recently bought a property in Orange and got the financing with St George, when i got the valuation they valued it under my buy price from $163k to $150k so a significant gap. just want to know if anyone knows about the valuation this bank does, are they normally tough? is there anything i can do to get a better valuation through them?
samIn Dec 09 i purchased a property in South Penrith for $288,000 and St George valued it at $290,000 so i was happy with that.
strange… why do you still want to go ahead despite low valuation?
already went ahead with it, i think the place has a lot of potential and the area is definately growing. also it was renovated and leased for $155 per week but i took it up to $210 pw, not sure if theat will make any difference when i revalue?
GOM – Perhaps shahabr knows something the bank doesn't? Okay…maybe not, but I have seen many people re-sell property for much more than the bank valuation only a short time after settlement.
By nature, the bank valuers are conservative and are becoming more so due to audit requirements. They aren't always wrong, but if there aren't many comparable sales in the area then sometimes the valuation can be a little off.
The banks don't usually value but they send the work out to valuers. They use different valuers for different areas, so you cannot generalise.
Ask them for a copy of the valuation and see what comparable sales have been used, and see if you can find higher comparables to justify your value. Next time the valuer comes give him a list of comparable sales so you can help him justify the price. Also ask what you can do to lift the value.
Rental yield doesn't really affect values because they need to compare the place with similar places recently sold.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
thank you thats great help
just for my curiosity… there is 10% difference…
Hi Is it common practice to see the valuation when you buy a property, or have you sought a valuation after you bought to determine your equity?
I have not seen valuations of properties that I have bought. I have only been told that valuation was favourable and thus loan was approved.
The only valuation that I did see was for a property that was significantly below purchase price which I subsequently did not proceed with the puchase of.
cheers
SonyaHi Sonya
No, its not common. The bank will not offer to let you see the valuation usually. You will have to ask, and then many will still say no.
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Bank valuations seem like a bit of a mystery to many, and most people are happy to stand back and let the valuation happen. In my opinion, a valuation is a crucial part of the property finance equation. I put a lot of work into valuation support documentation and find that a) the valuers use this information, and b) my "valuation" is always on the mark. I don't get surprising valuations – for better or worse – and recommend to others to do the same. It's important research for your investment, and it helps the valuer to come to the same conclusion you did! As a footnote however, this information I provide to the valuer is only "fact based" not opinions.
hi christian, thanks for the reply, what information do you put into the supporting document? i wasnt aware that i could give supporting document to the bank for the valuation, is that standard practice?
do you have any examples you could provide, obviously with your informaiton removed so it remains private
Cheers
You can go a step further than that shahabr, you can arrange your own valuations and liaise directly with them. If you do this you will need to ensure your chosen valuer is a part of the board for that bank. If you think about it, this only gives your bank confidence that you know what you're doing.
I'm not great with the technologies, so PM me and I'll see what I can do about getting you some info.
My friend just SOLD a superb waterfront in Surfers for 3.7… valuation came in 2.8, deal dead!
ouch! that is some huge variance and shit for your friend
I was getting a home built in Melbourne. My builder advised that they had alot of troubIe in the area with a couple of valuers under valuing. I found out which valuers were on the St George Panel in the area and asked my builder which he would choose. He selected the one he knew would come in at the right level and got them to do a valuation. When I applied for the loan, I provided the valuation from the panel valuer. Really simple from there.
Very clever.
Sometimes hard to get the panel list
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