valuation dissatisfaction



From: James Spiropoulos

Hello Everyone,
This is my first post on this great site,and wouldn't you know it,I'm asking for something!!I just had the results of a valuation by my lender suncorp,as they have 1st mort. over my house,and they have informed of the valuation of 600000.,an increase of 20000.,in the 10 months since the last one .I'm really peeved about the lowly amt,so can anyone tell me what options do I have so I can get on with my ip ing.
Thanks in advance to you for being here.
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Reply: 1
From: Sam Vannutini

Find out who their panel valuers are, and try another one.
You should also keep track of recent comparable sale in your immediate area. Make sure that you are home when the valuer visits.
Sadly, bank vals are often conservative.
Order the valuation yourself, and ask them to make it out to Suncorp. It may cost more,but if they know that it will be for the bank, you should pay the same price.
Good luck,
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Reply: 2
From: Rolf Latham

Hi James

Do your homework. If the val is truly low, ask for a diff valuer to be appointed.

If you dont get the results you want simply find yourelf a good independent broker and threaten to move. If that does not motivate your lender and you can get a better val on refinance (90 % of the time a refinance val is better, funny that)move


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Reply: 3
From: Michael G


In regards to homework, that's you putting together a folder of "evidence". Is this discrepancy a "gut feel"?, or do you have facts to back your claim?

Put together a folder of clippings and data of confirmed sales in your area (say last 6mths). Contact the data supplies and get a list of comparible sales, then drive to those addresses and take photos of the places that are similar to your home.

Stack the evidence in your favor.

Don't cry foul, and use those immortal word's made famous by a certain politician "I don't like it".

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Reply: 3.1
From: Dave :)

Michael G's right.

You have to do the work for them. The more evidence, the better. With
all due respect to the professional valuers out there, many that I've
come across when working in real estate had no idea. I recall at least
5 occasions where a valuer for the purchaser needing finance entered a
property that had just been sold. They ALWAYS asked me what I thought
the property was worth.
Their idea about the property value was often up to 10% under what the
comparative sales in the area indicated. I needed the contracts to
become unconditional and settle in order to get paid. So, of course I
pointed the valuers in the direction of four or five other similar
properties that had sold in the area, to prove that my estimate of the
property's true value was correct. It worked every time.

They are just a little conservative because their butts are on the line
if a valuation is far too generous. If you present 6 months or even 3
months evidence to a valuer, they'll be knocked off their feet and will
definitely take it seriously.


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Reply: 3.1.1
From: Mike .

Hi Dave and Michael,

I don't understand why you are encouraging us to do the valuers job for them. Would you do the same for an independent valuation paid by yourself? If so, what are you paying them for?

My instincts tell me that the bank's panel valuers ARE using comparative sales. How else do they arrive at a figure? They then probably factor in a margin of error which is more conservative if their client is a bank in the case of a panel valuation, or less conservative if you are their client in the case of an independent valuation. Why that is I don't know.

In conclusion, my main point is, surely valuers use comparative sales data in their bank panel valuations. It would be professional negligence not to do so.

It is interesting that when you confront them with hard evidence of your own suddenly you get a fairer valuation from them. Is the purpose of producing your own comparables, then, to "keep the bastards honest"?

Regards, Mike
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From: Dave :)


You are right - that's what they're SUPPOSED to do. Why does someone
else's hard evidence sometimes change their intended valuation? I'm at
a loss, other than to assume SOME of them are too lazy to do their job
properly. Unfortunately, my valuation in writing doesn't quite cut it
with lenders. So, I have to pay an independent valuer, even if it means
possibly doing some of the work to ensure I get the valuation I need.

Professional Negligence is probably a strong word. I'd say it's
Professional Laziness. Well, that's the opinion I formed when I was in
Real Estate and repeatedly asked by different valuers, "What do you
think it's worth?"

In an ideal world, life would be so less complicated...


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From: Robert Forward

I agree here with Dave

If you spend 3-4 hours or a whole day on doing the research and gathering information together and it achieves you an extra $10-20-30k in valuation is it worth your time...

My word it is.... Cause with that extra equity it may mean you can get to purchase another 1-2-3 ip's...

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From: Mike .

Hi Robert,

I also agree with Dave, but I'm also annoyed that we have to go to such lengths to get a fair go. Then when we have done the work we still have to call in a valuer because, as Dave says, the bank won't accept our evidence.

I think when Neil Jenman has finished cleaning up the RE industry he should do the same to Valuers. We have to get a fairer go from Valuers.

Final thought: could it be that panel valuations are generally lower than FMV because they factor in what the property would sell for at a Foreclosure sale? Presumably, something below FMV.

Regards, Mike
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From: Glenn Mott

Regarding the valuations that banks put on investment properties, how close to reality do the readers here think they are?

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From: Terry Avery

Don't forget the valuers are paid by the bank and if they stuff it up are
sued by the bank!!! It is not in their best interest to give a value close
to market value.
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From: Anonymous

Here are some facts on valuations:
Ever noticed that banks don't disclose valuations? They don't care as long as they have enough security to cover themselves.

Bank use valuers so that if they lose out, they can sue the valuers who have indemnity insurance. The bank's instuctions will be that the valuation is for mortgage purposes, and valuers tend to err on the conservative side.

Why? Firstly, it covers their backside.
Secondly, valuers get about 90% of their work from banks, and because they are paid so little, they just churn them out, sometimes doing 20 a day. This pressure prohibits them from doing a thourough job.

If they were to to do the job properly it would cost you at least $400. Sadly, market forces are at work here. You get what you pay for.

Finally, they use sales from the valuer generals office whic can be 3-6 months old.

By keeping track of similar sales for them, they will confirm with the selling agent, and give you a realistic figure.

Regarding doing the work yourself, it seems that many people want the money, but don't want to do the work. If you are serious about property, you should always have finger on the pulse with the market. Half an hour on Saturday will alert you to any properties for sale that may affect your equity position. This can make a difference to when you can buy your next property.

Hane I missed anything George?

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From: James Spiropoulos

I would like to thank everyone that took the time to set me on my way.It is really appreciated.
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