Bank valuation challenge

Discussion in 'Loans & Mortgage Brokers' started by Dylan33, 26th Feb, 2017.

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  1. Dylan33

    Dylan33 Well-Known Member

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    I have 3 valuations from 3 seperate real estates all very good numbers compared to the bank valuation. Is it possible to challenge the bank valuation by presenting them with the RE vals?
    I understand there has to be a difference between them for bank policy reasons, but was wondering if it's possible to raise the banks valuation by presenting them with the RE's vals?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Those real estate agent estimates are worthless - just take 10 ro 20% off the value and you may get a realistic figure.

    If you want to challenge a valuation you will need to provide the valuer with evidence of 3 or more comparable sales. SALES, not houses on the market.
     
  3. tobe

    tobe Well-Known Member

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    Just get your broker to do another couple of bank vals and use the comparable sales in them for your challenge. Or change banks.
     
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  4. Dylan33

    Dylan33 Well-Known Member

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    Thanks Terry. Very difficult to get comparables though! It's a kinda unique property for the area.
     
  5. Marg4000

    Marg4000 Well-Known Member

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    Hence your problem.

    If you are finding it difficult to find evidence of value then so are the bank valuers. In that case of course they will be ultra conservative.
    Marg
     
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  6. Phantom

    Phantom Well-Known Member

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    Valuers don't like unique properties. It makes them nervous as they have a hard time finding anything to compare it to. Usually they take extra care and give more than usual conservative valuations.
     
  7. Beano

    Beano Well-Known Member

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    Very much so
     
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  8. Redom

    Redom Mortgage Broker Business Plus Member

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    Usually your better of trying another valuer/lender - if thats possible to your scenario.

    Trying to get valuers to change their opinion isn't really likely to lead to much success. They could simply want to apply conservatism. Its not unusual to see 10-15% variances in full valuation results for the same property, particularly for higher end values (750k+ range).
     
  9. New Town

    New Town Well-Known Member

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    and it's better to get the terminology correct. real estate agents provide an appraisal not a valuation
     
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  10. klabat

    klabat Well-Known Member

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    real estate agents - 2 days to be qualified
    property valuer - degree qualified and few years to be accredited.
     
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  11. Gypsyblood

    Gypsyblood Well-Known Member

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    Real estate agents are also trying to get you excited about the property appreciation to get you to sell. My IP that only settled in July last year, a well known REA in the area today valued it at 470k. I bought it for approx 335k.
     
  12. PandS

    PandS Well-Known Member

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    RE value a place I bought over a million, I bought for 150K less
     
  13. Cimbom

    Cimbom Well-Known Member

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    Valuations seem particularly bizarre in Canberra for some reason
     
  14. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    REA will appeal to emotion and greed and initially inflate the price to "get the listing". I have often wondered if an honest approach using data and common sense would win over people from a higher guesstimate from others. Truth is (except in a hot market) the price conditioning tactic will be applied 2 weeks after listing to where it should have been in the first place, but you run the risk of the property going stale very quickly.

    No comparables = a nervous valuer = ultra conservatism.
     
  15. wylie

    wylie Moderator Staff Member

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    On top of all the comments above, I'd also say that in my experience, valuers don't take kindly to being asked to amend their valuations. It is seen (in my experience) as questioning their knowledge and expertise.
     
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  16. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    I have had vals ammended in the past but not many. Stats are less than 1% are ammended.
     
  17. wylie

    wylie Moderator Staff Member

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    I sent a valuer some comparables that I knew about, including the one right next door, sold within the prior three months, same block size, different style of house but sold for very close to expected valuation on the one we held.

    He completely ignored it and used different ones. I believe he was just thumbing his nose at my "meddling".
     
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  18. dabbler

    dabbler Well-Known Member

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    The lender can even turn around and then drop the LVR even if you do somehow get the valuer to raise the valuation.

    So it is not just the valuer who may get nervous over something "unique"
     
  19. Corey Batt

    Corey Batt Well-Known Member

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    Not just the valuer and banks - but also mortgage insurers who some of which have specific policy stating that if there is a change in valuation figure, the lower figure is to be used.

    This is where I'm not a fan of 'unique' properties from an investment perspective - you want a common cookie cutter property which values around median and lots of comparables - it takes away valuation risk where your valuation can be 10%+ off what you might expected.
     
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