Land Loan - Undervalued

Discussion in 'Introductions' started by SS1992, 7th Sep, 2020.

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  1. SS1992

    SS1992 New Member

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    Hey,

    Has anyone ever encountered a problem securing a land loan. We found our today our land valuation came back unsuccessful.

    However in the report the market value is the Same as the purchase price. We are confused as to why it’s “under valued” when it’s the same.

    we are going to try and resubmit as a house & land loan. Any insight or tips would be great
     
  2. MTR

    MTR Well-Known Member

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    Have you looked at recent sales of same size land component over in this area in the last 3 months
     
  3. SS1992

    SS1992 New Member

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    Yes it’s a new estate and is basically sold out, we actually got this block cheaper per sqm as it was one of the last one.
     
  4. MTR

    MTR Well-Known Member

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    OK, what the hell’s going on? Unless lending has tightened for this??
     
  5. SS1992

    SS1992 New Member

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    The report literally says “the purchase price is considered to be in line with market value when Compared to recent sales in the area”

    Waiting to hear back from the bank tomorrow if we have any options. So stressful when we have paid so much in deposits.
     
  6. Property Twins

    Property Twins Mortgage Brokers & Buyers Agents Business Member

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    Does the valuation report note the amount as per the contract of sale.

    Had one come 50k short late last year in Sydney, but another lender val came as per purchase price. For various reasons lender with lower val was better suited. Had to fight tooth and nail to have them agree to the contract price....core logic decided to audit the report and have another valuer undertake the valuation.
     
  7. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

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    When you say the 'report', is that the valuer's report or something else. If the valuer's report is the same as the purchase price, then I can't see why the bank would be assuming a different figure, unless there's additional comments in the report. Is there an 'addback' or similar clause in the contract?
     

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