Valuation for auction property

Hi Folks,

This may sound overtly cautious but I don’t want to go through hassles of multiple loan applications hence asking here.

I bought a detached existing house at auction in Monash Council (VIC) for 1.45M last month well under my pre approval limit(full assessment) with long settlement period.

My Westpac banker is now pestering me to submit full app as pre approval is expiring in 3 weeks. Only step remaining is to order valuation as it will be high LVR loan.

I checked ANZ Hometrack estimate and it came out to be 1.33-1.56 (midpoint 1.45) but Westpac estimate using Corelogic data is 1.21-1.57 (midpoint 1.39). Corelogic estimate has been increasing by 10-20k every week since auction but then they haven’t updated it since 29th March.

What would you recommend my next course of action should be -

(1) Stop worrying too much! Purchase price is well within range and there is 99.99% chance valuer will accept auction discovered price 1.45M as correct valuation if ordered now.

(2) Wait 1-2 week for Corelogic AVM to run and update latest sold prices in its model and then it should give similar to Hometrack estimate. Once I see 1.425M+ on Corelogic report, I can give go ahead to my banker to order valuation and adjusting for 2-3 business day valuation turnaround time I might just be able to submit full app 1-2 days before pre approval expiry.

P.S. sorry can’t share address due to privacy reasons but be assured it’s rectangular south facing standard block far away from power lines/M1 and near to schools and parks.

 

Your seriously over thinking this. Just get on to getting the approval and be done with it. Not sure what waiting will accomplish. Don't over complicate things.

 

It seems pretty ridiculous not to just apply asap.

 

You should have been applying for the loan the Monday after the auction. You are only putting yourself at risk by delaying.

In 17 years or mortgage broking I've seen only 3 properties sold at auction get valued below the purchase price. One was a purchase on "The Block", the valuer noted it was over marketed. The other two were development sites.

May people worry about the valuation result when they purchase. In my experience they're worrying about the wrong thing.

 

Got it.

Was thinking too much. Called my banker and asked her to go full steam ahead.


P.S. looks like Corelogic AVM updates Tuesdays midday, their estimate just went up by 10k again so it’s 1.4M (1.23-1.57) now

 

You have committed to a purchase. You have 42 odd days (or whatever the contract says to get your house/finances in order). Banks are overloaded with applications and taking longer for full approvals. Valuers are run off their feet atm.

Enough procrastination, push the button or you may miss the boat.

Edit: AVMs mean jack it's a wild guess at the best of times which may corellate with reality if the stars are aligned.

 

You already submitted the app moving it to full approval wouldnt hurt your credit file, nor would it add another enquiry.

A valuation should have been ordered straight away after winning the auction. Most Bankers cannot order upfront valuations and mainly only brokers can, hence he informed to move it to formal so he could order the valuation.

You've kinda wasted a bit of time delaying the process and actually putting yourself in a worse of position.

 

Why do you care about the Corelogic AVM, it's irrelevant, a full valuation is likely required due to the high LVR.
Your Westpac Banker is 'pestering' you because you've signed an unconditional contract with a settlement date that needs to be met, get cracking!

 

westpac banker told me valuer might just do desktop valuation. Wouldn’t Hometrack/Corelogic AVM estimate/range play a role in desktop val?

 

No, they're using a valuer not a computer model.

 

Pardon my ignorance, what does desktop valuation mean if valuer don’t use Corelogic or similar tools?

 

There's a possibility the Westpac Desktop will be higher or lower than the corelogic estimate, they do not use exactly the same systems/data.
In any case, if it comes in lower than purchase price the banker will push it to a full valuation anyway so why wait?

 

Desktop vals are not AVM's - most lender AVM's and Desktop's pull data from multiple sources not just corelogic/hometrack.

 

A valuer, by nature and regulations, must use confirmed sales data. Computer models use a wider range of non-verified data.

 

It's just an internal algorithm thr banks use for estimating the valuation which they could use as part of the loan process, mainly if the deal is below a certain LVR .

 

Just to understand it further - assuming “confirmed sales data” means recent settled sales. Wouldn’t waiting couple weeks after auction so that recent auction sales are settled (at least 30 days settlement ones) help valuer to arrive at the price I paid in rapidly rising market?

 

Mid July.

 

You don't even know if your valuation is going to come back low right now.
99.99% of the time an Auction purchase determines the value of the property, I've not once seen an Auction purchase valuation come back lower than the purchase price.
Why are you so worried about it? Is the bank charging you for the valuation or something?