Interesting Valuation ranges.

Discussion in 'Property Finance' started by klabat, 2nd Jan, 2017.

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  1. klabat

    klabat Well-Known Member

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    Thought I'll share my experience on valuation reports on a refinance and cashout on 80%lvr

    My broker submitted 4 val reports with different companies and was suprised on the discrepancy of them

    All short form (full inspection) and came in at:

    Val report 1: $660k
    Val report 2: $880k
    Val report 3: $700k
    Val report 4: $750k

    Market value from Agent said 860-900k if were to sell up now.

    These ranges are so far spread.
     
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  2. Scott No Mates

    Scott No Mates Well-Known Member

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    Did any of them have a valuer come out or are they all desktop valuations?
     
  3. klabat

    klabat Well-Known Member

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    They were all fully inspected valuations being a valuer coming in to the property
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    :eek: 30% variation
     
  5. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Extreme example of why doing a valuer shop via a broker can possibly yield better results if one is chasing equity

    ta

    rolf
     
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  6. Otie

    Otie Well-Known Member

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    Does it cost to valuer shop? I didn't know this was an option- I thought you just had to go with whoever the bank use
     
  7. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Costs someone usually.................

    Can generally only be done between different lenders, thus is most useful for loans of 80 % lvr or less, not crossed, and not fixed, so that you can move when you get that sensational val

    ta
    rolf
     
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  8. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    And oodles of borrowing capacity to enable you to pick from a broad range of lenders. ;)
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    $660k to $880k - that's a huge range!

    What area is the property located in? Are comparable properties limited? Either way - that's a big gap.

    Cheers

    Jamie
     
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  10. dabbler

    dabbler Well-Known Member

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    Yeah, that is a wide variation. Wow...
     
  11. alicudi

    alicudi Well-Known Member

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    Hi

    Wow that is a large range of valuations. I would have hoped that the range was no more than 10 or 15% but up to 30% is a huge difference.

    Regards,

    alicudi
     
  12. klabat

    klabat Well-Known Member

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    This is in Melbournes West a suburb called Caroline Springs.
     
  13. albanga

    albanga Well-Known Member

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    Well that is just bizarre!
    Their is nothing unique about the housing in Caroling Springs to cause such a variation.

    Every house is nearly the same given it is a huge house and land development with still plenty of land around!
     
  14. jins13

    jins13 Well-Known Member

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    Maybe it's wrong for me to say this, but it really makes me question how reputable and professional the industry is, when there are such a discrepancies in the vals.
     
  15. Tom Simpson

    Tom Simpson Well-Known Member

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    I can't comment on Melbourne, but in Perth we've had similar stories on a number of occasions, although not quite as large a spread.

    When we've quizzed the valuers who have come in way under they'll typically give a generic "the market has dropped by X in the last 6 months". They're being super conservative which I ASSUME is because someone has given then the stick for being too liberal with their vals.
     
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  16. alicudi

    alicudi Well-Known Member

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    Hi

    May I ask are these valuation figures directly from the valuer or are they from the finance companies directly? If the valuation figures are from the finance companies I wonder if they have altered/manipulated the value to take into consideration what risk profile they have assessed you under and whether some finance companies want to give you less $$$'s than the other. Maybe a finance company that is happy to give you more $$$'s will put a higher value on your property?

    If the values given are in full and completed valuation reports that you have given instruction directly to the valuer to perform and have paid for yourself and you have copies of all of these reports from each of the 4 valuers, well I am absolutely shocked and I would say it undermines the credibility of the valuation industry and you will in fact be able to search through each report to see how each valuer came to their final valuation figure.

    Regards,

    alicudi
     
  17. klabat

    klabat Well-Known Member

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    These were instructed by different banks and assigned by different valuation companies. Its funny that all the reports had half of the same comparables but the other half is what swayed the decision on a high, conservative and low figure.

    My property definitely fits in the large block, 50 sqr house range, but those val reports are definitely fire sale figures haha
     
  18. tobe

    tobe Well-Known Member Premium Member

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    Not completely uncommon to have that sort of variance. Property valuation isn't a science. Valuers have a 10% variance.
     
  19. Redom

    Redom Finance Strategist Business Plus Member

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    Wow - thats a huge variance.

    I would say that this is more of an anomaly - especially for full valuations.

    This isn't all that uncommon for desktop valuations - even so that range is larger than most.

    Does highlight the value of valuer shopping where possible (meet servicing/policy requirements of lenders & seeking maximum equity pull/loan amount).
     
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  20. Chilliblue

    Chilliblue Well-Known Member

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    Ask for their comparables and see what they used to attain a clearer understanding