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My low purchase price lowered the desktop valuation by $60k

Discussion in 'Property Finance' started by legallyblonde, 29th May, 2016.

  1. legallyblonde

    legallyblonde Well-Known Member

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    As the title suggests, I recently purchased IP2 for a great price and I am thrilled. Purchase price was sub $280k and the desktop valuation came in at about $340k (which after I spent a few k tidying up is pretty accurate).

    However, four weeks after settlement I have asked the bank to complete another desktop valuation just to see how much equity I had to play with.. Only for the valuation to come back at the purchase price!

    In my case, I am happy to wait a few months for the valuation to go back to normal. My income situation isn't going to improve enough this year to make a difference. I would need to be on 70k p.a. to be able to borrow money again anyways. Dang APRA


    I am with CBA (as I am casual and regularly have a few jobs on the go). I am hoping that in the next six months or so things will sort themselves out... So when I eventually get the right level of income (which might happen with overtime over the summer) I will need that equity to keep the cash reserves separate.

    Just sharing in case others are hoping to release equity soon after purchase.
     
  2. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    The CBA desktop vals can work for or against you. In cases like these, it would be best to have your broker order a desktop val before you purchase as they're valid for 90 days :)

    If anyone else runs into this issue, be aware that desktops are only valid up to 80% LVR so asking to borrow over 80% will trigger a full valuation. Or your broker can order a full val 90 days after the last val was completed, regardless of the LVR.
     
  3. Elives

    Elives Well-Known Member

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    how soon after settlement have you been able to use that same desktop valuation? as it's only valid for 90 days
     
    Last edited: 29th May, 2016
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  4. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    That depends on whether an existing valuation is in the system. If yes, has to be 90 days after the existing val took place. If no, no need to wait :)
     
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  5. Elives

    Elives Well-Known Member

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    I'm a tad confused, in the scenario where you get one done idk say 2 weeks before settlement, is this the valuation that would be in the system? i'd think the banks would do one but that would be around 10 days before settlement etc? so you have to wait 90 days after that valuation?

    also what happens if you do the above but then say 60 days from settlement you get another one just to check the price. you then have to wait another 90 days? :s
     
  6. Redom

    Redom Mortgage Broker Business Member

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    I like the thinking Steven - quite nifty.

    Note that giving CBA credit a pre-settlement valuation post settlement and trying to draw equity out based on it has a high degree of financing uncertainty to it. Credit has the discretion to request a re-do of the val, order another themselves, upgrade the val - etc. This is significantly more likely given the settlement date of the property they just funded was AFTER the valuation date that was provided.
     
  7. Watson1

    Watson1 Well-Known Member

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    I don't think it will work.

    Every time I provide an AVM with my application, the bank seem to order another AVM. This is why the Valex number is different from the upfront AVM provided and the one that is shown on the Commbroker website.

    I am fairly confident they check what is the current AVM is regardless of the upfront valuation provided.

    Whilst the AVM does state it is valid for 90 days, It would be interesting to see what the bank would say in relation to the discrepancy.
     
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  8. tobe

    tobe Well-Known Member

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    When you order an avm the system asks the purpose. If it's a purchase it asks the purchase price, not the customers estimate. If it's a refinance they ask for an estimate. Using a refi val wouldn't be eligible for a purchase application. Having a recent purchase recorded would be the biggest influence on any future refi avms ordered for at least the next 6 or 12 months.
     
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  9. albanga

    albanga Well-Known Member

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    Sorry to thread hijack but had a valuation question. I think i know the answer but keen to get feedback from the experienced.

    I got my block of land valued by 3 valuers before purchasing from my brother (350, 375, 400).
    I purchased it for 345k 2 months ago, so 30k below the average valuation.

    In about 6 weeks I will go for building finance and will be lending 80% which will be the lower of land+contract or completed valuation.

    If the land+contract is going to be the lowest then will they simply use the purchase price I paid for the land? Or if enough time passes (90 days as Steven says above) then will they value the land again and if so hopefully value it back up to what it was originally valued at.

    Its not a big deal for me either way but just generally interested.
     
  10. Rolf Latham

    Rolf Latham Inciteful (sic) Staff Member Business Plus Member

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    Doesnt help you now, but may help others

    Pull the desky before the purchase val is done.............. and submit top up before val is stale

    ta
    rolf
     
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  11. Steven Ryan

    Steven Ryan Mortgage Broker Business Plus Member

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    Works a treat.
     
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  12. jchan86

    jchan86 Well-Known Member

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    Hey Rolf - could you please explain this in layman's terms? lol

    I think it already is though which shows my intellect at present ;p

    If I paraphrase correctly....

    Before the settlement date, request a desktop valuation.... then post-settlement (say 2-weeks after up to a max of 90-days since valuation) use that previous desktop valuation conducted pre-settlement, for a top up?

     
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  13. Elives

    Elives Well-Known Member

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    could you use the refinance after you purchased the property for a top up?

    Cheers,
     
  14. Elives

    Elives Well-Known Member

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    With the avm you pull before purchase is that a "refinance val" or a "purchase val"?

    and it is possible to then use it within the 90 day period? even if the new avm valuation had dropped? because of the purchase price?
     
  15. tobe

    tobe Well-Known Member

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    That seems to be what the other brokers here are saying, but its not something I have had direct experience with. Sounds like a pretty cool trick.
     
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  16. legallyblonde

    legallyblonde Well-Known Member

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    Update time: My offer was accepted March 3. Settled in early May.. In this time the valuation according to the CBA app has gone up $2,500. I would be annoyed, but luckily I cannot borrow money anyway!