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Worth of bank valuations

Discussion in 'General Property Chat' started by hash_investor, 25th May, 2016.

  1. hash_investor

    hash_investor Well-Known Member

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    I was wondering what the bank valuations really mean because I am having very different experiences with the bank. A recent finance that my bank approved was just an electronic valuation. Good for me but that didn't look very good on them.

    Another instance is a house which the bank has valuated at least 50K more than the owner is willing to accept. Now that is serious. Bank is paying 50K more than anyone is willing to pay. Is that a good deal or a bad one?
     
  2. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    Bank valuations will vary from valuer to valuer - and bank to bank.

    Some banks allow desktop valuations (as you had with your recent application) and they, at times, can be quite generous. Other times - they can be a lot less than your estimated value.

    Some banks will require a full valuation (a physical inspection). Generally speaking - if the valuation is for a purchase then the vast majority of the time the valuation will come back at purchase price. If the valuation is for a refinance - then the result tends to be lower than the customers estimate (valuers and home owners rarely agree on a properties value!).

    Cheers

    Jamie
     
  3. Plutus

    Plutus Well-Known Member

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    From my (limited) experience so far I don't think they are worth much.
    I got a re-val done on my first IP last year, came back $20k below what I know is market value as I track every sale in the area.
    Less than 6 months later I've had it re-valued again as I'm looking at options RE acquiring a PPOR and the valuation has jumped $50k, putting it at $25-30k over what I know the market value is.

    Its why I'm pretty dubious on people touting bank valuation as if its the same as market value.
     
  4. Big Will

    Big Will Well-Known Member

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    I had a bank value change by $150,000 in 10 months or 25% more, we did spend $10,000 rendering the house but not bad growth for less than a year.

    If I compared the desktop val they did a couple weeks earlier it was $80,000 more doing a physical inspection or 12% more.

    Read what you want but it the bank val one year ago was way off the mark compared to the most recent one which is probably 5% less than market val.
     
  5. Giuseppe

    Giuseppe Active Member

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    Aren't sworn valuers meant to "swear" by the law and a certain code of ethics and not just aim to appease the banks? Maybe I'm reading too much into that...maybe they just swear a lot.
     
  6. Hanison

    Hanison Well-Known Member

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    I had a bank val come back at 50k more than I know I could sell for beginning of this year.

    I fainted and gave them a round of applause.
     
  7. Mumbai

    Mumbai Well-Known Member

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    Unconsciously or Subconsciously?
     
  8. Hanison

    Hanison Well-Known Member

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    I'm like a fainting goat. Once startled I drop to the floor. Hahaha

    There wasn't even comps at that value.

    Paint and carpet added 50K ?! - only in the 80's and 00's ....