Hi all, We've got a few house and land's that are about to be registered so construction will commence shortly. However the bank came back to us with ridiculous valuations so won't lend 100% of the construction costs. For example current land prices are 100% more than what we paid two years ago. I've spoken to my selling agent and he's preparing further comparable sales data to support his appraisal however what other strategies do people use to ask their bank to correct this type of situation? Thanks
Usually just order another upfront valuation with a different lender - in the hope that it's assigned to a different valuer. Otherwise - prepare three direct comparable sales and query the reports (it's not easy to get them to change their mind though)
I agree with Jamie - get some up-fronts done with different lenders and see how they come back. If you're using a broker, they'll be able to do this for you.
Can I ask what you paid and its currents valuation? Valuations can definitely come in different but double? And on a piece of land? What is the area?
Thanks everyone for your advise. I'm getting additional comparable sales data and can look at getting a separate valuation done. We're dealing directly with a major bank via private banking. @albanga , each block is currently worth around $350k each and we paid about half of that.
A bank won't care a bit about a separate valuation unfortunately - changing existing vals is very difficult, so the reality is that you may have to change lenders.
Depending on the type of property I feel like valuations can be so subjective. We just had a valuation done on our farmhouse and it came back ridiculous IMO. I read through the report and it is full of contradictions (interior of house is stated as "fair" in the beginning of the report and "good" near the end). It also had comments like "overall considered superior" about recent sales on a house that is older, on a smaller block and is significantly smaller in size. I believe the comment was based on the fact that that house is closer to the main rd while ours is down a dirt road which the valuer complained about. I'm not going to challenge it, I'll just sit here and quietly seethe
Happens a lot with new estates. The valuer wont use recent sales by the same developer or earlier releases form that development, as it doesnt reflect a balanced market (when there is only one seller). The solution is getting a new bank valuation through another lender, as Jamie and Jess have explained. Don't bother getting your own valuation done, and I wouldn't suggest trying to challenge the valuation until you had exhausted the first options. Sometimes its just a typo, or the valuer has missed something, but that would usually be picked up by the lender/broker before they give you the bad news.
There certainly are. In the end it's only someone's opinion, esp when there isn't a Contract of Sale involved.
