Valuation before contract signing?

Discussion in 'Property Investment - Other' started by Bandita, 6th Sep, 2008.

  1. Bandita

    Bandita Member

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    Hi all,

    Has anyone ever gotten a bank valuation done before signing a contract?

    If so, and the valuation comes higher than the price you end up signing for - will the bank still honour the original valuation (eg. for LVR purposes)?

    You would obviously need to pay for the valuation - and use a valuer the bank you want finance from uses......anyone ever done this?

    Thanks :D,
    Jen
     
  2. The Y-man

    The Y-man Member

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    If you want to try, I am trying to get hold of a valuation that has just been done on a property I am selling (as I have just got it refinanced). I am willing to sell UNDER this bank valuation :eek: :D

    Cheers,

    The Y-man
     
  3. tiger

    tiger Vegetarian tree hugger

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    I always get a valuation before signing (well actually going on to our 3rd valuation now and haven't signed anything yet) and we did this after putting an offer in so I think the bank knew what we were offering (all done through broker), either that or they are psychic because the valuation has always come back at the exact same price we are offering.
     
  4. Bandita

    Bandita Member

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    Yes, it's funny that way, eh? ;)

    No, I'm wondering about getting a valuation done before putting in an offer - make the valuers actually work for their money :p - but I'm wondering if the bank will still honour the valuation if the offer and then contract signed price are less than the valuation??

    Any experience on this is welcome :D

    Cheers,
    Jen
     
  5. Qlds007

    Qlds007 Broker,full time investor

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    Jen

    Any lender will only lend against purchase price or valuation whicever is the lower. Also you lender will only accept a valuation report assigned to them in their orescribed format.

    Only benefit i can see is that you have an indication of the purchase price to base your offer on. If course in saying this if the vendor accepts a contract with someone else then you have spent money for nothing.
     
  6. Bandita

    Bandita Member

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    Thanks, that's what I suspected. Always thought those stories of people purchasing a bargain, getting a higher bank valuation which the lender lends against and hence having enough funds at settlement to cover all the costs, etc were very unlikely.

    Still might be a useful exercise though in certain circumstances.

    Cheers
    Jen
     
  7. boomtown

    boomtown Member

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    In defence of the banks - an excellent indication of a property's true value is what an arms length seller and buyer are willing to trade it at.