Which lender and/or valuation company offers the most generous valuations?

Hi all,

I'm very interested to know if there is a lender or valuation company (used by lenders) that has a reputation for giving generous valuations?

And on the other end of the spectrum, any lenders or valuation companies that are infamous for giving low valuations?

This is mainly related to an immediate valuation (within 3 months of purchase), after a renovation.

Also, to add to this - now with the APRA tightening, are lenders and valuers advised to value/re-value a property even more conservatively?

Cheers,

Taku

 

I saw a valuation once where the valuer compared the house to 2 recent sales.
Both sales had >50sqm less land size than this one.
One was built a year before and one in the same tear as this.
Still it was valued 15-20K less than the 2 sold properties. Differentiating point that valuer made was the 2 sold houses were of superior quality.

 

There cannot be because there are thousands of valuers out there and thousands of different areas. One company in the one area may employ 2 valuers - one generous and one a tight arse conservative. Who you end up with is luck.

 

I don't know any, the big ones like Opteon can be kind in some suburbs and nasty in others. These companies got smashed in the GFC and now in the back foot just in case there is another GFC coming. I love Opteon in Melbourne, they are crap in Sydney and good in Brisbane....never consistent and always conservative.

Cheers Ivan

 

The valuation game is also known by brokers as Russian roulette. The variations in opinions between different valuers, whether its different firms or different individuals within one single firm, can sometimes defy belief.

I recently did a series of valuations on dual occupancy properties in WA where each dwelling is standalone with no common walls. LMW Hegney valued them on the money. Opteon valued them 35K under and gave them Cat 5 risk ratings , saying they all had common walls, which made them completely unsuitable security for a bank to lend construction finance against.

So I wondered to myself.... did the valuer even visit the site? Yep- there were photo's on the valuation report, so the plot thickened. Spoke to Valex and the banks. Had a bunch of photo's taken to show very clearly that the valuer was wrong. Had a surveyor prepare a letterhead confirming there were no common walls, and even provided Valex and the banks with detailed plans which clearly proved there were no common walls... and the result? Nada. Nil. Zip. Valex nor the banks could get the valuer to budge.

No matter what the evidence, no matter how wrong the valuer is - they rarely rarely rarely ever change their mind and amend a report in your favour ...

As for dollar value... when lenders start putting the brakes, valuers tighten their backsides quite quite quickly. Their work comes from one source- banks. And their PI and PL Insurance since the GFC is astronomical. There do NOT rock that boat when there is a signal from lenders that the conservative hat needs to go on.



This is an extreme example - #shakeyourheadnow but seriously... tell me these are all being built with common walls
common walls....

 

Banks don't really have control over valuations - they're carried out by third party valuers. From my time in the industry - I couldn't think of one company that was more/less generous than the rest.

Cheers

Jamie

 

Despite there being thousands, I've now had the same valuer attend twice on the same property, a day or two apart, on 3 or 4 different occasions. On my most recent visit, she missed the second bathroom, seemingly both times. I laughed when one repeated the same measurement as 48 hours before, and didn't laugh when the values came back identical each time.

 

I will say I have had a few valuations on my same peoperty over the past 3 years for various reasons.
Each time the same ANZ valuer came and boy was she generous! So much so that I was hoping I didn't get her again because the point of the last valuarion was a price point to purchase my brother from a block of land. Luck would have it she came again and her Val was 50k more than the lowest. Mind you this is a vacant block of land so no idea how there can be so much discrepancy.

 

It's a bit suckworthy when you try to get valuations from different banks... and they both send the same valuer.
I don't think they came twice to mine though, I'm sure they got paid twice.
And valuations were exactly the same of course.

 

Sometimes you can get Director's or QA staff who drive a mindset within a company (conservative or otherwise) but as many have said I believe the biggest variation is between the opinion of the individual valuer. It's just a fact of life that property isn't homogeneous and opinion comes into play which results in differing valuations.

Did they have any logic in their defence? I often have sympathy for residential valuers in terms of valuation figures as it is their opinion and they have to follow bank instructions which aren't always clear but if they are factually wrong they should be willing to amend.

 

If they didn't inspect twice probably they just assigned the valuation from the first bank to the second. Just change the name at the top.

 

I've had this occur. The purchaser went directly through a lender, valuation was ordered and it can up short, making the deal impossible.

Now a bit desperate, the purchaser calls me, we order a valuation for a completely different lender. I also had a chat with the real estate agent to let him know what's going on and to ask him to give the valuer some comparible sales which we'd selected.

10 minutes after the inspection the agent calls me and tells me the same individual valuer showed up. I start looking for a third option because obviously she's simply going to copy the previous report.

The report arrives the next day, on the purchase price. The reason for the difference was because the first bank didn't tell the valuer that there was car part on title, so she didn't consider this in the first report.

I've got to give kudos to the valuer in this case. It appears in both cases she gave honest and considered opinions based on the information made available.

 

What car was it from?

 

Car parking spot i assume?

 

Thank you to everyone for their feedback. Sounds as though there is no black and white answer to this. It's a shame that you could end up investing so much resources and time in to a property and then be left with a poor valuer, that is completely out of your control.

Before getting the property valued, do you guys build a business case as to why you think it should be valued at a certain amount?

I'm turning my property into a 3br to a 4br (inserting a wall), and doing a full paint job, new bath, kitchen, and a couple of other things.
I bought for $232K + $17K (reno) = $249K.
The median four bedder in the suburb is $368K.
I only bought the property in Dec 2015 and getting re-val in Feb 2015 (3 months between purchase).
I would be very pleased with a reval of $330K.

Any suggestions on my game plan for building a business case to show valuers, prior to getting valued?

@euro73, @Jamie Moore, @Rolf Latham, @York, @Bran, @Azazel, @Peter_Tersteeg, @albanga, @Redwood, @Terry_w, @Dazedmw, @teetotal

 

I never have.
I hope you've got one of the aforementioned folk on board as your broker.

 

Some people have suggested that a little handout be prepared and given to the valuer. These should show 3 comparable sales, or more, of settled property. Try to meet them on site when possible - you can quiz them briefly on what you can do to improve the value and perhaps tell them why you need the valuation to come in at $X

but all this can backfire too. Valuers probably have opinions about people who do this sort of thing - 'oh not another investor' and are probably sick of hearing things like 'but there is a property down the road advertised for $Z' which is not relevant.

A better suggestion may be to be patient. If a valuation comes in low wait 6 months and try again. If there is a serious discrepancy, and it is not just wishful thinking, then you can try to challenge it. You can also try another lender where valuations can be ordered upfront and consider refinancing - which may not be ideal if LMI has been involved.