Was this a realistic valuation?

[Mrs Bird]

Hi All,

My neighbour needed a valuation for his rental property which is next door to our PPOR. I told him the sale price of other properties that were sold near our street and other valuations that other neighbours had received by banks.
Price range between 600k-710k for these other properties.(Similiar size, views etc)
The bank valuer came took one look at the house and said 440k.
He was not interested in other previous sales or valuations.

My question is...Did the valuer give a riduclous low valuation so the owner could not draw down on equity in his property. He is a low income earner and needs the money to keep the house. Can banks actually instruct valuers not to give realistic or very low valuations because they dont want to lend the client money? I am very curious...


Following on from this, does this mean that if we decided to value our house by the same bank, would we get the same valuation although our financial situation is totally different. Both houses are identical.


Thanks Mrs Bird

 

[rambada]

Its not the banks (though yes they can give the valuers policy nudges) but its the valuer.
Find out who else is on the banks board of valuers, speak to the local RE agents and find out who gives the best valuations. Pay for one and then take it to the bank. At the same time speak to 2 or 3 mortgage brokers and get the pot boiling.

 

[stargazer]

Hi Mrs Bird

I think that the banks do have some influence on the valuation. I am only basing this on my own experience.

I recently wanted a valuation done and the bank refused saying it was not 12 months.

I had to refinance due to part of my Fixed rate loan finishing its time. When the loan papers went to the respective area my PB was told that the LVR had to be shaved to 70% because it was innner city and more than three townhouses even if private rental.

To get around this, the valuation jumped $30000 even though my overall equity was reduced.

The values in these properties has actually reduced as they are having a hard time moving them at the price of $30000 less.

So figure it out it seems to stand out to me that yes they have an influence to suit what they want. At the same time keeping you as a customer not upsetting you too much.

regards
BC

 

[Lissy]

I've had "pressure" applied to valuations when I've had vendors leaving 20% in the deal as a 2nd mortgage. 2 lo doc lenders valued the houses at the sale price - 20%, and then only wanted to finance 80% of that.
Ouch!!

 

[Mrs Bird]

Hi Bonecrusher, Lizzy and Rambada...Thanks for your replies

After talking to a friend today who is very high up in the bank he told me that valuers are independent from banks...looks like that is it. I would be very interested in how he came to this amount.

Oh well, lucky we dont need valuations at this stage of the game.

Mrs Bird

 

[BUNDY]

Mrs Bird,

Valuers are commissioned by the banks. Yes they are "independant", but are certainly swayed by banks.

May I suggest that you commission a valuer yourself, provide them with market appraisals from recent sales in the area that are similar to your property and request that they put the valuation in the bank's format as it may be used. You do not have to advise which bank.

When obtaining the services of a valuer, it is worth the while to find out what valuers your bank uses/accepts. Obtain a valuation, then present it to the bank.

Find a reputable valuer which you financier uses and form a professional relationship with them. Can be one of your best assets.

Best of luck
Bundy

 

[voodoo]

I have always been under the impression that banks only value at approx 70% of the true value.

Real Estates over value to get the listing, banks undervalue to keep a safe buffer zone. so use an independant valuer for the true valuation.

Every time I have a valuation done by the bank it is approx 70% of what I believe i could achieve on the market.

Mrs Bird stated the Price range between 600k-710k for these other properties.(Similiar size, views etc)
The bank valuer came took one look at the house and said 440k.

440K is approx 70% of what she believes the market value is. approx 630k

cheers,