renovation, then what?

[Stockwhizben]

hi everyone, just say I do a renovation of kitchen, laundry and bathroom and spend say $50k on it.
As far as the value now going up, do I go to my bank and show them the receipts and say please give me a valuation of the property now i've done the reval so I can withdraw equity? Do I need to show receipts to the bank or does someone come around. As I should have a higher valuation placed on my place seeing as ive done a high end reno rather than a simple cosmetic one and so how does the bank differentiate bewteen people that come in and say ive do a reno please revalue. Do they want receipts, pictures, some one comes out to take a look from the bank.
Thankyou
Ben

 

[wylie]

Our loan broker told us that our son's renovation (happening right now) would not be valued immediately at his purchase price plus what he has spent.

He paid $550K and gutted horrible kitchen and bathroom. New ones are going in now and he will have spent $30K by the time he finishes - $20K on kitchen and bathroom and moving of walls and door, and $10K on asbestos removal and replacement with plaster.

$20K of that will be "seen", i.e. a brand new kitchen and bathroom. (Clearly the $10K on asbestos removal and replacement with plaster will make no "visible" improvement.)

However, if a valuer goes in four weeks after he paid $550K, even knowing he has spent $20K on things that actually improve the house (kitchen and bathroom), it apparently is doubtful the house would be valued at $570K.

This is even though it would (when finished) compare with other houses we looked at in the $580K to $610K range. Go figure...?

The plan is that in three or six months, he will try for a full valuation, not rely on a drive-by valuation or on the contract price, and he can then pull some money out to repay some private debt to us (we settled for him so we are his "bank" until he refinances).

 

[mumbai]

As I should have a higher valuation placed on my place seeing as ive done a high end reno rather than a simple cosmetic one

The valuer seldom sees that way. Your simple cosmetic reno, that is more visible, could make your house more 'valuable' than the high end reno.