Does anyone know why a bank would get a certified valuation done and why another an inhouse valuation only? And how long are the valuations valid for? Moo.
because they all have different internal policies and risk management approaches I guess.
I am just guessing but I expect there is no set period for a valuations validity. It would just depend on how dynamic the market has been (or percieved to have been) between the valuation date and the time a review is needed.
just thing about this and I have never, in my whole life (and I am an old guy) had to get a formal valuation done…..weird
When the market was moving, I know my lender made it a once per 12 month policy to revalue property.
I wouls say one for themselves to know what the REAL valuation is, and the other for the purposes of providing you with a figure as a Loan Ratio, which they would then use as a guide to provide you with investment loan of 60% of! That way in this climate they are covering themselves, and you to really, by lending technically maybe 50% and not 60%, to save margin calls later if the valu drops. This is probably not a bad thing, given what has happened in the US.
Yes great answers – thank you – makes a lot more sense.
Banks will generally only revalue properties when the mortgagee requests to make a change to their finances ie new loan or restructuring. That said, it won't happen more frequently than every 3 years unless there has been a major correction in the market and your properties would be in those areas affected (eg Sydney Western suburbs).
Very few banks have in-house valuers as this is no longer effective for them to bear the risk/liability that deficient valuations may bring, they use external contractors to undertake this work and to bear the risks. In-house valuers are used to review the valuations and performance of the contract valuers.
There are moves afoot in the industry to require banks, like some other classes of property owners, to undertake regular valuations of their loan portfolios – needless to say this is a risk management exercise and they are required to have a fair understanding of their risk profile and how changes in the market may have affected their ability to claim on these 'assets'.
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