Sworn Valuation Costs?

[Jfactory]

Hi, just wanting to know an estimate on what a "sworn valuation" would cost for a commercial property we are hoping to purchase. The property is being sold for around 350k and we need the valuation apply for the bank loan.

Any info would be fantastic. Cheers J

 

[RedCat]

I just had one done last week in Melbourne. It was for a property over $1M, but I don't think that was the reason for the high cost ($1400+GST), but because there's a lot more work in figuring out the value of CP

 

[Aaron_C]

Depends on the value but usually they are much more than residential valuations. expect $1k+

 

[Jfactory]

Thanks for the replies, the NAB gave us a quote of $2500 +GST for a sworn valuation. Seems very high? The property we are wanting to purchase for $350,000 has a value of the shire rates of around $680,000. When getting a sworn valuation can we chose our own valuer or do we have to use the one suggested by the bank? Sorry for all the questions, complete newbies
We are getting a very good deal on this commercial property as it is owned by a relative. It has a annual income of $71,000.

 

[RightValue]

I would expect it to cost between $1200 and $1800 + GST if it was in Melbourne.

Firstly decide on the lender, then find out a list of acceptable commercial valuers from them and ring around.

Also ask the bank people if they will apccept a valuation you order yourself as with residential many banks will not accepta valuation that is not ordered through their system - even if it is from a panel valuer.

I know that the costs seems high compared to a residemtial valuation but it is a full days work and commercial valuers get a lower percentage of the fee as income than residential valuers.

 

[Rolf Latham]

The property we are wanting to purchase for $350,000 has a value of the shire rates of around $680,000.

so the obvious answer for me is

dont worry about the cost of the val since its insignificant in the scheme of YOUR deal, worry about the $ on the valuation

ta
rolf

 

[Aaron_C]

Don't sweat over the cost of a valuation - it's just the cost of doing business....You can deduct it anyway.

 

[Bird Dog]

so the obvious answer for me is

don't worry about the cost of the val since its insignificant in the scheme of YOUR deal, worry about the $ on the valuation

ta
rolf

Rolf's on the money here (pardon the pun)...
Worry more about the numbers of the deal than the cost's involved.
On the surface, that deals looks pretty good with a cap rate that's well.. off the chart!!!
I know it does seem quite enticing but make sure you spend the right money getting the valuation done properly.
For a point of reference, our last CIP val was <1M, untenanted Melb Metro and cost $990.
It was what you would call a pretty straight forward val as the variables were fixed. When you add in a tenant, it adds a whole heap more into the mix as the valuer needs to study the type of tenant, their longevity in business etc etc. As others have stated, it's nothing like a resi valuation.

Speak with Rolf or another reputable broker and establish your lending criteria. Then start looking at lenders based on that criteria and then once you have that, start looking at valuation cost's.
And yes you can use other valuers however make sure that they are approved by your lender. Find out which ones are approved and then start ringing around.

Good luck

B.D

 

[Jfactory]

Thanks so much for the replies The higher cost may be due to the diversity of the property? (leases,tenants,size)

It is around 5 acres of land which consists of 5 large factory spaces and 2 residential units.

Two of the factory spaces are teneted at 5+5+5 and both units have recently renewed 2 year leases. We run our own business out of one of the factory spaces also.

With an annual income of $71,000 and the potential for another $20,000 with the other factory spaces being letted. We know it's a once in a lifetime offer, we just have to work out how to make it happen

It's all very daunting for us

Thanks everyone.

 

[RightValue]

Thanks so much for the replies The higher cost may be due to the diversity of the property? (leases,tenants,size)

It is around 5 acres of land which consists of 5 large factory spaces and 2 residential units.

Two of the factory spaces are teneted at 5+5+5 and both units have recently renewed 2 year leases. We run our own business out of one of the factory spaces also.



Thanks everyone.

Wow, that is a complicated property,

$2,500 is a cheap quote for that valuation.

I assumed it was a single building with a single tenant.

You have described 7 buildings (potential fror at least 3 commercial tenants), ascertaining the value of the residential dwelligns, dealing with planning issues, plus a large amount of additional land as either hardstand or potentially developable.

I would expect that such a valuation quote would range from $2,500 to $4,000.

It still sounds like a good buy none the less.

 

[Mick C]

Yep i was expecting a stand alone place as well....

Def sound like the right buy + since your using one of the space it make sense...

Regards
Michael

 

[Bird Dog]

With that many leases in place and such a diverse property, $2500 is pretty cheap I would imagine.

Good luck with it JFactory as it certainly appears (on the face of it) as though your relative is offering you a tidy deal.

cheers

B.D