Desktop valuations

Greetings,

I recently bought a 515k property with CBA on 90% LVR, and with desktop valuations coming up at 599k. Being able to pull out 6k equity with CBA's 80% desktop valuation equity rule?

Wanted to know:
1) how often does desktop valuations update itself
2) If I ordered a person to come and value the property and it came up under 599k but then able to pull out 90% of available equity could I choose which of the valuations that offers the higher release of equity? Or will they default to what it was valued at in person only from then on.
3) I heard ANZ does desktop valuations at 90% equity pull? Is that still true and should I refinance to them? As pulling out up to 90% of 599k seems fairly attractive or will there be shortfalls or cons that I'm not aware of?

Thanks for any advice

 

Is it worth the hit on your credit file?

 

Which process hurts my credit file if I may ask?

 

Apologies. Where are my manners.

Welcome to the forum.

I was referring to Point 3 in your list. Also is it worth the hassle of doing an equity pull for 6k as mentioned in the opening statement? A broker will be along shortly with better advice I'm sure.

 

The real question is what can you do with $6k?

You could release the equity as outlined, but I can't see that it would be worth the effort.

 

1.) it's a good question - and one that I don't know the answer to. I'd generate the report prior to settlement because after settlement, the price you paid will no doubt reduce the estimated desktop val.

2) at 90% they won't go off the desktop. Only the full.

3) agree with above - $6k isn't going to stretch far.

 

Also if you did refi to ANZ you'd be paying a heap of LMI again so not much point doing that for $6k.

 

Get an ANZ full valuation done for comparison, (to get an idea of what the cba valuer might say). In my experience desktop vals usually come in higher, and you can't choose afterwards, the cba will default to the full val, regardless of the lvr.

Interestingly I did a refi desktop with cba, clients were happy, went to auction (against my advice, before the equity pull had processed) then the assessor ordered a full val, which ruined everything. Desktop to 80% is policy, but assessment team can still override.

 

May not be correct on this, but i believe the minimum split size is 10k. Top up process may not be able to be used if loan < settled under 6 months.

In this scenario where you know if your reducing LVR down to 80% afterwards, may have made sense to purchase at 80 and equity pull at 80. Saves the LMI fee (unless your MEDICO). Paying LMI and then reducing the LVR back down to 80% has the benefit of certainty (cash on hand with a 90% loan vs potential assessment override) and reducing upfront cost (if required), but comes at a hefty cost.

Tobe's points definitely a good one - credit have authority to override.

Thanks,
Redom

 

Minimum top-up amount is $10k you could get around this by doing a whole new loan to payout the existing loan. But do you need the $6k that much?

1) wont be many that know, those that do probably shouldn't be telling you
2) would be extremely surprised if full valuation came back @ $599k if you recently purchased for $515k. Did a full valuation get completed when you purchased the property or was the contract of sale amount accepted? If full valuation was already completed, the bank wont do another full valuation if it's inside of 90days, unless there is sufficient reason for new valuation (renovations/comparable sales evidence). Your banker/broker can select which valuation to use now you own the property, full or desktop.
3) If you have paid LMI already would be a pretty big con

 

Correct me if I'm @fuudrizzle when you say desktop valuation - are you talking about an AVM or desktop - they're similar but ordered a different way. AVM is a 'customer ordered' upfront valuation. Whereas desktop is selected through application/VAS.
I would suggest OP is talking about the AVM which can only be used for 80%
If that's the case then @tobe for existing properties you can select which valuation to use.
I've never had a credit officer override any desktop or AVMs unless I've requested it

 

I was pretty ****** @Brady. I checkled I had completed the avm request correctly and even ordered it a second time with the same result.

Turns out the client had a branch Val done 6 months previously and it was a relatively new unit. Although the earlier full val was out of date and irrelelevant seems the asssessor looked it up and wanted another full val.

 

Wow @tobe I would have lost my ****. I'm glad that very few of my deals have to be signed off be credit.

I've mentioned in before when discussing AVMs but I've used it as earlier as 1 week after settlement before.
Only happy to do it so quickly after settlement when I've know the area and that clients have bought well BMV and using funds for further improvements.

 

I don't get the valuations..
There is a half a million dollar difference between what a real estate agent say's I'd sell for tomorrow and what the bank reckons.

 

@mikey7 what do the comparable sales say?

Valuations are mainly based off comparable sales, few common issues can pop up with this
- no comparable property, how can you determine what the property is worth - very hard for unique or new properties
- timeframe for properties to settle, in rising market a property might have offer accepted today, but settle in 3months... 3months later to buy same property might cost a lot more

Banks will usually err on the side of caution - the valuation is being completed for the bank not the customer - valuers have a professional qualification
Agents will usually be a bit more advantageous - they're trying to get the listing - agents aren't professional valuers

 

One is reflecting a bullish assessment of the value, the other is protecting the banks money so is by design naturally conservative. It's normal for there to be a spread but $500K is a lot.

In terms of % it's normal for there to be at least a 5-10% spread and the greater the value the property I find the bigger that spread becomes. If the value of the property is + $3M you would expect the spread to be 15% or so especially if well above median for the area.

 

@Brady Yeh that's likely the issue - nothing comparable has really been sold for years. Mine's probably the most recent - 3 years ago. The only close house (which has a pool and looks a bit more modern inside) sold for $1.44M a year ago. But no one in the neighbourhood wants to sell (especially now a train station is being built 400m away).

Some NEW houses around the corner have sold recently for ~$2.4M.

Sucks, because I can't access that equity if I wanted.
(Sure my serviceability is pretty much at the top, but if it wasn't I'd be stuck anyway unless I sold).

@Marty McDonald for numbers, banks got me at $1.1M, REA has me at $1.6M. 30% diference lol.
I'd never sell it due to its location though.

 

Hrmm rock and hard place. Might be worth valuation shopping if you're really going to want the equity now - but you're going to be limited if you're at the serviceability wall.

Without having any idea of your property, my guess is actual value today close to $1.35M
- bank would be going off limited sales available, couldn't be taking into account too much future potential as it's based on selling now
- agent would be going off what thinks might be able to sell at a max, would be taking into account future potential - they don't make a cent without a listing or sale.

By the sounds all your neighbours are in the same boat - hard to determine value if none of you sell

If no rush for equity I would just sit back and keep an eye on the local market, wait for listing and settlements to go through. Then advise your banker/broker of the properties when you go extract equity.