Hello,
I went to one of the local bank and tried to check my borrowing power. The bank used the value of the house I live in (built brand new in 2006) which is far low then my expectation is. I beleive they used the purchase cost based estimate of 2006.
The market value of the houses similar to mine is 10-15% more.The equity in the house is around 50% of market price. Should I hire a valuer to prepare the appraisal so the bank can reconsider the amount they are given me.
Please post some trusted and not expensive valuers in Sydney.
Thanks
I'm sure the other lenders on the forum will have experienced this even more than I have but, without knowing the specifics, this is quite common at the moment. There are a couple reasons behind this (at least with my former employer), the banks have been getting much tighter on their lending criteria for the last 12 months and one way to tighten up is to be much less optimistic on valuations. Also the information the banks and valuers compare against is completed sale prices and so there can be a bit of lag if the market has moved recently.
Lastly I wouldn't recommend getting your own valuation as I would be surprised if your lender even looked at the report (in my job we would be instantly dismissed if we used an external valuation on any basis). This may be different with your bank but anecdotally it is getting harder to use externals.
Sorry I can't be of more help with this one but hopefully some of the other peeps can help.
Cheers,
AndyAnother problem (and no offence Vitale) is that market value is not always sale price. Have a look at what properties are selling for, rather than what they are being advertised for.
If you still think your property is worth as much as you think it is, then find out from the bank which valuers are on their panel. All banks have a few valuers that they use. The banks won't accept valuations from valuers not on their panel. Get one of these valuers to come and independently value your property, then present it to the bank, along with evidence of why the other valuation was so low (ie, new sales that were not recorded at the time of the earlier valuation) and see if the bank will reconsider.
Another option is to go to a mortgage broker rather than your bank and see if you can get a higher valuation from another lender.
Good luck
K
Thanks fellows for your valuable heads up. I like the idea of getting some more information from a lender (bank) about their valuers. I hope it would help.
Regarding the properties in my neighbourhood. I see many older houses on smaller blocks being sold at prices higher then our build costs. I think 15% increase from bank's value would be suitable. By the way a house when built has nothing around it e.g. fence, landscaping, pavements, garden… The value of the package has never been assessed in our case.
Will let you know what happened.
Thanks
Hi Vitale,
Has your bank done a valuation or did they just give you a guestimate? The others are correct in saying it is pointless in getting your own valuer. Also if your looking at borrowing against the equity it might be wise not to go over the 80 LVR incurring LMI as I believe the valuers are aware of the circumstances for the valuation and will value accordingly.
I may be wrong but I presume a valuer being on a banks panel is worthwhile.Hydra
Hello Hydra,
I actually chatted with the lender yesterday and what I'm hearing is that if I prepare my valuation the bank can take it but will send their own valuer regardless. So, they would most definetely rely on thier own report. However, the bank is reluctant to sent the one without me engaging first. They are happy with what thier system shows – final building cost.
I did not get the details of the panel valuers as yet, though I might not get it.
Cheers
Vitale
Hi Vitale,
As others have previously stated the valuers and banks are being far more cautious now in their property valuations. I have just refinanced loans on my two investment properties and the bank valuations were at or below what I bought the properties for nearly two years ago. I was looking at buying another property that I had Richard do a residex report on and the bank valuation came in ten percent lower than the residex valuation. Thats just the way the market is at the mometn unfortunately. good luck
SonyaI have just received a phone call from my lender who has done a free home valuation for me. the value is now increased by almost 20%, and the chest is opening up wider now.
thanks
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