Corelogic Valuations are a waste of time & money

Discussion in 'Property Information Resources & Tools' started by standtall, 8th Jun, 2016.

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  1. truong

    truong Well-Known Member

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    Yep, their basic data is far from accurate. On my street of 26 houses about 1/3 of them are showing the wrong data either in the number of rooms, baths or garage. I know this because I’ve lived here for 25 years and have been to all the opens.

    The only house that hasn’t transacted in the last 25 years is mine. It’s showing 3+2+1 while in reality it’s 5+3+2. No idea why. As expected their valuation comes 30% short.

    In one case a house was demolished 5 years ago with the block sitting empty since then. Their photo shows bare land and yet their valuation is clearly for a house sitting on it, 40% over. This could be explained because a demolition doesn’t need to be reported, but the data is wrong all the same.

    As for the units mentioned in the OP, something occurred between June 2 and June 8 e.g. an entry error on a recent comparable sale.

    However this should have also affected the unit next door. The fact that it didn’t points to an error in the basic data of one of the units thus making them different.
     
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  2. jprops

    jprops Well-Known Member

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    I'm a computer programmer by profession. As others have pointed out, it's most likely inconsistencies in the underlying data between the apartments causing the discrepancies.
     
  3. VB King

    VB King Well-Known Member

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    Rather than have a computer tell me what something is worth, I'd back myself and some local research every time.
    Surprisingly you can't believe everything you read on the Internet, and this crap is for free showing ranges that are often unrealistic.
    I suspect there is an army of investors out there who at one point thought they'd struck gold by stumbling across this "data". But know better now.
     
  4. Elives

    Elives Well-Known Member

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    i would be interested to know the answer to this. i thought the same but at the same stage i know that the more toilets you have the higher the rates are. maybe the more bedrooms they figure more people living there so higher usage of sewer charges?
     
  5. Gockie

    Gockie Life is good ☺️ Premium Member

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    Do you have evidence or something written by council about this?
     
  6. truong

    truong Well-Known Member

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    One more thing I forgot to mention. If I decide to sell and my house is sold for its normal value, all the 3 bedroom houses in my area are going to jump in value for no apparent reason. And someone like the OP will be scratching their head!
     
    Last edited: 9th Jun, 2016
  7. Big Will

    Big Will Well-Known Member

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    Like @euro73 has said even bank valuations can be vastly different and will be generally conservative in nature but how conservative is up to the individual.

    Real life example of my property where I worked as a REA previously but also I can pretty much walk into any house and would be able to have a good idea of value as I am constantly (weekly) seeing sold prices and checking out the house (online mostly but would probably inspect 5-10 a year).

    Organised bank valuation on this property and the following happened;

    July 2015 - Full Val 600k (Bank A) - My Val was low to mid 700s market value would likely been mid to high 700s. Contested valuation and was not successful but they were going to change the rent by $50 a week just not the valuation price (go figure).
    Apr 2016 - Full Val 640k (Bank B) and Desktop Val 670k (Bank C) contested the 670k val for them to do full val. My val would be mid 700s, market likely be high 700s early 800s.
    May 2016 - Full Val 750k (Bank C - After contest of desktop val - no contest of their full val).

    Has my property increased 20% in 10 months? Hell no
    Did my property increase 17% in 1 month from Bank B? I wish but defiantly not.
    Did my property increase 12% in 1 month from Bank C? Not at all

    So there was 4 people (inc myself) who looked at the property for valuation within 12 months and the range was 600k-750k, within a month it was 640k-750k.

    I am glad these vaulers spend three years studying at uni on how to value a place and end up with 17% difference from one valuer to another within a month.
     
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  8. Daisycutter4

    Daisycutter4 Well-Known Member

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    Hi Big Will, I realise reports are mostly kept confidential but I'd love to see the full reports and comparable sales to get to the bottom of the variation. There are some very strict rules on what sort of evidence and process valuers can adopt when assessing under a full valuation with an internal inspection, and if you stay within the guidelines, variations of this type shouldn't occur. This sort of variation on a full valuation should also flag through the Valex system with some "please explain" to the valuer.
     
  9. Luke T

    Luke T Well-Known Member

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    Totally true Big Will. Valuations are something that will always frustrate you as an investor.
    Most of the onilne ones i would not trust at all as mostly are way off.They cant take into account any improvements etc,so I take them with a grain of salt.
    The frustrating thing is when a bank sends a valuer out and they still will never 0(or rarely)value above what you have contracted to pay for the property.
    I reckon there should be the rule of -You dont tell the valuer what you are paying for it.This way if you can buy undervalue ,you can borrow higher according to its true "value"
     
  10. truong

    truong Well-Known Member

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    Not talking about full valuations here, not even desktop valuations, but automated valuations. The issue here isn’t valuer variation but discrepancies in computer generated data.

    My understanding is that CoreLogic automate their valuations using only property characteristics (number of rooms, land and building area, age of building, type of construction etc…) and actual sales data. No subjective input such as valuers’ valuations is used.

    The OP’s conundrum was due to a sudden change in data over a period of merely 6 days. If property characteristics can be assumed to stay unchanged during that time the only possible explanation is the entry of new sales data. That this new entry affects only one of 2 identical units suggests that there is a data error somewhere in the system, either in the new entry or in the existing data or both.

    That’s all it is about. No need to involve valuers.
     
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  11. Daisycutter4

    Daisycutter4 Well-Known Member

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    Hi Luke,
    Banks will only lend on the lower of contract price or bank valuation, so having a valuer come in above contract will make no difference to your borrowing.
     
  12. S.T

    S.T Well-Known Member

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    But isn't the true value of a property what someone will pay for it on the open market?
     
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  13. S.T

    S.T Well-Known Member

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    Not too sure on that, thought it was overall value. Will have to do some research on my rates notices!
     
  14. Big Will

    Big Will Well-Known Member

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    Sorry Daisycutter but I will not provide this due to confidentiality, thanks for understanding.

    I guess you and others will have to trust me (an anonymous person on a forum lol) but some people on this forum have seen either all of the valuations or some of them and know this story is true.
     
  15. Daisycutter4

    Daisycutter4 Well-Known Member

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    Not a worry Big Will - not questioning your account but more posing it as a hypothetical "It'd be interesting to actually grill the valuers on WHY that sort of variation has occurred" scenario. At least one of them appears to have stepped outside of the guidelines. Property owners and banks should have confidence in how the profession conducts itself. They aren't easy to get so wrong – too many checks and balances are in place.
     
  16. Big Will

    Big Will Well-Known Member

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    I understand the OP comment but if humans cannot get it right how would you expect a computer who is unable to walk through a property (at least with today's technology) and be able to determine the finish of the house. A desktop is purely a guestimate at best, even the Domain home price guide is stupid as my property was worth 100k less than an un-renovated 3bed (mine 4b + study) with 1 bath (mine 2) on directly opposite me on the same street and same land size.

    If you know your market well enough you will not rely on these 'desktop vals'

    If you want to know the Corelogic report (May 2016) for my property was 635,200 as its estimate and range was 603,400-666,900. Even at their highest price 12% off a bank valuation (was on target with a Bank B valuer and in a way Bank A a year ago) or off their estimate they were 18% off even with their 'high' confidence.
     
  17. Big Will

    Big Will Well-Known Member

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    As much as it would be interesting it doesn't benefit me in anyway besides seeing their answers.

    All I wanted was a valuation of 700k to allow us to do what we want to do and having 750k means we are allowed with a lot more ease (our plan still hasn't changed :)).
     
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  18. BBQLD

    BBQLD New Member

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    Agree. Our friends are currently looking in Kedron, Qld at 2 Bed houses and corelogic autovals come up around early $500K for houses that have been going on to sell for early to mid $600Ks. Yes even physical valuations will vary as euro73 has described above, but those valuations are generally subject to Valex scruitiny and valuers held to question for big discrepancies?
     
  19. kierank

    kierank Well-Known Member

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    I personally paid for a on-site valuation on a Brisbane property (house in Brisbane) in May 2013. Then, in March this year, I wanted to borrow some funds using this property as security and the bank sent out their valuer to do an on-site val. The 2016 valuation was $250K LESS than the 2013 val.

    There was also a number of errors. For example, the 2013 val had car areas of 106m2; the 2016 had 60m2. What happened to the other 46m2. It is the same house (as we only built it 4 years ago).

    I objected to the bank and sent them my 2013 valuation. I also told them that this was probably conservative in 2013 and I informed them what I thought a current conservative estimate (I am not a valuer, so couldn't use the word valuation) would be. I don't know what happened internally but they lent me the funds so I moved on.

    But my confidence in the valuation profession is not a high as it used to be.
     
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  20. Daisycutter4

    Daisycutter4 Well-Known Member

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    @kierank - Without seeing the bank's valuation report (which you probably wouldn't have access to) it's difficult to say how this could have happened – but certainly vast variations in full valuations should be a red-flag to the financier. At the very least, each valuer has to be able to justify why they land on the figure they do. They need to draft their findings in a fashion that would be defendable in a court cross-examination.
    In any case, you did the right thing – going back to a financier with a reasonable argument as to why you believe the valuers assessment is incorrect is the way to go. I'd guess in your case, they've conducted an internal audit with the valuer, agreed with you and proceeded with the loan.
     
    kierank likes this.

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