I went to an open on the weekend and the house was priced 400-430k. It was swarming with people and had lots of interest. Personally I believe the house is valued around 425k and will probably sell for 435k (judging by the interest). However, I got a desktop valuation on the property and it's only come back as being 386k with a range of 357-414k. Does that mean if I make an offer for 425k I won't get finance approved as the bank is valuing at as 40k less???
Desktop valuations are staticically based, there's a lot of reasons why they might be inaccurate. Make the offer based on what your research suggests the value is. Desktop valuations can contain a lot of useful info for that research, but the number on the front isn't relevant. If lenders use a desktop valuation that comes back outside of the purchase price, they tend to then upgrade it to a full valuation. They don't simply rely on the desktop.
Great answer by Peter, I would just add that some lenders will do a free full upfront valuation so you may want to consider talking to a broker and getting that done. Pick a lender you actually want to go through because otherwise the valuation is useless.
Simon the problem with this is the lender then has a valuation on file for the property. After the negotiation the actual purchase price might be some amount above or below that valuation. If the valuation is higher than the actual purchase price, well done, but the bank will use the contract price as the value. If the valuation is lower than the actual purchase price, you'll need to make up the difference in cash, or use a higher LVR than initially anticipated. Getting a valuation from a bank up front doesn't do you any favours, it's more likely to actually sabotage the purchase. Even if you don't purchase the property, you might end up hurting the person who does if they use the same lender.
Generally desktop valuations are fairly useless for properties on the market - I would avoid using them to estimate value. In real terms they're rarely used for purchase vals, or if they do not provide the result needed are discarded and valuation method upgraded.
If you valuation had a 'range' then it was most likely a price guide rather than a desktop valuation. these guides cant be used for lending, and are indicative only. seems like the guide is pretty close with its upper estimate in any case.
CBA seems happy with a desktop valuation for 80% LVR. They will use the lower of the valuation or the purchase price.
CBA's desktop valuation for one of our IP's came in $22.5K higher than an 'proper' valuation commissioned by another lender. We refinanced with CBA for this reason.
[QUOTE "Daniel Taborsky, post: 174032, member: 3628"]CBA's desktop valuation for one of our IP's came in $22.5K higher than an 'proper' valuation commissioned by another lender. We refinanced with CBA for this reason.[/QUOTE] In my limited experience their desktop valuations have always been very favourable.
Yep - the old Cba desktop valuation can be very handy. They will use them for deals up to 80% Allowing desktop vals, low rates for IPs, cash backs for refinances and a good cashout policy makes them a pretty sweet bank for investors at present. Cheers Jamie
if you do a reno and a valuer values it low can you use a desk top val instead? (if it's higher) and which banks allow this?
Full valuation always overrides a desktop valuation. Once you've gone full, you can't go back (with that lender at least).
