Valuation coming under

Discussion in 'The Buying & Selling Process' started by jins13, 12th Sep, 2016.

Join Australia's most dynamic and respected property investment community
Tags:
  1. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Jess, do the vals come in slightly under or way under? It seems like they want people to cough up the differences in order to get the deals through and now with the expensive/ higher rates, it's really making them undesirable.......
     
  2. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    4 properties probably just makes you a, "Broke investor but with a light at the end of the tunnel". ;)

    After Liberty, a combination of three things:
    1. Play the waiting game.
    2. Pay down debt.
    3. If you've still got lots of money for deposits, consider commercial.

    Hoping for lending criteria to improve is like me scoring a date with Charlize Theron. It could happen, but I'm not holding out for it.
     
    jins13 likes this.
  3. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Thank you Peter.

    Thinking some of my options:
    - Pay my $42k in HECS/HELP debt. It'll be a 8% pay increase per year for me
    - Granny flat constructions for some of the IPs.
    - Tighten my belt and save for further purchases.
     
  4. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,130
    Location:
    03 9877 3000
    Most bad valuations tend to be more than 10% below purchase price. It's fairly easy to argue that a purchase price could be 5% higher or lower simply based on the weather on the day of an auction. If the valuer thinks you're close to market value, they'll usually simply agree with the purchase price.

    If your broker is recommending Liberty, there's one of two conclusions:
    1. They're doing a terrible job and don't know what they're doing, they should be able to find better options.
    2. They've done a great job getting you this far, Liberty is probably the best solution at this point give you've got very limited options.

    I suspect your situation is really around option 2.


    HECS/HELP is probably the cheapest loan you'll ever have, but it does affect your serviceability. If you've got the capacity to pay it off, it might make the difference in the next IP or two.

    Granny flats don't add much capital growth in my general experience, but they are a good source of cash flow. The cash flow may not improve your servicing in the banks eyes, but it's probably going to be close to neutral and will help you save more money. It's probably a good option.

    Saving and investing go hand in hand. Always recommended.
     
    jins13 likes this.
  5. euro73

    euro73 Well-Known Member Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,125
    Location:
    The beautiful Hills District, Sydney Australia
    If you are maxed out at Liberty, there are no better options. You need to increase income or retire some debt ...
     
    jins13 likes this.
  6. Jess Peletier

    Jess Peletier Mortgage Broker & Finance Strategy, Aus Wide! Business Member

    Joined:
    18th Jun, 2015
    Posts:
    6,673
    Location:
    Perth WA + Buderim Qld
    Or go commercial lease doc loans.
     
    jins13 likes this.
  7. teetotal

    teetotal Well-Known Member

    Joined:
    7th Nov, 2015
    Posts:
    736
    Location:
    Sydney
    Insider insight provided by a bank employee (family member) - banks have no influence of any kind on the valuation company. They are independent and are selected randomly by system from a pool of valuation companies (however the selection can be overwritten).
    Generally, comments can be added by bank to the valuer for any requests but valuer is not obliged to consider them. Every aspect of valuation is at discretion of the valuer.
     
  8. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    41,667
    Location:
    Australia wide

    I disagree. The banks tell them on what basis to value for example a sale within 1 month v a standard 3 month marketting sale. The private lenders need a quick sale wh8ch reflects the price.
     
  9. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Currently, waiting for the offer to be accepted by the vendor. Once it is, will let you guys know of whether the val comes on the money.
     
    Perthguy likes this.
  10. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Offer accepted at $450,000 for a property and praying that the val god is going to be good to me and it comes back at the contract price. Concerned as Residex and Allhomes thinks the home is valued at $386,000.
     
    Perthguy likes this.
  11. RetireRich101

    RetireRich101 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    2,149
    Location:
    Sydney
    You can only pray now, since Liberty is your last stop...
     
  12. bread_boy

    bread_boy Well-Known Member

    Joined:
    20th Jul, 2015
    Posts:
    311
    Location:
    Floater
    Had a val come back today for my IP in Sydney SW. Came back $75k under for the same place 6 months ago.
    My broker says it's not uncommon for outer Sydney atm.
    Going for a 2nd val in a few days, fingers & toes (and any other limb) crossed!
    Both being conducted by a big 4 bank.
     
  13. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Makes me wonder how investors are able to get around all this in NSW. Going to make it really tough to do anything and buying things in auctions and OFP without losing sleep at night.
     
  14. bread_boy

    bread_boy Well-Known Member

    Joined:
    20th Jul, 2015
    Posts:
    311
    Location:
    Floater
    Got my 2nd val on Thursday. Came in 15k higher so only very light improvement.
    I have to correct my previous post however: Its been almost 13 (not 6) months since original val so its dropped about 60k or 7.2% in just over a year.
    Seems like par for the course in Sydney SW.
    If you are planning to draw equity from IP's in outer Sydney I would you will have to re-configure your expectations.
     
  15. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Val completed on Friday with the managing agent on site. The valuer was on site for 5 minutes only and hope that it comes back at contract price.
     
  16. jins13

    jins13 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    2,357
    Location:
    Sydney
    Thank god the val came back at contract price! The agent was on site for the val and was on the phone to the valuation company, so thank god for the agent and my broker!
     

Property Investors! Ready to Pay Less Tax? Estimate how much Property Depreciation you can claim on your Investment Property. Washington Brown's calculator is the first calculator to draw on real properties to determine an accurate estimate.