Valuation came exactly as the offer ..

Twice in a row for different properties, I put an offer and it got accepted. The valuation came exactly the price I offered.

The first property was my PPOR bought last year and when I got the valuation done this year (with almost no reno or changes done to the property), the valuation was +10K

The second one is an IP and I got it for almost the land value, but the valuation came at the same price I offered.
Is that normal?
 
i recently bought a property significantly under market value and still the idiot valuer came back at purchase price. This is definitely normal.
 
i recently bought a property significantly under market value and still the idiot valuer came back at purchase price.
That's all he can do, or he risks being called an "idiot" by the lender he's working for, for valuing $10K above what someone just purchased for.
 
98% of the time the valuer will value the property at what you purchased it at.

Why? Not sure? But my guess is that they see market value a being what someone was willing to pay for it... thats what you just did, therefor thats what its worth.

Im the same, purchased property at auction, $30k less then an identical designed house, in slightly better condition. Still valued at my purchase price.
Mind you bet if I got it revalued after paid and flooring it would be worth ~$20k more then I purchased it for.

If you strongly believe that you have purchase below market value, find properties that are of the same standard at a higher price that you believe they are worth. Make sure your bank/broker attaches they properties on the valuation request so they are compared.

Works sometimes, othertimes it doesn't.
 
That's all he can do, or he risks being called an "idiot" by the lender he's working for, for valuing $10K above what someone just purchased for.
no one is talking 10k

this was bought for 632k, a retainable block with 2 x 2x1s on it. land value alone excluding improvements was just under 700k, he undervalued it by over 100k which im pretty comfortable saying considering someone offered me that (verbally) barely 2 months later

i read the valuation, he simply worked backwards from the purchase price to come up with a valuation for the land that was waaaaay under and improvements that he actually overstated.

if blocks were really as cheap as he claimed i would be buying a whole lot more, they are impossible to buy at the values he claimed.

i recognise it was a slightly harder one to value than normal but he was way off, i stand by the idiot comment
 
no one is talking 10k

this was bought for 632k, a retainable block with 2 x 2x1s on it. land value alone was close to 700k, he undervalued it by over 100k which im pretty comfortable saying considering someone offered me that (verbally) barely 2 months later
As I stated before this would happen, 98%... actually more like 99.5% of the time.

Im assuming it didnt effect the deal, otherwise you would of went back to the bank/broker and got them to dispute the valuation
 
As I stated before this would happen, 98%... actually more like 99.5% of the time.

Im assuming it didnt effect the deal, otherwise you would of went back to the bank/broker and got them to dispute the valuation
i needed to push it through as had made a cash offer with a long settlement months before then so did not dispute.
 
if blocks were really as cheap as he claimed i would be buying a whole lot more, they are impossible to buy at the values he claimed.

i recognise it was a slightly harder one to value than normal but he was way off, i stand by the idiot comment
I get this aswell, it very annoying how they split the land and improvements.

I had a valuation for a construction loan come back, the valuer valued the land at $145k. Client purchased the land 2 months before for $149k.
Funny thing was, exact same valuation company who completed valuation for first loan and they obviously valued the land at $149k for original land loan.
This is obviously being disputed as we speak :)
 
i recently bought a property significantly under market value and still the idiot valuer came back at purchase price. This is definitely normal.
Well.. No one else is willing to pay any more. Then how can a valuer go anything beyond that sale price?
 
Well.. No one else is willing to pay any more. Then how can a valuer go anything beyond that sale price?
the valuer can go beyond that sale price by doing his job, which is to value the land correctly. he put the value as $520/sqm when comparables were $630-680, without even taking into account the fact that the existing properties could be retained.

as mentioned before, this was a property that had been on and off the market for a long time and i had bought it a while back (late last year) with a longish settlement.

have a look at retainable development sites in maylands, if you can find any for $520/sqm ill happily pay you $600/sqm and you can keep the balance as a finders fee
 
i recently bought a property significantly under market value and still the idiot valuer came back at purchase price. This is definitely normal.
The argument could be made that you bought it at market value, given the price paid was what two groups agreed on at a specific point in time, thus defining what the 'market' was willing to pay.

It's very rare for a valuation to come back higher than the price paid. When they do there's usually some unusual factors such as an extended settlement or a sale between related parties.
 
The argument could be made that you bought it at market value, given the price paid was what two groups agreed on at a specific point in time, thus defining what the 'market' was willing to pay.

It's very rare for a valuation to come back higher than the price paid. When they do there's usually some unusual factors such as an extended settlement or a sale between related parties.
that argument could certainly be made, and is often made, but like a lot of sweeping comments such as property prices will increase/decrease this year by 15% etc, is often incorrect when applied to individual deals.
 
i must admit im surprised that people believe valuers are infallible. just like every profession there are the good, average and incompetent. in this case i got the incompetent.
 
ultimately it is not the end of the world as im developing the site and will start selling in 6 months or so but the extra cashflow from a proper valuation would certainly have come in handy
 
The second one is an IP and I got it for almost the land value, but the valuation came at the same price I offered.
Is that normal?
As the others have mentioned - it's normal.

However, I've had vals where the comments (in my mind anyway) suggest that it may be worth a bit more than the purchase price.

Cheers

Jamie
 
i must admit im surprised that people believe valuers are infallible. just like every profession there are the good, average and incompetent. in this case i got the incompetent.
I don't believe they're infallible. I've seen hundreds of examples where two valuers have substantially different results, or a valuation is performed and shortly afterwards the property sells for significantly more than the valuation. I've deal with valuers who have indicated one thing verbally and written down something else. Many years ago one of my own IPs grew hardwood floors and an extra toilet (I didn't compain about that oversight).

I do know for a fact however that they'll use the lower of the purchase price or their opinion. Even if the valuer enteres a higher figure, almost every lenders policy is to take the lower of the purchase price or the valuation.

I also know from bitter experience that convincing a valuer to change a result after they've made a decision is extremely difficult. If LMI is involved, it's often a pointless exercise anyway becuase lenders are generally instructed to use the first result by the insurer, regardless of the amended price or the reason for it.
 
fair enough.

yes LMI was involved which is another reason i did not dispute, was not worth losing the deal over it.
 
im developing the site and will start selling in 6 months y

I am not saying that the valuer is right, they may well be wrong but since this appears to be a development site.......

You do realise that the valuer must disregard any development potential in the property?

Many a time I have valued a property that has development potential way below what it has sold for or when doing a refinance valuation what it would sell for.

I insert the something along the line of the following in the refinance valuations.

"The property offers good development potential however in accordance with standing instructions I have ignored this potential and valued the property as a single dwelling site. There is a high probability that if offered for sale the property could achieve a sale price significantly above this valuation figure reflective of the development potentiial".

Valuing a property $100k above contract price when the property has been on and off the market for a while (good exposure to the market) unless there is a long settlement in a rising market or a patently anxious vendor is seen by many valuers as just sheer suicide if something goes wrong.

I have done iit in the past but would be hesitant in the current market.

For example today I inspected a proeperty that has just sold for $315k. I looked at my sales evidence before inspecting. The sales evidence said $330k to me and that is what I would have valued it at had it been a refinace valuation. I talked to the agent. He had appraised it at $320-$340k, thinking it was worth $330k apparently.

He could not get any interest in the property above the sale figure despite good exposure.

The market its not strong, relatively steady but not strong. The market has spoken. The sale price is well supported by market sales evidence. The market is not perfect and neither am I and I do not make the market, I merely interpret it.

Given that a lender will only use the lower of valuation or purchase price think I will increase any risk by saying the market is wrong and I am right and value it $15k higher?
 
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