Valuation time

[Logan]

SS'ers

I am up for my first valuation for my PPOR soon to extract equity and I am wondering if there is anything to increase the valuation. Alternatively are there cosmetic issues that would negatively lower the value ? What types of things are taken into consideration ? Will the valuler only look at the outside or inspect the interior of the house ?

I still have a few more unrenovations to do (the house I bought was badly flipped by the previous owner and I have been untangling the mess for years), they are split between hidden issues like structural work and cosmetic patching jobs and obvious value adding features like upgrading a third bathroom (crazy), replacing a deck and structural landscaping.

I am still undecided if I should do all the works, I might do them long term but right now don't really have the time or motivation. If any of these works would significantly increase my valuation then I might get motivation.

 

[Rolf Latham]

In our experience THE Most important thing is the flexibility to valuer shop.....

Typically that means being able to move lenders if and when required.

So minimise lmi and fixed rates if that's an option

Very very common to get spreads of 40 to 100 k on normalish properties.

For those that are equity bound, the net present value of a 50 k better val can be 20 x plus the val difference over a property cycle or 2.

val shop is a useful solution if you have truly Been hard done by With a rubbish val

Ta

Rolf

 

[bumblegoodie]

In our experience THE Most important thing is the flexibility to valuer shop.....

Typically that means being able to move lenders if and when required.

So minimise lmi and fixed rates if that's an option

Very very common to get spreads of 40 to 100 k on normalish properties.

For those that are equity bound, the net present value of a 50 k better val can be 20 x plus the val difference over a property cycle or 2.

val shop is a useful solution if you have truly Been hard done by With a rubbish val

Ta

Rolf

Could you please explain what you mean by Val shop? is this a val broker?

 

[Rolf Latham]

Could you please explain what you mean by Val shop? is this a val broker?

For any given property you can probably get 3 to 4 lender Val's from different valuers.

Some bankers and many brokers can manage it

Ta
Rolf

 

[Redom]

For any given property you can probably get 3 to 4 lender Val's from different valuers.

Some bankers and many brokers can manage it

Ta
Rolf

With Rolf - think of it as 'diversifying' your valuers.

Each valuer may have a different opinion. Being able to get a few valuations done, and being flexible to switch lenders (eg not in LMI category, etc) are best ways to maximise the amount of equity to get out.

Cheers,
Redom

 

[alicudi]

Hi

How can someone like myself learn a little more about valuer shop? Do they have a website?

I always like to research things myself without wasting other peoples time so don't want to ring up a broker asking about it.

Regards,

alicudi

 

[Redom]

Hi

How can someone like myself learn a little more about valuer shop? Do they have a website?

I always like to research things myself without wasting other peoples time so don't want to ring up a broker asking about it.

Regards,

alicudi

Hi alicudi - it just means ordering 3-4 valuers. When brokers order a valuation, the valuer is picked at random. Therefore, if you order 3-4, you're likely to get different valuers. Each valuer may have slightly different views on the property worth, which makes a difference to the amount of equity you can pull.

Hence the term, 'valuer shop'.

 

[alicudi]

Hi

To: Redom

Thanks for that explanation.

May I ask who then pays for the 3 to 4 valuations? And would this mean the property would be inspected by 3 or 4 different valuers?

Regards,

alicudi

 

[Logan]

Hi

To: Redom

Thanks for that explanation.

May I ask who then pays for the 3 to 4 valuations?
Regards,

alicudi

I think the bank pays for the valuation ?

 

[Corey Batt]

Generally when 'shopping' valuations you use free upfront valuation lenders (which most are these days).

 

[Rolf Latham]

May I ask who then pays for the 3 to 4 valuations?

ultimately we all do................

ta

rolf

 

[alicudi]

ultimately we all do................

ta

rolf

Hi

Thanks for your reply Rolf.

Ok, when you say "ultimately we all do" are you referring to the client looking for finance?

So if a client informed his broker he only wanted to use the services of a single valuer the client would save on fees obtaining finance? Versus a client that would be prepared to pay extra for several valuations from valuer shop?

And then comes the issue if a vendor has a property for sale do they then need to allow 3 or 4 different valuation firms to inspect the property if the purchaser's broker is using valuer shop?

I am just trying to understand this all from the clients point of view, the valuers point of view (I am currently about to start my 3rd year at uni as I am studying a degree that allows one to become a valuer) and also trying to understand this from a banks point of view and their risk evaluation process and policies which I have just been given a big insight into thanks to a contact at the Bank of Melbourne.

Regards,

alicudi

 

[Redom]

Hi

Thanks for your reply Rolf.

Ok, when you say "ultimately we all do" are you referring to the client looking for finance?

So if a client informed his broker he only wanted to use the services of a single valuer the client would save on fees obtaining finance? Versus a client that would be prepared to pay extra for several valuations from valuer shop?

And then comes the issue if a vendor has a property for sale do they then need to allow 3 or 4 different valuation firms to inspect the property if the purchaser's broker is using valuer shop?

I am just trying to understand this all from the clients point of view, the valuers point of view (I am currently about to start my 3rd year at uni as I am studying a degree that allows one to become a valuer) and also trying to understand this from a banks point of view and their risk evaluation process and policies which I have just been given a big insight into thanks to a contact at the Bank of Melbourne.

Regards,

alicudi

Valuations do incur a cost for the lender, but MANY lenders don't charge the customer this fee. Its basically competition in the mortgage market working.

However, given it increases the cost of doing business for lenders, it is naturally fed through into their pricing models. While its not a set fee, 'we all ultimately' pay by paying higher rates.

Cheers,
Redom

 

[Erin Woods]

Valuer shopping

Don't a lot of banks use the same valuation companies?

When it comes to inner Sydney, Torrens title properties the 'value' can vary by $100-300k at auction or by private treaty at the upper price ranges (1.3m plus).

Is it possible to order 3 to 4 separate upfront valuations with different lender for an equity loan that will not be influenced by a previous valuation?

 

[Erin Woods]

If multiple valuations are order- what is the widest variation you have seen?

 

[Redom]

Don't a lot of banks use the same valuation companies?

When it comes to inner Sydney, Torrens title properties the 'value' can vary by $100-300k at auction or by private treaty at the upper price ranges (1.3m plus).

Is it possible to order 3 to 4 separate upfront valuations with different lender for an equity loan that will not be influenced by a previous valuation?

Depending on the lender, valuers are chosen at random. Most lenders use 3-4+ valuers.

Also, its less about the valuation company and more about the particular valuer.

I have seen 15% variations in vals for the same property, a 50-60k range. Not uncommon to see 100k+ variances for high value properties.

 

[Jamie M]

If multiple valuations are order- what is the widest variation you have seen?

From memory it was around $150k

Biggest for an off the plan was around $90k

Cheers

Jamie

 

[Logan]

Thanks guys for the great response however I am still none the wiser about the type of things taken into consideration ? Bathrooms, bedrooms and car parking spaces or condition of the property and landscaping or location ?

 

[Rolf Latham]

If multiple valuations are order- what is the widest variation you have seen?

28 % on one property across 3 valuers in 1 week

ta
rolf

 

[Rolf Latham]

Thanks guys for the great response however I am still none the wiser about the type of things taken into consideration ? Bathrooms, bedrooms and car parking spaces or condition of the property and landscaping or location ?

location and comp sales

unless your amenities are lower than the existing comparable standard spending 50 k on bath and kitchen may not add more value than the cost to produce same.

A reasonable way to gauge is to find what has sold in your area in the last 90 to 180 days and see how that compares to your stock

ta
rolf