Revaluations

[Steve KKK]

I am currently thinking of getting revaluations on both my PPOR and IP.

My PPOR is in an mid to inner suburb of Canberra and we had two RE Agent valuations recently of between 300-320K and 375-385K. Not bad considering I bought it for 157K back in '95.

My IP is in a bayside suburb of Brisbane (near Cleveland). Bought it off the plan in Sept 2000 for 267K. No idea of what it would be worth today.

My question is: how should I go about getting the revaluations? Should I find out from my lender who they will accept a valuation from and then arrange the valuation myself or should I get the bank to arrange the valuation?

I tend to think that the first option would be in my better interest as I would be the one paying for the valuation and therefore I can do what I like with it. If I leave it up to the bank, I may not get the full picture.

Thoughts please.

Steve K

 

[Rolf Latham]

Hi Steve

Much depends on what you wish to do with the reval ?

Get a stockpile of borrowed cash for a rainy day ?
Curious ?
Purchase another IP ?
Purchase another PPOR ?

These are important considerations depending on the outcome you want.

If you require all the possible equity you can get your hands on to buy as much IP with 90/95 % lends out of the equity then you may have to actually manage the process. That is get as much data to support your numbers as possible.

ACT property - www.allhomes.com.au will give you a good guide of properties recently sold around yours. You can use the output to wear out some shoe leather and get a very good estimate of comparative prices of the market for YOUR property around 3 to 6 months ago.

QLD property. www.residex.com.au and home price guide will provide similar data for a few bucks.

It will also pay you to get to some agents to get recent reported sales, since the above types of data are 3 to 4 months old at best.

Managing the valuation process is one of the most valuable things you can do after buying well. Many of my clients have benefited enormously from a few hours work to get a full understanding and better knowledge of the local market than any valuer.

Also, understand that valuers are usually contracted to the lender, not the lender's employee, hence they must provide a reasonable true market guide. Having said that, the biggest difference in valuer opinion I have come across is Valuer A saying an Eastern Subs 5 bed terrace is worth 750, Valuer B says 1.25 mill, and 3 agents saying 1.3 to 1.4.

Too many people underestimate what 20 000 in extra valuation TODAY could be worth to them.

Try a 250 000 IP if your serviceabiity is good.

Expect to pay 350 to 500 for each val on a sub 500 k property.

If you do your homework you can usually save the above and let the lender's valuer have a go using your information which you provide to them at inspection time.

Ta

ROlf

PS You only get what you ask for !

 

[StevenO]

If you do your homework you can usually save the above and let the lender's valuer have a go using your information which you provide to them at inspection time.

Rolf,

What about the Westpac bank panel valuer I spoke to who wouldn't do a 'bank' valuation on my property unless they were instructed to do so by the lender? I asked them if I could pay for the valuation and have it addressed to the lender but they refused. What's the difference between a 'bank' ordered valuation and one that I order?

I was hoping to present the valuer with my own research and sales evidence at some time in the future when I go to revalue, but to do so I'd probably have to pay for my own valuation first - and then have the lender instuct them to do another valuation for refinancing (unless I find out when the bank will contact them and get to them with my info before they can complete the valuation).

Maybe the valuer is a bit more conservative when it comes to 'bank' valuations than he is for individuals. So if I pay for my own valuation first then he shouldn't be able to give me a lower valuation when he values it again for the bank.

Has anyone come across this before, or is it just the valuer who wants to be paid twice for the one val?

 

[Rolf Latham]

Hi Steven

Tis a very common issue.

What you can do is the following, and this works with "most" lenders, and we have succesfully done this Westpac panel too.

You use the panel valuer, commission them, and note you will pay 2-3 times what the lender will. The instruction must be for "mortgage purposes", and make them aware of what lender will be used.

Some valuers will for a small sum of say $ 100 then change that valuation to be addressed to for example to the NAB. In the case of Westpac though, they will order their own valuation from the panel valuer. I have never had a different result between what the panel valuer gives the "owner" and the lender in that instance. Slow and cumbersome but YOU have control.

Also, understand that poor vals can be challenged and in 2/3 of cases they are reviewed in the borrowers favour. In some instances even the lender will say this val is poor, and over ride the panel valuer, believe it or not, the most recent being a review from 140 to 150 k on the gold coast based on borrower supplied data.

Ta

Rolf

 

[StevenO]

You use the panel valuer, commission them, and note you will pay 2-3 times what the lender will. The instruction must be for "mortgage purposes", and make them aware of what lender will be used.

That was the problem I was having - the valuer said he wouldn't do a valuation for "mortgage purposes" unless the instruction came from Westpac.

He said if he was commissioned by me then it wouldn't be for mortgage purposes. I questioned him about this and asked why some other valuers do it. He said it's just the way it is and was very unhelpful.

What's the difference?

 

[Rolf Latham]

Hi Steven

The valuer must have been a very precious soul. A few of them are. Mostly they are like you and me though - mere normal people.

ta

rolf