Bank valuation. How do i get one before offering.

Hi all

I would like to get a bank valuation on a property rather than looking at the general market etc. The reason for my wanting this is that the property i have my eye on has been sat on the market for about six months and i think will bank value low. This could help me negotiate i expect.

This would be my first intentional ip purchase so I could well be making some school boy errors.

My intention is to do a renovation over time to increase equity for further deposits but it will hold itself as neutral Cashflow in the meantime. It's a pig to look at which is why i think i could get a deal.

My question is, how do i get a bank valuation, are they worth getting, is this a mistake to go down this road, am i wasting time and getting caught in the analysis paralysis trap.

Happy to be schooled here. .. in fact i would love to learn something i didn't know.

Thanks

Paul

 

Do you have some idea of how much comparable properties go for? That will be the main factor in a valuer coming up with their determination - I don't it matters too much to the valuer how long the property has been on the market for.

 

Your broker could probably organise a desktop valuation. Otherwise ask anyone you know with RP Data, Residex or Pricefinder what value that spits out.

You have to be very clear on something here though - value and price are very different concepts.

 

who is your bank?

 

Ask your banker/broker to run a desktop valuation - that should provide some recent, comparable sales that should help with your research.

Cheers

Jamie

 

Is the vendor motivated to sell or are they happy to hold out for their higher price?

It won't matter what a bank val comes back with if the vendor won't budge.

 

Getting a bank valuation prior to the auction will almost certainly result in a figure lower than the vendor is probably willing to accept. If you then negotiate a purchase price, the bank will have a registered valuation on file which is what they'll fund against - not your purchase price, you'll need to make up the difference.

If you a gree on a price, write up a contract and provide that to the valuer, 99% of the time the valure will simply agree with the contract.

In essence a bank valuation prior to agreeing on a price is a really, really bad idea. Get your broker to provide you with a desktop valuation instead such as a Residex or RP Data report.

 

I think the post by @Peter_Tersteeg above is probably one of the most important of all tips. Heaven help the person that wins an auction and cannot fund the purchase.

 

Sorry to hijack but I've previously only ever purchased BMV and am yet to get a bank value on purchase above my purchase price. I'm wanting to access immediate equity to fund my next deal on settlement of this one, so is there any way I can push for the bank to assist with this? I have some really fabulous valuers in my areas but it seems my lenders won't send them out until a refinance is on the cards.

 

Brokers can order valuations prior to submitting an application.

The problem is the valuer is likely to see the recent purchase price and use that as an indicator to the properties value.

 

It's very unlikely that you'll find a bank valuer who would be willing to signoff immediately after settlement on a substantially higher figure without justification. You're generally having to wait 3-6 months to give the valuer enough time for the previous sale price to fall off, so they can look at the greater market to determine the 'real' value.

The only hijinx you may be able to play is involving desktop valuations, but an assessor can overturn desktops if they think it's a bit suspicious (ie seeing it settled just days before for a different figure).

The easiest way to pull out funds from a BMV property is if you renovate at settlement and then the previous price can be ignored as the property is substantially different from the last price achieved.