500 per hour it might be worth it ? Use Residex, RP Data, use rumours, use open houses, auction results, whatever you can find that supports your cause.

To get a lender to believe it, YOU first need to believe it.

Ta

Rolf
 
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Reply: 1
From: Dave :)


Rolf,

You are spot on. Great post. What you've outlined appears common
sense, and yet too few people actually go to the trouble.

Keep up the good work.

Cheers,

Dave
:)
 
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Reply: 1.1
From: Paul Zagoridis


Congrats Rolf on an instant classic.

I need to remember to push for the valuation. It's something I've only done sub-consciously in the past. And you've explained it very clearly.

My scenario is pretty unique...

I sold my Darlinghurst apartment last week. Its a long story that I wont go into now, but I sold it for a record (non-penthouse)price in my building. But that's still $20K less that the bank's valuation late last year.

So go for the valuations but watch out if you ever need to liquidate.

Dreamspinner
 
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Reply: 1.1.1
From: Victor Mann


In relation to valuations , if you ever see one u will see that the valuer will look for sales in your area within the last six months. Generally looking for properties of similar grade, better and worse. The valuation is then made based on those results. The best way too judge your property value is to watch sales in your area and visit a n number of auctions. Establish within reason without to much emotion how your property compares.That is usually very close to the true vale

Good Hunting !!!!!!!

Victor
 
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Reply: 2
From: Jeanette .


But Rolf,
I know that but when I say to the lender 'the valuation is a bit low', they say 'well it may be but we have to lend on what the valuation says'. I had one valuation where the comparable properties weren't even comparable - he cited sales of old 3 br fibro houses with one bathroom against my brand new brick veneer 4 br 2 bathroom house. It was ridiculous. I made a profit when I sold but you never go back to the lender and say 'See I told you so'. The fact of the matter is that when you are borrowing, you already have the project underway and time is running and you tend to accept whatever crumbs are thrown your way just to get the thing going. If a lender ever advertises to be flexible with valuations, I'm sure they will be on to a winner. Bye for now.
 
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Reply: 3
From: D R


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HI Rolf,

Glad I could help warm you up........................:eek:)

See you at the Big BBQ. You will probably need more warming then, being
winter and all.

>A reply to a post below really got me warmed up. I think this is my first
actual posting for a new thread. I have been waiting for a little while to
reply to someone elses on a similar topic but wait no more, there is equity
at peril.

Cheers

Darren
 
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Reply: 2.1
From: Rolf Latham


Hi Jeanette

You are right. Any lender will do what you let them get away with. In some instances you have no choice, especially if they have you tied up.

Part of the excercise there I suppose is to have contingency insurance in not being tied to one lender with a take it or leave it attitude - they do like to carve market share.

TA

Rolf
 
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