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Renovations prior to Bank Val worthwhile?

Discussion in 'Renovation & Home Improvement' started by miked, 13th Aug, 2015.

  1. miked

    miked Well-Known Member

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    We are planning on doing some renos (not major) to our home in the future. Just wondering if it's worthwhile doing these before a bank val or whether it doesn't make much difference. We'd be looking to take out max equity available after the bank val.

    - Bathroom. Original is still in the place. From the late 60s or early 70s - horrible tiling and disgusting vanity. Plan to spray tiles, get a new shower screen, vanity and mirror. Expect ~$5k but haven't done much work getting quotes etc yet

    - Air con. Looking at getting Multi head unit with 3 individual systems inside (2x bed and lounge). The house already has "ducted refrigerated cooling", which doesn't work.

    - Front yard. It's relatively neat, but needs a bit of work to bring it up to scratch. Wouldn't spend too much here.

    On a side note, anyone have experience with spraying over tiles. Is this worthwhile or is it something that wears off pretty quickly?
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Hiya

    If you're relying on a high val to extract the most equity possible - then yep, do the renos first if money permits.

    What's the LVR you'll be releasing equity at? If 80 or less - you'll be surprised at what some desktop valuations (which some banks use) will come back with.

    Cheers

    Jamie
     
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  3. Azazel

    Azazel Well-Known Member

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    For sure, especially if you have the benefit of a rising market as well.
    If on the other hand the market is going down, you might not see much benefit.
     
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  4. miked

    miked Well-Known Member

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    We'd be looking at 80 lvr after refinancing. Do you mean surprising in a good way?
     
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Yeah good way :)

    Example just now on a file I'm working on - client estimated their PPOR was worth $800k and desktop, which bank will lend against, came back at $840k
     
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  6. drg86

    drg86 Well-Known Member

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    Have just done tile paint on a reno last week. I can't give an opinion on longevity but the results are great. I will put up some pics in reno section next week. Definitely would bring up the val.

    If you are going to get a val done after reno the suggest you ask for a full onsite inspection val. While you may strike it lucky as Jamie said it can also go the other way and desktop come in well below.

    My real life example earlier this year. Had done full reno and desktop came in at 390k, insisted on full val and had inspection done, val came back at 480k... So well worth it.
     
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  7. Daisycutter4

    Daisycutter4 Well-Known Member Premium Member

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    Hi Miked,
    I worked as a bank valuer for over 20 years. Always do the renovation work first – but make sure you complete it entirely before the valuer gets there as they must assess the property "as is, on the day". Banks now have "Risk Rating" guidelines and this can effect the approval outcome. I did a valuation once where the renovation was pretty much totally complete apart from the main bathroom toilet fitout (plumber due within the next three days to complete the job). The owners was using his helpful neighbours loo while waiting for the plumber.
    Anyway, I mentioned this in the report (also was required to provide photos of the bathroom under the lenders guidelines) and the bank knocked back his application because the home was "uninhabitable" without a functioning toilet. Poor bugger had to go through the whole process again a week later.
     
  8. Azazel

    Azazel Well-Known Member

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    Cool, looking forward to seeing how it came up.
    Was the prep a PITA?