Re - val BINGO

Hi Everyone,

Recently purchased for $212k. Brought well in my opinion to the tune of 10-15%. Spent close to $10k in reno (Kitchen, floors, painting, landscape, tidy etc).

Just got a valution back as part of a reval/finance, and they have valued the place at $220k.

Rent is $280pw, RE agent puts the value of place at market ($265k). Have done my own research over last 6 months on area and I believe a fair market price of $250-$260k.

I am caught between a rock and hard place with Broker not willing to push back on Bank and negotiate this Valuation. I understand the banks position to have a minimum valution, but I want the chance to enter a dialog with the bank to discuss the reval and get it closer to the $250k i think it is worth.

I am confident in my abilities to negotiate etc...

I spoke with valuer, and plugged property even before it was performed. Tenant and PM presented property in its best light, and I inspected it before reval to ensure this.

Broker suggested that the bank is covering their arses, and the valuer has built into the valuation a buffer due to possible market downturn and unwillingness to be liable to be sued (I think this is disgraceful, as shouldnt a valuation be the value NOW, not in the future due to speculation????)

Options:

* One, take the valuation and the brokers word that nothing can be done to push back on bank (ie. he says it is not possible to view the actual valuation)
* Go outside the broker channel, and try and set up direct meet with bank to push my position.
* Pull the plug on bank, and look to new lender.

Can some of you give some idea of the dynamics? the position i am in, and any suggested courses of action?

I can name banks if anyone thinks necessary to determine if this is a normal technique!!!

Any pointers would be greatly appreciated!!!
 
Where is the property? When did you buy?

If you truly believe it is undervalued, then it is worth fighting. Can you take to the bank recent comparable sales at around $250-260K?
 
Are you sure that the valuer didn't value the property higher and that the bank didn't take a bit off of it? I have heard of this happening occasionally.

Banks DO NOT communicate to valuers to be conservative, allow for future falls etc.

I must admit that when someone tries the hard sell on me when I am valuing their property I don't like it .. but I value it as I see it - but I am less likely to err on the side of generosity .. others may just get peeved off...

You say pushing back on the bank .. what will you present other than ... the statement that your property is worth more?

You will need analysed sales evidence, not just selective sales evidence .. and even then I doubt it will work. I myself have moved on just two figures in the past 3 years .. and that was only when a new piece of relevant sales evidence was presented. Unless new evidence is included in the report the valuer basically cannot change their figure.

Remember the bank does not value the property .. an independent valuer will most likely have done the valuation. .. pushing the bank clerk you will meet will be a waste of time.

You could try getting your broker to ring the valuer and just asking what figure he put on it.

Otherwise .. try a different lender .. it is your easiest path.

good luck,

RightValue
 
Hi Everyone,



I am confident in my abilities to negotiate etc...

I spoke with valuer, and plugged property even before it was performed. Tenant and PM presented property in its best light, and I inspected it before reval to ensure this.
Options:

* One, take the valuation and the brokers word that nothing can be done to push back on bank (ie. he says it is not possible to view the actual valuation)
* Go outside the broker channel, and try and set up direct meet with bank to push my position.
* Pull the plug on bank, and look to new lender.

Can some of you give some idea of the dynamics? the position i am in, and any suggested courses of action?

I can name banks if anyone thinks necessary to determine if this is a normal technique!!!

Any pointers would be greatly appreciated!!!

Point 1, pushing the bank will achieve nothing it is the independent valuer that makes the call.

2, Valuers don't like being told their job (who does) and very rarely change mind. There is a skill in the way you treat valuers as professionals and with respect that often helps with the valuation upfront, getting them to change later is very rare indeed. A valuer can easily add or minus 10% depending on their experience with the owner or agent, that 10% up or down has a huge bearing on your investment journey so don't tell them their job but let them know what u r hoping for and they may stretch towards it if they like you rather than pulling back from the figure you TOLD them it was worth.

3, "I am confident in my abilities to negotiate etc..."

However in effect you have already negotiated with valuer and this is the result u achieved.

"I spoke with valuer, and plugged property even before it was performed. Tenant and PM presented property in its best light, and I inspected it before reval to ensure this."

So basically you had your chance and did not succeed with valuer so no point there, the bank won't move without valuer changing their mind so no point pushing the bank and the broker can't move without the bank so no point there.

Only chance is to get broker to order a new valuation through another valuer through another lender and if it comes in well then you can submit deal and refinance.

Good luck!
 
never chat to a valuer, it can only ever harm your chances. Give it another shot in 3 months, or try a diferent bank, theres a few now that have low/no cost pre-application valuations. Just make sure you get a diferent valuer!
 
LMI involved ?

even in the current times, if the val is patently wromg because somethig hasnt been considered in error, ts possible to get the val reviewed upwards , BUT many lmi's have a policy they wont accept the higher val period.

Good recent examples is the omission of a CBD car park on a separate ( but linked) title.

Was overlooked by valuer, and the lmi folk had no option but to allow the higher val.

ta
rolf
 
Thank you all for your awesome insights and responses.

I started this thread when my blood was still boiling a little lol, and may have sounded a bit cocky or arrogant in retrospect.

1. In regards to my interactions with the valuer, he called me to arrange a time firstly, i then passed him on to the PM... I then called back to see if he had been able to contact PM and that they had been helpful. This is the point that i did talk to him about the property a little, but only after he had asked me the direct question about what i had done as it has only been 3 months since the last valuation! I just went through the renos i had done, talked about the awesome tenant i have now and the rent that i am receiving. I painted the picture that it was now from my perspective a nicely presented place compared to some of the large HC areas of town... Didnt talk about recent sales, tell him to do his job etc as i was mindful of ******* him off as mentioned before.

2. Property is north of Newcastle, and yes i really think it is undervalued. RE agent said they would list it at $265k, market is at $265k, rent is $280pw and i would say this is $250k min as 3 beds on 1100sqm on the better side of town...

Rightvalue - Thanks for your insider insight there mate! awesome! Think they way this has all panned out, it could be a reasonable explanation that the bank may have said that value came in lower than it actually did. Will try and push the broker/direct to establish this.

Yep LMI is involved, but as I said I am caught between a rock and hard place on this as I cannot even get any idea that the valuation was even on the correct house lol, as my broker wont contact valuer, or discuss further with bank. No way to tell what they have included, not included in the valuation. Only info i have got from the broker regarding contents of the valuation is the slight implication that the valuer may have built into the value the risk of a downward slide of market in area (THIS just makes me so fricken mad!!!)...

so what do you guys think of this:

1. Give up on broker channel, and enter dialog with bank directly to just get a bit of clarity about the valuation, their position and see if they are will to move a little. This is a long shot, but i suppose worth doing as not much effort.

2. Take the reval and the extra $$$ int he short term.

3. Get Rolf on the case and hit up some of these lenders you mentioned Tobe??? Rolf you in???? haha

Not quiet as mad as i was last night this morning, but I really feel the bank i am dealing with are very dodgy. Went with them in the first place as they supposedly offer 95% to existing customers. I now have three mortgages with them, and I never got close to getting a 95% lend through with good serviceability. And in effect they are only really lending to 80% with these sort of valuation situations....BY design i reckon...
 
Most lenders monitor the number of vas that come in under borrower's expectations because it adds to rework rates and, therefore, cost. The reality is people tend towards overly optimistic numbers.

By way of example, my last lot of reporting for refinances had 30% over estimated by 20% or more. It is for this reason I take some of the self-assessed claims of CG bandied around on forums with copious amounts of salt.
 
By way of example, my last lot of reporting for refinances had 30% over estimated by 20% or more. It is for this reason I take some of the self-assessed claims of CG bandied around on forums with copious amounts of salt.

Yes Token but which figure is more accurate?

I could give you dozens of examples of getting valuations done just prior to a house going on the market and and the house selling for 20% plus more than the valuers estimate. Just had one a couple of weeks ago, valuers estimate $520k sold for $651k in Highett Vic. So it is not always the owners overestimation it can be the valuers underestimation. To believe either as fact is a mistake as the truth is often in the middle.

Cheers

BT
 
By way of example, my last lot of reporting for refinances had 30% over estimated by 20% or more.


Not from my submissions :) , we like to use some form of external validation such as residex and/or RP. That doenst always save you either.

In todays world to blindly submit a loan app on the basis of client estimate is very very costly both to the brokerage and potentially the clients CRAA enquiry volume

ta
rolf
 
Yes Token but which figure is more accurate?

I could give you dozens of examples of getting valuations done just prior to a house going on the market and and the house selling for 20% plus more than the valuers estimate. Just had one a couple of weeks ago, valuers estimate $520k sold for $651k in Highett Vic. So it is not always the owners overestimation it can be the valuers underestimation. To believe either as fact is a mistake as the truth is often in the middle.

Cheers

BT

Agree Bigtone,

had one recently where owner estimated $1.55 valuer came back with $1.4, sold at auction for $1.7
 
who wants to meet me in Martin place in 30min for a Investors against Property Valuers march!!! I have the placards already made up hahahaha

ah the jokes...
 
Nothing like the "Almost Right"defence line value it what people preceive it too be and nothing more,and that comes back to the money supply line.
..willair..
 
I had 2 valuations done recently

One came in slightly higher then i expected (compared to what the agent quoted)
one slightly lower then expected (compared to what agent quoted)

The reports came with plently of information in regards to how they valued the place (using comparables)

To give the numbers

I got quoted a sales price 290-315k, val came in 280k
I got quoted sales price 325-345k, val came in at 360k

Rents quoted for the 360k place (380-400pw) Which was accurate tenants just moved from 380 to 400pw

Rents quoted for the 280k place (280-300pw) which about 10-15% out, currently renting $340pw

Had some other good info in the report like replacement value of the house so i can update the insurance stuff.

Regards,

RH
 
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