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Bank House valuation

Discussion in 'Property Finance' started by ramblin72, 12th Sep, 2016.

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  1. ramblin72

    ramblin72 Well-Known Member

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    I am seeking some opinions about valuing a property for the purposes of lending.

    When we were borrowing to buy an IP, a property valuer came to value our PPOR. As we were walking around I pointed out in conversation, all the extras we had added...large aircon shed, solar, security, aircons etc etc.
    He said to me all that doesn't matter and that all the valuation is based on is number of bedrooms and bathrooms...the very basics...and of course location.

    So assume a basic 3 bed, 1 bathroom house was $300k in the area. Then assume the basic + shed, aircons, solar would get $330k in that area.
    Would the bank just stick close to the $300k and ignore the extras or would they value it closer to the $330k?

    Taking the above example, the $30k difference would be quite useful in borrowing.
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    Who knows with valuers! If in doubt - order two upfront valuations (instead of one) and considering going with the lender that provides the highest result (and therefore the largest equity release).

    However - there are other considerations here. If you're current loan is fixed and/or you've paid LMI on the loan previously then it could be advantageous to stay with the current bank.

    Cheers

    Jamie
     
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  3. ramblin72

    ramblin72 Well-Known Member

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    Thanks for that info Jamie. The valuation numbers seem very cloak and dagger. I asked our lender what the valuations of each of our IPs at the time of purchase (just for curiosity) and was met with the statement that 'it all checks out' or is in the ballpark so all good.
     
  4. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

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    One of many advantages of using a clued up broker is that you can "val shop" using a combo of upfront, kerbside and full walk through vals. Different types of val will be applicable to different scenarios and can vary considerably with the final figure. Its not an exact science unfortunately as human judgement is involved as well as unknown instructions from val firm or bank to valuer.
     
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  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I'd be VERY surprised if they weren't simply valued at the purchase price.

    Cheers

    Jamie
     
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  6. Brady

    Brady Well-Known Member

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    To an extent the valuer is somewhat right - a lot of those features will have a significant impact on the saleability of the property, but not necessarily increase the value of the property. Extra items like these might be nice for someone, but they might not want to pay a premium for them - others might not care for them at all. But it's not just based on the number of bedrooms and bathrooms - it's land size, building size, location, slope of block and overall level of finish.

    If similar house (land size, bedrooms, bathrooms, building size) sold for $300k I would be surprised if the extra features would at 10% ($30k) to the valuation without comparable sales. The valuer would be trying to find similar properties with similar level of finish.
     
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  7. Azazel

    Azazel Well-Known Member

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    Yep, that's all I hear, it came back at purchase price.
     
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