satellite valuations

[Pete]

It was mentioned to me by a contact at HSBC bank that from March '05 they will be using "satellite" valuation of properties.

I do not know what this is but assume it is something like the database interrogation and accompanying aerial photos that I've seen in the RP Data software. One can filter/search for other sales in the vicinity within a date range, price range, number of bedrooms, etc, etc. I was extremely impressed when I became aware of the power of the software.

I'm told they will be second bank to take this approach after Commonwealth.

Drops the valuation cost from $205 each to $80 each and reduces up-front loan costs - as are compared when consumers are deciding which lender to choose.

Valuers will lose a lot of business. The valuers seem to me to do a fine job at a very reasonable price.

I will be revauling some houses in the first half of this year and have a choice of revauling before March or in March. I will go for the earlier period as I want to use the valuers. I feel that for some of the houses being very close to the beach, the valuer will better account for this and the other unique characteristics of the houses; I don't know if the satellite method will. I guess it depends on the skill of the user of the software.

I would appreciate comments from others on their experience with, or knowledge of, satellite valuations?

 

[Aceyducey]

So a fly-by rather than a drive-by.

Well if HSBC believes they're not increasing their risk by doing this, good for them!

I don't anticipate all the banks taking this approach in the long term.

Cheers,

Aceyducey

 

[BUNDY]

I don't see how a satellite valuation could possibly do justice to anyone's property (apart from vacant land). Particularly someone who has just fully rennovated the interior of their home.

I'd rather pay for a proper valuation and accompany the valuer through the place and ensure I'm actually getting what I paid for - not just a quick scratch of a pen.

Show the valuer what you have, talk to them about comparable properties and prices. Obtain a good and fair valuaton, not a snapshot one. Get what you pay for. An extra 20, 30, 50 or 100K in equity can mean a lot over a few properties. - better than saving $120 per valuation.

Besides - if it is an investment, you can claim the valuers fee on your tax.

BUNDY

 

[brahms]

comm bank maintains its own database of sales - so if a property is to be financed by cba and x amount of sales are already in the system then the no val policy may apply.

in my experience this only occurs when the property is on contract, no related parties and thru a realtor.

it includes mortgage insured loans as well as non MI'd

 

[Jacque]

I'm with Bundy here. As well as renovated interiors making a huge difference to values (think kitchens, bathrooms, smart sound integration etc) what about landscaping, pools etc?
There will always be a need for valuers to do the groundwork and look inside most properties.

 

[chook]

I will live in hope that this method of valuation is more accurate than bank valuations. I have never been happy with the valuations the finance providers have done for me. I understand that the finance providers are conservative but some of the valuations have been ridiculous. And when I have sold the properties at my valuation and proved them wrong, I can't then go to the bank or valuer and say "Ha Ha I told you so" - what's the point. I just wish they would get it right in the first place. One of my friends went through the process of complaining to the Valuers Licensing Board providing evidence supporting their opinion and the valuer in question provided a revised valuation but who wants to go through that every time - not me.

 

[kissfan]

Big Brother's always watching

Regards
Marty

 

[BUNDY]

Chook,

I'd suggest you change your valuers and work on having a good relationship with one. They can be your best asset - not your worst.

Satellite valuations are not going to be the answer you are looking for if you want a good valuation.

Property investment is not just about the money - it's about good business relationships with all parties - Banks, Valuers, ccountants, Real estate agents, tenants etc.

Anyway, Best of luck - let us know how you go with your satellite valuation. Interested to see how it fares.

BUNDY

 

[Fester]

I have had good and bad experiences with valuers. The worse I had was a valuation for a property at Pacific Pines on the Gold Coast. The big bank valuer phoned me personally a few times because he couldn't find the property and the first time didn't even know where Pacific Pines was, and he came from the Gold Coast! (true story). He then gave me a lecture on the pitfalls of "two tiered marketing" and the dangers of interstate buyers and Gold Coast property. I had already been up there and done my own research of this property and the area. The valuation came back around $40K less than the asking price! (I often wonder if he even went to inspect the property). I had other properties on the run at the time so couldn't be bothered and dropped this one. The same property is now worth around $120K more than the asking price at the time. So much for some valuers!!

 

[quintets]

Chook,

It's got little to do with the actual value of the property and everything to do with the Bank cutting internal costs. It means the value of the property is just an estimated number to suit the banks needs. And the bank's needs on that number are different from your needs for that number.

I recall an AFR article some months ago where APRA or RBA expressed concerns about CBA's decision to use "desk" valuation. Maybe a "fly-by" valuation is their way of answering the question.

I agree with Bundy. Develop a good relationship with a valuer on the Bank panel because you need to control that part of the finance side.



Jireh