Bank valuation less than recent sales?

I just had the valuer walk through my 2 bedroom apartment in Melbourne Western suburbs and I'm worried his evaluation is going to come back significantly less than the 2 similar apartments in the area which sold for roughly the same offer put on mine.

There are some BIG variations in sales prices in my area - some crappy apartments sold for 230, some good condition ones sold for 260. If the valuer uses the crappy apartments as a guide he could easily value the property at 7% less than the offer which I think makes a huge difference considering the buyer is borrowing 95%.

I'm also worried because one of the tenants had a smashed bedroom window (which got repaired tonight) and the valuer might consider this a negative marketing factor.

Anyone have experience dealing with bank valuations?

 

A little...

Don't stress.

If this is a Val for your purchaser?

If it's an arms length contract, it's highly unlikely to come back other than the contract price.

If it does, the purchaser might:
Walk away
Ask for a discount


You could get a broker to order a couple more vals, see if it's just this particular valuers opinion. If that's the case ask the purchaser to change lenders or give them the other vals to use when they dispute their val.

It won't come to that I'm sure.

Relax.

 

What Tobe said.

The only time I've had a purchase come in low was when there was something unusual about the property - like duel living - or something wasn't council approved so it was valued as a 3 bed instead of 4.

So as long as it's a standard property you should have no trouble.

 

A little

What is the purpose of the valuation?

Is it for a refinance/equity release or for a purchase?

If the former - then it's not uncommon for the valuation to come in lower than the owners estimate. The broken window won't help either - it's not a good look.

If the latter - then chances are it will come back at purchase price.

Cheers

Jamie

 

Recently had a valuer using more than 6 months old data and last year's data to come up with his valuation. My excellent broker recommended we'll wait until the last one expires and try again. Hopefully, not going get that silly sausage again.

 

It can happen. I know of a couple who purchased a villa in Melbourne's North West in a hotly contested auction. Nothing at all unique about it and 3 bidders took it all the way to the eventual purchase price of 820k.

Valuer with contract in hand valued it at 650k and refused to budge. Even though the REA could have sold it for almost the same price to 2 others.

 

It's for a purchase. I'm paranoid the valuation is going to look like a council valuation and come back 15k under the sale price. The 'only having 5% deposit' is what makes me so concerned the buyers fiinance won't go through. If they were putting up at least 10% none of this process would have me so apprehensive.

 

It can but doesn't happen often. In that situation there would likely be comparable sales you could use to contest the Val.

 

I know this won't help - but there's not a whole lot you can do. Just need to wait to see what it comes back at. If it comes in lower than purchase - suggest to the agent/buyer that another val be ordered via a different bank.

Fingers crossed all is good!

Cheers

Jamie

 

If people fight a lot perhaps a 'duel' at high noon might have been a way to resolve the conflict in the old days. But I suspect you mean 'dual' as in 2 incomes which investors love

 

If it's for a purchase, you almost certainly have nothing to worry about. Looking back over the last year, I've had 3 problems with purchase valuations, which as a percentage is probably less than 5%.

Each of those three properties were unusual. One was an off the plan apartment purchase. The other two were potential development sites.

The valuation occurred yesterday so odds are the report has already been returned successfully. If it is successful, nobody is going to tell you this until the loan is unconditionally approved. There's still probably a quality control process to go through but it's almost certainly fine.

 

Haha - yes I did look at that and wonder, but couldn't be bothered checking

 

Finances went through and settlement is on the 12th of october if anyone was wondering.

There was a bit of a dispute between the buyer and the agent because the buyer who came to the inspection as a first home buyer decided he wants to rent it out immediately as opposed to moving in and he wanted it listed for above average rental price of the area (before settlement so it's tenated once he takes over). The agent said "he's a ****ing idiot" for wanting so much and told him "if you're not happy with our recommendation you can get it vacant possession and list it yourself and lose 1 month trying to get it occupied". I agreed with this because I wanted it tenanted asap in hopes of seeing some $$$ prior to settlement.

Anyway, the agent listed it for the inflated price and someone filled in an application to move in during the first inspection.

 

If your selling ? I would not let a tenant in for matter of $ for a few weeks, too many potential downsides...especially at an inflated price.

 

Why do you say that? It was the buyers request that it be tenanted prior to settlement and agreed to waiver the "vacant posession" clause. How's it any different than selling a tenanted property?