Does everyone stress out about valuation when buying at auction?

We won an auction on Saturday. Paid the deposit. Imo I think we paid market value for the property, if anything after further researching recently sold, perhaps even below market value.
The thing is in this particular suburb (suburb of only 2000 houses in total), there is a bit of a variation in selling prices, I have seen a couple of houses go for 350-360k (though smaller lots and smaller crappier houses), and have seen the same house as ours, on same size lots but on corner lots (development gems) go for 480k. A well renovated version of our house on a smaller non corner block went for 600k (think this was a one off though).
I am silently freaking out worrying that the val could come back lower and we could have to cough up the difference. I read a thread on here a while ago where that actually happened and that is where my worry is stemming from.
Has anyone experienced this??
The suburb is within 15kms of Melbourne CBD, 2 minute walk to train station.
On auction day we had agreed that we wanted the house if it went up to 390k, we still considered it a bit of a bargain at that as others that were coming up were listed at over 395k, and were going to auction anyway, and we had a fear that if we didn't get this one for around that price, that we might end up priced out and the next one could go way higher.
We would have liked to pick the house up for 370-380, it would have felt like a really good bargain at that price point.
Anyway to cut to the chase, we paid 392k, the reserve ended up being set at 380k, so we spent 12k over the reserve price.
Do you think that the valuation is likely to come in at our purchase price, or could it fall short?
Valuation is due back tomorrow but I can't stop thinking and worrying about it, especially since I have already started picking up stuff for the reno!
Got a great 3 year old kitchen from eBay for $650with appliances- not picking it up until the bank val is back as that is all we are waiting for to go unconditional on this.

 

Should be fine, looks like there's inferior and superior vals to support it.

 

Nope. Auction determines actual market value.

 

Can't get a more comparable recent sale ;-)

 

where did you buy

you only need to worry if you are purchasing in a falling market, rest easy your fine, Melb is smoking hot

 

Great I feel heaps better! My husband is the one mainly stressing me out and making me hold off on picking up these renovation bargains on eBay. I shouldn't have told him about the post I read about the guy who's val came in lower than his bid. Im so excited about the kitchen I found anyway here is a pic of my $650 kitchen Im picking up tomorrow to replace the original 1975 one the house has at the moment.

 

I was in a similar situation when I purchased my first home earlier this year. I knew I went a little over what the property was worth during the auction and was concerned what the bank's valuation would return.

But there really was no cause for concern. Just as Bran stated above, it's the Auction that determines the actual market value.

Good luck.

 

Ended up in Jacana. Market there has not moved much in the last 2-3 years it seems from my research- It hasn't had a boom yet so hoping we are getting in before one. People were paying the same and more than what we paid in 2014 and 2015 so I figure I can't really go wrong long term. Planning to do a nice cosmetic budget reno but hoping it will not look like a budget one. Wanted to buy in Glenroy but couldn't get in for my budget which was 460k max. Jacana is about 1km away and 100-200k cheaper, so figure ripple effect should hit within the next few years.

 

know this area well, close to CBD is it a deve site?

I purchased 5 dev sites in neighbouring area Broadmeadows around 2008 and have sold all, I did very well in a market that was on the nose with locals, still is I guess

all the best

 

Thanks. Its a 600m2 block- room behind the house to fit a townhouse one day, though there is 2.7m easement along the back fence, but still plenty of room.
Hoping to split the block in 10 years or so, depending on what happens. Planning to accumulate as many as we can in the short term then decide whether to split them and develop down the track. Hubby hopes to put down tools in his late 40s/early 50's and move into developing one day so would be good to have a few sites up our sleeves fro long term.
Broady is still going crazy, 600m sites you are lucky to pick up for 450k- and houses are so run down they don't even show photos of the inside a lot of the time. A lot bringing 500s. I actually really like the vibe I get from Jacana. Hadn't heard of it 6 months ago but after familiarising myself with the area I think it is a nice quiet pocket that is well located to the city and to transport/shops etc. Seems that all the original owners are starting to die, (nearly every house on the market has been a deceased estate), and with that I can only imagine young couples will start moving in and gentrifying the area. Im still amazed that you can buy so close to the city for the same price you buy a 3 bed H&L package on a 300m block for 50kms out of town.

 

It depends on the LVR - if borrowing within LMI territory then there is a slight element of risk (which goes up as the LVR increases). It's not so much the value coming in lower than purchase price - but if there's high risk ratings identified in the report that could cause issues.

If you're purchasing with at least a 20% deposit then you might not require a valuation with some lenders.

Cheers

Jamie

 

Sorry, I should have mentioned that I put down slightly more than the usual 20% deposit just out of concern with the valuation. This may have helped with getting the approval.

 

We are doing 80LVR

 

Sweet - which lender are you going with?

Cheers

Jamie

 

Not always. We bought a fancy PPOR last year at admittedly the wrong time, but it was an endgame property for us and well within budget. Bespoke property high on charm and 'designerness' but low on paper stats and in a new suburb with zero comparable sales history.

Won at auction for 1.6m, bank val came in at 1.5m. 80 LVR = $80k deposit difference which was obviously extra upfront.

To be fair, my broker said it's very rare for this to happen and I was only their 4th such case (of ~2000 jobs total)

 

Had a similar purchase price/valuation result a couple of years back.

Ordered three upfront vals and all came back the same :-(

Cheers

Jamie

 

OP I am fairly certain from what you have written that the bank valuation will come back at what you paid.

It wasn't over the top on the price and there are comparable properties above and below your price.

Further you are at 80LVR which the bank likes and even at worse case they value it 12K less you can either pay that part or just pay LMI of 1k (guessing).

I would say you have 99% chance the valuation will be the price you paid.

 

The val turnaround was meant to be 48 hours. That deadline passed today at 2.30pm, apparently the val company asked the valuer to make an amendment and they are waiting on him to do that before they send it across to the bank