I'M IN LOVE - but valuer may ruin it

Discussion in 'Loans & Mortgage Brokers' started by Carol M, 6th Mar, 2022.

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  1. Carol M

    Carol M Well-Known Member

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    Found dream home, but has gorgeous 2nd dwelling on block, a barn house approved only as studio or parent/teenagers retreat, not a dual occupancy.
    The vendors stupidly put in full blown kitchen with wall oven and hotplate, plus dining chairs etc.
    Will bank valuer balk at this 2nd kitchen, given 2nd dwelling is not approved as a dual occupancy, merely a detached living extension.
    If so, perhaps I can offer to pay for electrician to remove the cookers, and fill space with pot plants or like, plus remove pot and pan hanger and even dining chairs. Or do I need not bother.
    My understanding is that one can get away with a "wet bar" i.e.
    sink, plus maybe a microwave and bit of a bench, but probably not a full blown kitchen.
    Lender is probably CBA.
    Thoughts?
     
    Last edited: 6th Mar, 2022
    Carol M, 6th Mar, 2022
    #1
  2. skater

    skater Well-Known Member

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    Wait and see what the valuer comes back with.
     
    skater, 6th Mar, 2022
    #2
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  3. The Y-man

    The Y-man Moderator Staff Member

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    How many % more are you intending to pay than a property in the area without the extras?

    The Y-man
     
    The Y-man, 6th Mar, 2022
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  4. Carol M

    Carol M Well-Known Member

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    Not sure what you mean. Price is comparable to properties without extras.
    But 2nd dwelling is utterly amazing, and not easily matched.
    Also, not wanting to wait for valuer, only to find they reject it. Forewarned is forarmed.
    Hope to hear from knowledge trust what their experience is with valuers and bank's view of 2nd kitchens.
     
    Carol M, 6th Mar, 2022
    #4
  5. Sackie

    Sackie Well-Known Member

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    Just don't pay a ridiculous premium if you cant afford to make up the shortfall if the bank doesn't value it as such.
     
    Sackie, 6th Mar, 2022
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  6. skater

    skater Well-Known Member

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    This!

    Then, if you do purchase it, get it approved by a private certifier.
     
    skater, 6th Mar, 2022
    #6
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    depending on LVR and location, you may not need a val, lender may accept contract of sale or accept an internal AVM.

    Your banker should be able to run that in advance to get you an idea of likely outcome

    ta
    rolf
     
    Rolf Latham, 6th Mar, 2022
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  8. The Y-man

    The Y-man Moderator Staff Member

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    Well should not be a problem then - valuers use other comparable sales as basis - so as long as you are not paying more than a property without the extras, I can't see a problem from that aspect.

    You'd need to be more worried with council etc if the thing is not approved and is illegal etc.

    The Y-man
     
    The Y-man, 6th Mar, 2022
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  9. Carol M

    Carol M Well-Known Member

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    LVR will be less than 70% but what if bank does require full valuation. This is my query - will they balk at unapproved 2nd kitchen?
     
    Carol M, 6th Mar, 2022
    #9
  10. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    You maybe be able to do an AVM with CBA, thus no val is needed.

    And if it stacks up with the purchase price then you'll be right

    Ask your broker.
     
    Tony Xia, 6th Mar, 2022
    #10
  11. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    I think what OP is asking is whether the bank will have issues with a 2nd kitchen, instead of whether the value will stack up.

    In my experience I don't think the valuer will care, they may or may not attribute value to the 2nd dwelling but its not going to be a negative thing regardless.
     
    Mel Morgan, 6th Mar, 2022
    #11
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  12. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Our experience is that the valuer will flag the additional dwelling as a risk, and ask the lender to make sure its approved.

    Its not about the value per se, but will likely score a 4 or 5 out of 5 for an improvements risk rating with valuer comment to suit. Often this will be " essential repairs of X dollars estimate" to make the wet areas go away

    ta
    rolf
     
    Rolf Latham, 6th Mar, 2022
    #12
  13. Tony Xia

    Tony Xia Structured Loan Advisor Business Member

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    Rolf is correct,

    Thats why we are suggesting in obtaining finance through a lender that dont need a full valuation, so there won't be any red flags on the valuation report, if any.
     
    Tony Xia, 6th Mar, 2022
    #13
  14. Mel Morgan

    Mel Morgan Sydney Property Manager Business Member

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    Please disregard my limited experiences and go with what the brokers are saying.
     
    Mel Morgan, 7th Mar, 2022
    #14