Why are Valuers secrative
- Thread starter frehnejc
- Start date
Some lenders outsource to a valuation sourcing firm (Valex) who then secures the valuers.
So half the time they dont know themselves until a valuer actually accepts the job offer.
But on the flip - sometimes valuers dont want to hear what you think if the valuation came in low. If it does then thats where you get the comparable sales to the bank who then gets it to you... ideally they arent doing the val for you they are being paid by the lender.
You're right, the problem with it is that it takes the communication out of the picture
So half the time they dont know themselves until a valuer actually accepts the job offer.
But on the flip - sometimes valuers dont want to hear what you think if the valuation came in low. If it does then thats where you get the comparable sales to the bank who then gets it to you... ideally they arent doing the val for you they are being paid by the lender.
You're right, the problem with it is that it takes the communication out of the picture
Getting the right valuation is often about approaching it the right way. There is no point not being involved and then jumping up and down about it later.
We always provide valuers a file containing details of the house, land size, zoning, etc etc (all info that they should have but often dont when they arrive!), along with photos and list of similar sales in area and whether they represented expectation or high or low sales. Valuers only take area sales into account if they believe that the property is comparable.
We rarely have any valuation trouble when we use this approach and the banker now asks if we think that the valuations are appropriate.
We always provide valuers a file containing details of the house, land size, zoning, etc etc (all info that they should have but often dont when they arrive!), along with photos and list of similar sales in area and whether they represented expectation or high or low sales. Valuers only take area sales into account if they believe that the property is comparable.
We rarely have any valuation trouble when we use this approach and the banker now asks if we think that the valuations are appropriate.
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Its a subject close to my heart.
How about buying a large development site "well" (under value). Spending 15K having a commercial valuation tell me what I already know, that the site is worth more than I am buying it for. Only to have the bank demand the valuer retract his valuation and write down the purchase price.
Valuations have nothing to do with what a property will sell for, more to do with what a valuer or bank will comfortably risk themeless for.
Mark
that is all well and good if there are comparable properties in the area, or the valuer will use these figures as comparable.
I bought at a very low price for both properties I have had poor valuations on. The valuer just got the RP data info and added an extra 2-3K on our purchase price. One valuer would not compare a unit block up the street as comparable because it was "too nice" compared to our block.
I guess the moral of the story is don't buy properties at a bargain price unless you have evidence of comparable properties.
I bought at a very low price for both properties I have had poor valuations on. The valuer just got the RP data info and added an extra 2-3K on our purchase price. One valuer would not compare a unit block up the street as comparable because it was "too nice" compared to our block.
I guess the moral of the story is don't buy properties at a bargain price unless you have evidence of comparable properties.
Beachgurl,
It can also depend very much on who is paying them their fee. If the bank is paying, they will be more conservative. If you are seeking better valuations and you are running that close to your LVR (which I am only assuming if you are so keen to get these vals up), then you might be better paying them yourself and then presenting the valuation to the lender. Generally, within around 12 months of purchase, banks will only take purchase price as value, unless you can show major improvements.
The only other option, unless you are willing to challenge, is to wait it out and then seek a re-valuation.
But I wouldn't ever let it stop me buying below market - what's the old saying: You make your money when you buy, not when you sell?
It can also depend very much on who is paying them their fee. If the bank is paying, they will be more conservative. If you are seeking better valuations and you are running that close to your LVR (which I am only assuming if you are so keen to get these vals up), then you might be better paying them yourself and then presenting the valuation to the lender. Generally, within around 12 months of purchase, banks will only take purchase price as value, unless you can show major improvements.
The only other option, unless you are willing to challenge, is to wait it out and then seek a re-valuation.
But I wouldn't ever let it stop me buying below market - what's the old saying: You make your money when you buy, not when you sell?
Exactly right Mark C,
But then, isn't that what most valuations are for ??
There is a few exceptions, like when a deceased estate is being sold and the valuation is simply a data point for the beneficiaries to rely upon......but mostly, the valuation is being done such that the Lender can rely on the property as security for a further loan.
It all boils down to their comfort factor. They'll get that figure and manipulate it down as much as they see fit (we'll lend 80% on that if it's zoned A, but if it's zoned B, we'll only lend 70%....and just for the privilege we'll charge you an extra 0.8% interest because it's our policy....and more importantly so will every other lender....and if you don't like our rules then PO).
thanks for the tip Alanna. LVR was no problem for us at all, we just would have liked to have been given a larger LOC to buy a few more properties. I just don't think a valuer would have been brave enough to give a val of very high 500s when we purchased 18months ago for low 500s. Will just have to sit and wait until someone in our unit block sells up.
