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How will the banks value this strata?

Discussion in 'Property Finance' started by mrdobalina, 31st Jan, 2016.

  1. mrdobalina

    mrdobalina Well-Known Member

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    Wondering if any of the brokers could help shine some light for me.

    I have a set of 4 strata units (in WA). The strata has been approved by landgate. Apparently I have up to 2 years to request the title. I understand if I keep it as one title as it currently is, then I only pay for 1 set of rates. When I formally receive the 4 strata titles, then I'll start to pay for 4 sets of rates.

    I am looking to pull some equity out. How will the banks value the set of units? As in one line... Or as 4 strata units?
     
  2. mrdobalina

    mrdobalina Well-Known Member

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    Can anyone help? Thanks.
     
  3. Scott No Mates

    Scott No Mates Well-Known Member

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    The DA to strata has been approved - should be as good as done as there's nothing to stop you lodging 5 seconds after the valuer has walkedout the door.
     
  4. mrdobalina

    mrdobalina Well-Known Member

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    Cool thanks.

    I thought the Banks/Valuer might be pedantic and insist on In One Line value until the title has actually been issued.
     
  5. Big Daddy

    Big Daddy Well-Known Member

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    I have 2 houses on 1 title, i get the 2 sets of council and water rates
     
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  6. mrdobalina

    mrdobalina Well-Known Member

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    Yes, I already get multiple sets of water rates. Perhaps it's the council rates?
     
  7. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    Simple: If it's on one title - they'll value it in line. if separate titles released they'll value it as 4x units.
     
  8. Scott No Mates

    Scott No Mates Well-Known Member

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    So,they'll go conservatively as opposed to highest & best use as it's approved?
     
  9. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    If the intention actually is to have the titles released, the lender will value as complete, however they will then have a requirement for settlement that titles are released.

    What they won't let you do is value as if complete, but then never actually release the titles (to save on rates).
     
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  10. mrdobalina

    mrdobalina Well-Known Member

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    Thanks Corey. I suspected as much.
     
  11. Dazedmw

    Dazedmw Well-Known Member

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    It's not the conservative option because its not yet the H&BU, it reflects what the current situation is. As others have said, if he wants a lend against four titles, issue the titles.

    If the bank lends against the best case scenario (future subdivision) and then the property goes MIP in 2 years 1 month they will have lent against a property based upon a scenario which is no longer true.

    I don't think it's unreasonable to value and lend against the actual situation as at the date of valuation.
     
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  12. Scott No Mates

    Scott No Mates Well-Known Member

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    In another recent thread, the OP could not get residential finance for a house which had a DA for units, the building was not built and they wished to live in the house 'as is'.

    The banks do have their cake and eat it :)
     
  13. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Bloody banks will go in whichever way is their favour.

    In this instance it will be in one line I suspect and around 10-20% less than if completely strata-d. If the paperwork had been lodged at Landgate and wasn't done yet they tend to view it as a done deal and I had some valued at this stage as singular not one line.