What Do Valuers Look For ?
- Thread starter jasminlei
- Start date
Hey Jasminlei!
Good question!
Part of the work of an agent is to meet the purchaser's bank valuer on site and show them through the property, and obviously it is within my client's interest if I can get the best valuation possible (so the sale doesn't fall over due to finance).
What do they look for? Simply the presentation and condition of the house. They look for any signs of structural damage, and assess the saleability of the property on behalf of the bank.
The main thing when meeting with the valuer is to know the area. Know the recent sales in the area, and know how and why these houses differed from yours.
The last one I did was for a friend. I met the valuer at their house (they were going for a reval) and I showed the valuer through the house. We talked about real estate in the area, and I pointed out little things that had recently been done to the house, and we discussed the recent major renovations.
Once the valuer was finished, we talked about property in the general area, and although she wasn't allowed to tell me what she was going to value the property at (the valuation belongs to the bank, and all that...) she indicated where she thought it would lie.
I disagreed with her, and told her why. I cited other recent sales in the area, block sizes, house sizes, house condition and when the sale was. We discussed the strength of the market, and fluctuations of sales activity.
Once we had finished, she had re-thought her initial range upward, by 30k!
The thing to remember is, that, valuers are generally really nice people (Have only met one who was an a******e! Out of literally dozens!). They are constrained by the fact that they, basically, underwrite the value they put on the property, in that, they swear that the property is worth what they say.
Theirs is not an easy job. Even though it looks as though they don't do much (walks around saying nothing!) there is a lot of work for them to do after the inspection. They still have to justify their opinion via recent sales in the area.
hope this helps.
asy
Good question!
Part of the work of an agent is to meet the purchaser's bank valuer on site and show them through the property, and obviously it is within my client's interest if I can get the best valuation possible (so the sale doesn't fall over due to finance).
What do they look for? Simply the presentation and condition of the house. They look for any signs of structural damage, and assess the saleability of the property on behalf of the bank.
The main thing when meeting with the valuer is to know the area. Know the recent sales in the area, and know how and why these houses differed from yours.
The last one I did was for a friend. I met the valuer at their house (they were going for a reval) and I showed the valuer through the house. We talked about real estate in the area, and I pointed out little things that had recently been done to the house, and we discussed the recent major renovations.
Once the valuer was finished, we talked about property in the general area, and although she wasn't allowed to tell me what she was going to value the property at (the valuation belongs to the bank, and all that...) she indicated where she thought it would lie.
I disagreed with her, and told her why. I cited other recent sales in the area, block sizes, house sizes, house condition and when the sale was. We discussed the strength of the market, and fluctuations of sales activity.
Once we had finished, she had re-thought her initial range upward, by 30k!
The thing to remember is, that, valuers are generally really nice people (Have only met one who was an a******e! Out of literally dozens!). They are constrained by the fact that they, basically, underwrite the value they put on the property, in that, they swear that the property is worth what they say.
Theirs is not an easy job. Even though it looks as though they don't do much (walks around saying nothing!) there is a lot of work for them to do after the inspection. They still have to justify their opinion via recent sales in the area.
hope this helps.
asy
If your DSR is OK and the only limiting factor for the loan is LVR, your bank would be happy if the valuation comes at the top of the realistic price range. So it is your (or the agent's) job to help the valuer to justify this value. A year ago I bought a Residex report for my house and researched recent sales in the area. Then I compiled the figures and left a brief report to the valuer who I couldn't meet due to other commitments. The result - they valued the property at $850K, which was $125K higher than previous valuation done by the same bank 2 months earlier (I didn't bother providing any input for the first valuation).
Say cheese
Lotana
Say cheese
Lotana
Many Thanks
We should be able to prove after 3 months of statements we are in a position to service the debt quite comfortably. My concerns are that they tend to devalue the property at the lower end of the scale I have heard. Not that it matters but it means we can purchase a house as aposed to a unit.
'It takes a long time to become a person - jj
We should be able to prove after 3 months of statements we are in a position to service the debt quite comfortably. My concerns are that they tend to devalue the property at the lower end of the scale I have heard. Not that it matters but it means we can purchase a house as aposed to a unit.
'It takes a long time to become a person - jj
Originally posted by Lotana
If your DSR is OK and the only limiting factor for the loan is LVR, your bank would be happy if the valuation comes at the top of the realistic price range. So it is your (or the agent's) job to help the valuer to justify this value. A year ago I bought a Residex report for my house and researched recent sales in the area. Then I compiled the figures and left a brief report to the valuer who I couldn't meet due to other commitments. The result - they valued the property at $850K, which was $125K higher than previous valuation done by the same bank 2 months earlier (I didn't bother providing any input for the first valuation).
Say cheese
Lotana
Following up on what Ruk said:
A good relationship with an agent is a big help here. It may take a while though to find that agent. But when you do, it's worth while, and it can be mutually beneficial.
This is an area where it is VERY good to have an agent on your side, and who know what you want to do. The agent will give you a realistic to optimistic value- if he knows you are using the price given as support for a valuation, and a valuation you are using to but a new property.
A good relationship with an agent is a big help here. It may take a while though to find that agent. But when you do, it's worth while, and it can be mutually beneficial.
HI all.
Great to see that someone on this earth actually think that agents can be usefull after all! It's always nice to be loved.
Some good points for preparing yourself for the valuer, including getting on side with a good agent.
We agents are a great source of useful information. This is despite the fact that probably 90% within our industry do not have a clue as to what they are doing.
The key is to find one who also has IP's (me).
As Grandma would say: You actch more flies with honey than vinegar. Same goes for good agents.
As meeting valuers is part of my work, I tend to arm myself with comparable sale, and delete the ones that do not help the cause.
When revaluing your own home, present it in the best possible way. It amazes me how many people don't do this.
If you don't existing equity, grab the Visa card and do a quick tart up job.
Also, be there when the valuer visits and be armed with facts and figures. This is where following the market pays off.
In Melbourne, I have found that APM (Australian Property Monitors) are a good source for sales data.
A generous rental appraisal is also very handy.
Love thy agent.
Cheers,
Sam.
King of the Karsal
Great to see that someone on this earth actually think that agents can be usefull after all! It's always nice to be loved.
Some good points for preparing yourself for the valuer, including getting on side with a good agent.
We agents are a great source of useful information. This is despite the fact that probably 90% within our industry do not have a clue as to what they are doing.
The key is to find one who also has IP's (me).
As Grandma would say: You actch more flies with honey than vinegar. Same goes for good agents.
As meeting valuers is part of my work, I tend to arm myself with comparable sale, and delete the ones that do not help the cause.
When revaluing your own home, present it in the best possible way. It amazes me how many people don't do this.
If you don't existing equity, grab the Visa card and do a quick tart up job.
Also, be there when the valuer visits and be armed with facts and figures. This is where following the market pays off.
In Melbourne, I have found that APM (Australian Property Monitors) are a good source for sales data.
A generous rental appraisal is also very handy.
Love thy agent.
Cheers,
Sam.
King of the Karsal
Sam,
It's good to find an agent who understands investing. Many do not.
My agent gives me optimistic but realistic appraisals on my properties. He understands why I need the value. The bank uses the appraisals as a guide, and discounts them- but generally does not require a full valuation.
In addition to giving an appraisal on my DHA property, he has also told me that the rent I'm getting is much lower than comparable local properties.
Another person had received a very low agency. When the agent questioned the valuer, the response was, "It doesn't really matter. The owner told me she's not going to sell the property anyway".
The agent put him straight, and the valuation came in a lot higher.
It's good to find an agent who understands investing. Many do not.
My agent gives me optimistic but realistic appraisals on my properties. He understands why I need the value. The bank uses the appraisals as a guide, and discounts them- but generally does not require a full valuation.
In addition to giving an appraisal on my DHA property, he has also told me that the rent I'm getting is much lower than comparable local properties.
Another person had received a very low agency. When the agent questioned the valuer, the response was, "It doesn't really matter. The owner told me she's not going to sell the property anyway".
The agent put him straight, and the valuation came in a lot higher.
The idea that the valuation is 'owned' by the Lender has always annoyed me a bit. Especially in the past where I clearly paid a separate fee for the valuation. If they want to 'own' it, they can pay for it!
I know that it is the policy of some Lenders not to release the valuation but I have always insisted they provide it.......and to date.....they always have. Even if it has been 'unofficially'.
I know that it is the policy of some Lenders not to release the valuation but I have always insisted they provide it.......and to date.....they always have. Even if it has been 'unofficially'.
Geoff.
I am surprised that your bank takes into consideration agent's appraisal, as most of us lie through our teeth!
Please provide deatils, as I amy use them to free up another new found $1,000,000 equity. Only kidding.
If it is a commercial property, then they may look at value in relation to rent, however I'm surprised that they may not require a full val.
The only reason that banks use valuers is because valuers have indemnity insurance, hence the banks can sue if something goes wrong, give or take a 10% valuation. Like LMI, it is merely a tool to cover their backsides.
Against this, valuers will tend to err on the conservative side to save their bacon. We poor suckers get the double whammy.
This is why I would advise investors to arm themselves with as much information (favourable of course) as possible.
I personally refuse to deal with any lender who will not disclose a copy of the val. Simple. After all, I'm paying for it. Disclosure means that I can disoute the val if necessary.
There have been times where this has been necessary.
Remember that valuers work like a Mc Donalds and rely on turnover to make a living.
Thus, their time allocation is minimal given the alloted number of vals to be completed asap.
This is inside info from a friend who is a valuer.
Cheers,
Sam
King of the Karsal.
I am surprised that your bank takes into consideration agent's appraisal, as most of us lie through our teeth!
Please provide deatils, as I amy use them to free up another new found $1,000,000 equity. Only kidding.
If it is a commercial property, then they may look at value in relation to rent, however I'm surprised that they may not require a full val.
The only reason that banks use valuers is because valuers have indemnity insurance, hence the banks can sue if something goes wrong, give or take a 10% valuation. Like LMI, it is merely a tool to cover their backsides.
Against this, valuers will tend to err on the conservative side to save their bacon. We poor suckers get the double whammy.
This is why I would advise investors to arm themselves with as much information (favourable of course) as possible.
I personally refuse to deal with any lender who will not disclose a copy of the val. Simple. After all, I'm paying for it. Disclosure means that I can disoute the val if necessary.
There have been times where this has been necessary.
Remember that valuers work like a Mc Donalds and rely on turnover to make a living.
Thus, their time allocation is minimal given the alloted number of vals to be completed asap.
This is inside info from a friend who is a valuer.
Cheers,
Sam
King of the Karsal.
Karsal,
I assume from my banker's comments that:
1. Appraisals from an agent are automatically discounted
2. A drive by valuation is done by the bank
The main property in question is a DHA property, five years into a nine year lease. As such, it's worth a fair bit less than comparable properties available to owner occupiers. That may add tothebank's comfortzone.
I assume from my banker's comments that:
1. Appraisals from an agent are automatically discounted
2. A drive by valuation is done by the bank
The main property in question is a DHA property, five years into a nine year lease. As such, it's worth a fair bit less than comparable properties available to owner occupiers. That may add tothebank's comfortzone.
