Valuing an off the plan purchase

[fbc10]

Hi all,

I have had commbank come back to me and tell me that the valuation company have not been able to value my off the plan purchase. It is 3 months away from settlement and the properties are reselling for 40-50k more than purchase price. They have stated the property can only be valued on completion. This is not ideal for me as I would like to minimise the LMI I have to pay and I am afraid that once valued, valuation=purchase price.

I would have thought that the valuation would be quite simple and would be based on MV? i.e. value of properties currently being bought and sold

Anyone have experience in the above?

 

[Propertunity]

Have a read of this thread: http://www.somersoft.com/forums/showthread.php?p=641258

After that, google: site:somersoft.com "RightValue" "OTP" for more discussions on the subject. RightValue is a valuer.

 

[Token Funder]

Hi all,

I have had commbank come back to me and tell me that the valuation company have not been able to value my off the plan purchase. It is 3 months away from settlement and the properties are reselling for 40-50k more than purchase price. They have stated the property can only be valued on completion. This is not ideal for me as I would like to minimise the LMI I have to pay and I am afraid that once valued, valuation=purchase price.

I would have thought that the valuation would be quite simple and would be based on MV? i.e. value of properties currently being bought and sold

Anyone have experience in the above?

There's a long and colourful history with a lot of games having been played with OTP purchase so it is often the case the valuers are reluctant to chance their arm until they can be confident that sales resuts reflect a genuine market position.

It's best to assume the best-case scenario is it will be worth what you contracted to pay and build your busnes case around that. Anything on the upside should be thought of as an unlikely, but welcome, free kick.

 

[RightValue]

That reply for the person at CBA is complete crap.

I do Off The Plan, or To Be Erected Valuations for CBA all the time. I have done literally thousands of them in the past for various lenders and to labour a point, I have done a couple for CBA of both apartments and houses in the past week.

The only way I would not be able to do it is if the following were not provided.

Floor Plan showing the floor areas and, preferably (but not essential) plan showing location in the building and;

Specifications not provided, that is schedule of fixtures and finishings. That said I have done them without these in the past.. just made assumptions about finishing (they are pretty much all the same).

The CBA, apart from having a pathetic back office, are paperless, they more often than not expect me to value an Off the Plan Purchase with no more than an address supplied ... I really do need a floor plan and specifications. Their staff seem very perplexed when we ask for such details... apparently a purchase price and an address of a currently non existant property should be enough .. well according to their back office staff.

cheers

RightValue

PS Propertunity, thanks for thinking of me.

often exp

 

[Kanemicm]

I had a similar experience with one of my developments and it was with CBA as well

 

[Mick C]

Hi all,

I have had commbank come back to me and tell me that the valuation company have not been able to value my off the plan purchase. It is 3 months away from settlement and the properties are reselling for 40-50k more than purchase price. They have stated the property can only be valued on completion. This is not ideal for me as I would like to minimise the LMI I have to pay and I am afraid that once valued, valuation=purchase price.

I would have thought that the valuation would be quite simple and would be based on MV? i.e. value of properties currently being bought and sold

Anyone have experience in the above?

As rightvalue said...just provide the valuer with a bit more details or ask the selling agent to provide a list of "comparative" in the last 3 month ...this would help them determine a price.

I alwasy get a list of comparatives that i send thru to the bank before i go ahead with any of my clients valuation- it helps that's for sure!

Regards
Michael

 

[Marty McDonald]

At least CBA will now allow vals for otp purchases up to 3 months before completion not like lots of other lenders who want it post strata plan being issued ie 2 - 4 weeks before settlement!! That's fun.