Land valuation came up short?

Thank you for your experience.
Our contract was subject to finance, and yes we have two years to build.
Which is why as a last resort if the other valuations come up short and mandalay don’t agree to a price drop we will be simply delaying our build and getting our loan for our land only, so we don’t lose our property.

Yes he knows what he’s doing! We will hopefully find out about the other valuations today and he has also been in contact with the vendor to see if there is any way for them to drop their prices

 

Doesn't VIC councils look at bonds for this?
Most of our developers over here pay bond for this - means once confirmed we can proceed prior.

 

Just received word from our broker that our valuation from Westpac was at contract so he’s now deciding whether to contest the valuation with combank or go through Westpac for the loan. But at least we know now that we have the valuation from Westpac if we need it!

 

Nah, it’s the valuers industry group advice. OTP vals can’t be completed until the valuer can see and stand in the completed property.
For construction this is interpreted as standing on the block after the roads are in and the site is pegged.
In practice most developers now restrict access while they are doing these works for OH&S reasons, so even if the valuer was happy to do the val earlier they can’t access the site for the little pictures in the val report.

 

Understandable for OTP.
I've had a few signed off here no problem once we confirm bondage.
Realistically going to need another valuation as would expire after 90day
But can usually weed out any shortfalls earlier enough that the customer has options

 

Get the broker to send Westpac val > CBA/Valex - I've had success with this in the past, when I've been able to access the OFIs val!

 

This would be a lot simpler for us since our loan has already been approved through combank but I guess there’s always the risk that they won’t change it and we’ve delayed the Westpac application. With land titlement and settlement being so close it’s just all about time at the moment

 

Do both. Lodge westpac/Bom app while the broker disputes with Cba

 

I’m hoping that’s what’s being done!

 

Just wanted to give an update on this situation and maybe get some more advice and knowledge!

CBA wouldn’t change their valuation so we have taken our loan through Westpac.

We have just received our approval in principal with Westpac, after a pre assessment, full assessment then having the application sent to the senior credit manager (apparently this is the process at Westpac who seem to have a division for everything according to our broker).

We are now just waiting on our full approval with Westpac conducting their final checks we have been told by our broker that this involves employment verification, but apparently it’s not very likely that employers get called and the banks tend to just confirm employment through bank statements and pay slips?

I am just wondering if anyone has any experience with Westpac and may be able to say from this stage how long it would be until we are given full approval given that:

Valuation is already completed and at contract
A pre and full assessment has already been conducted and the application has also been approved by the senior credit manager, therefore meeting westpacs lending policy’s.
We have no debt or poor credit ( we own our cars outright, have never taken out a loan etc).

Given this I am guessing that the final checks they are conducting are in relation to confirming our financial situation?
We have an 11% deposit (plus extra money in savings), my fiancé works full time and has been in the same job for 2+ years (and in the same industry for over 6), I work two jobs both part time (30 hours a week at one and 5 hours a week at the other on a Sunday).

I have been in my main job for almost eight months and am past the probationary period and the work is related to my uni studies ( studying teaching working in childcare), my second job I have been in for 2+ years (almost three) and have stepped down to one day a week due to my other job.

Is there anything at this point that could derail our application or prevent our full approval? Our broker seems unconcerned and believes we should have our full approval soon. I just can’t help but stressing with all the drama we have had with the valuation shortfall through CBA.

 

Thank you I’m hoping this time frame is right it would be a great relief to us to find out by the end of this week early next week!

 

Just wondering when bank valuations fall short-does it mean that valuation is wrong or vendor is overcharging?Is it good idea to present bank valuation to vendor to know real worth of land.
Apologies for silly question

 

Sort of (2). It usually means the bank valuation is typically more conservative than vendors and RE agents who are counting on emotional buyers to outbid each other to buy their property.

If you are considering suburbs with very few buyers, you can certainly try using a bank valuation in your negotiations. If the suburb is a "sellers market" with plenty of buyers, it will not work. The bank valuation will cost you $$.

 

I see.Thanks
But can you put subject to valuation clause?
something like this and then negotiate if there is a shortfall

This Contract is subject to the Buyer or the Buyer’s Lender undertaking a valuation of the unit and the Buyer being satisfied with the results of this valuation within 30 days from the date of this Contract failing which the Buyer may terminate this Contract of Sale and receive a refund of the deposit.

In the event however that valuer of the unit estimates that the value of the unit is less than the purchase price, the Buyer will provide to the Seller a copy of that valuation for its perusal.

The Buyer also acknowledges that the Seller may undertake its own independent valuation of the unit in these circumstances and in the event that it does so it will provide a copy of that valuation to the Buyer.

At the completion of the valuation process and by no later than 35 days from the date of this Contract the parties agree that in the event that the Buyer or Buyer’s lender’s valuation is less than the purchase price, to use their best endeavours to re-negotiate the purchase price of the property to a purchase price acceptable to the Buyer, failing which the Buyer may terminate this Contract and receive a refund of the deposit.”

 

Why would you want to purchase anything that isn't built yet?

I am not familiar with your contract type. I calculate my own valuation based on recent sales in the immediate area of any property I am considering purchasing or selling. I have always got it correct.

 

I am not placing any offer but was curious in order to mitigate val shortfall risk can one put such a clause especially when buying OTP.

 

Wonder what happened with the OP?