Valuations

From: Apprentice Millionaire


At last, after all the HIH problems have been sorted out, I am settling on my first IP.

Valuation was done for the bank, and it came spot on the purchase price. I am told this is good by my contact at the bank. I.e. the valuation could have come lower, I guess.

So as the property hopefully increases in value, how does one go about getting a new valuation? Do I call the bank's valuer (I know who they are) and ask them to do an independent valuation that the bank might accept, or do I just call the bank and tell them to do a new valuation?
Also, how soon should I be concerned with this step? In 6 months time? In a year? I guess it is dependent on the market, but as I am learning, I would appreciate opinions, advice, suggestions, recommendations, pointers, information, anything (and I promise I will not sue! :)

Cheers
Apprentice Millionaire
(aka Jacques)
 
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From: Ian Douglas


Hello,

I'm not an expert , not even a novice.
But you can take this or leave it,

I am concerned with valuations that banks do, that come back at the purchase price.
I would ask to see the report , I believe you have a right to see the report if they don't want to give it to you.

-I would follow up with further investigations, such as the dept of natural resources if you are in Qld,( or similar dept in other states) I would be surprised if it cost more than $10, and you can find out what the previous owner purchased the property for.

-Find out from the Council what the Unimproved Council value UCV is for the land, this can be surprising. add up the price of the house construction, extras, fence, pool,landscaping etc see if you are ahead.

-Look into websites that give you search capabilities to find out the prices of other houses/units (or whatever) in the area.
www.confirm.com.au is one

-I'm sure that heaps of readers know of other websites that can help here.

-If your IP is brand new, talk to some other new owners in the area, ask them what it cost them ? don't brag if you got a great deal, (how to loose friends and not influence people)

-I rang up my bank, as I am going to refinance my home loan, I asked them for a copy of the valuation, to which they replied, oh, we didn't do one, we just had someone drive past to see if it was there.
So their valuation is the purchase price.
That's lovely isn't it. Ever since that I have been learning as much as I could about this area, so much to know and where ever you go, you will find out the fair market value of a property is all RELATIVE,
to the lender, the buyer, the seller, the real estate agent,the valuer, the council who will take away your house and land if don't pay rates (who REALLY owns real estate or royal estate as it was derived from) and sell it to cover the costs of the lost rates.

At the end of the day is it putting money in your pocket ! is it an income producing assets. Will it still be standing in 20-30 years, and do you have good tenants ?

So many factors make your investment worthwhile, so if you find that you haven't purchased it for the best price, it doesn't matter, it is how you deal with it from there that makes it profit or loss.

I know I've sort of gone off on a tangent, but seeing though no one had replied, I though I'd get the ball rolling.

Last and final thought, I trust banks as much as I do real estate agents, or even car salesmen (having experience that myself),or any salespeople, they are good at what they do and that is creating business for themselves, just be wary of the banks so called valuations as well.

I'm sure you are wise to these things, but maybe others might want to know

All the best
Ian
 
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