valuation-use equity-buy 1st property. Done this?

Hi Daneye
I have recently done all you are about to do. I found out from my bank when I wanted to know how much i could borrow to purchase our first IP that they valued our home at $250k. I thought that this was conservative and when I asked more about it the bank said that they just drive past the homes and place an estimate on the value themselves (probably in conjunction with council notice). I decided that it was in my best interests to get a qualified valuer to do an independant valuation on our property. It cost $330 but his valuation report came in at $315k which is enough extra equity to buy another property so I felt that the $330 was worth it. The reports was supported by recent sales in my area and compared these properties to my own. It also had a section in the report as to what the expected rental would be on my property (this was blank as they weren’t asked to include that info for a PPOR).
I would find it hard to trust the valuation of an REA, they have a vested interest in it no matter what the reason for the valuation. I recently looked at a home on the market for $192k + in my local city on 1100mt sq. The home is old and original and the REA told me that it was on the market for ‘roughly’ land value. I was aware of the land value as my parents lived in the very next street and I had asked mum what the council valued her land at; there was $50k difference although mums land area was slightly smaller. You have to get someone independant. If I decide to make an offer on this property it will still only be after I get an independant valuation done on it. The banks, vendors, REA’s and your own peace of mind can’t argue with them. I just consider it part of my due diligence.

Julie Fisher
Daryl Fisher Homes

Lenders will not accept your valuations, they must order them. So it is best to get a rough idea from agents etc, and then ask your bank for an increase (or separate loan). It is best to have a separate account for the increase, for tax reasons. maybe a LOC, depending on the rate etc. Generally you can access up to 90% of the value, so work out what the place is worth, then estimate 90%, minus your existing loan and that is the extra equity you could get your hands on – if you have enough income etc.

Terryw
Discover Home Loans
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Well, if you knew the valuers on the bank’s panel you could order your own valuation, but it would have to be reassigned to the bank – for another fee. ANZ is the only major bank that lets the broker order the valuation directly.

Terryw
Discover Home Loans
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