Hey Folks,
my broker is telling me that St.George (SG) will not tell them who the panel valuers are for the area one of my properties is in. Got any advice on what to do next?I would like to pay the panel valuer to give me a "what if these were strata titled?" valuation. I will use this information to help determine the following;
1) How much additional equity I am likely to receive from SG if I go ahead with the strata subdivision of my existing units.
2) Have a supporting formal valuation from SG's panel valuer if/when it comes to arguing my case with the bank for a better valuation.Thanks folks,
EmptyvesselYou could ring a few in the area and see if they are on St George's panel.
Also try rining or talking to some St George people yourself as some may give them the valuer.
Also tell your broker to try asking his BDM at St George for help.
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
The broker might not have a contact at St George – they’d have to be lining up a fair bit of business for the Dragon in order to gain one, otherwise they’d only have the broker help desk to contact.
I like Terry’s idea of ringing the valuers. How big is the town? Shouldn’t be too difficult to narrow it down in a smallish area.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Thanks guys. I found a similar piece of advice by Terry on another thread. Basically ask for the "what if" valuation and ask the valuer which lenders they can value for.
My broker is a Flame Dragon broker. Puts them at the top of the broker list AFAIK.
Region is Shoalhaven. Not huge. Probably 4-5 main valuation firms. 3 of which I am pretty sure would be on the bank panels.
I will make those calls today.
A related question – Is the private valuation expense tax deductible?
Perhaps as a borrowing expense?
Yes if the property is for investment.
As you mention becomes a loan cost deductible accordingly.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Also be aware that although you obtain a valuation from a Panel Valuer the lender, in this case St George, may not accept the valuation.
A valuation instructed by a lender for 'mortgage purpose' may differ from a valuation instructed for private / Market Value, particularly on a 'what if' scenario
To clarify, I have worked for a number of lenders/banks and sometimes such valuations have been rejected
Thanks Marjac. Your experience helps.
I am doing this exercise to make equity available in the property. If the valuation shows that the 3 villas I own (single title) are worth more on the market as 3 separate, strata titled units, I can make an assessment about if the exercise is worth doing.
However, one thing remains unclear to me. Will the bank recognise the additional value after I have strata titled? And thus allow me to use the equity to borrow again on a new investment.
I have no intention of selling them, I just want the equity available to me.
Have you got any thoughts that might help me decide if this exercise is worth pursuing?
FYI – I spoke to two valuers, both are on the St. George panel.
Consulted with my broker at length and I have a way forward I am comfortable with. I have two options, neither come with a guarantee, just a degree of probability based on the private valuation I get;
Once the strata title is accepted and processes by the bank I can;
1) Apply to create a new LOC account. This triggers a bank valuation on each of the 3 new properties and any others I choose.
2) Apply for a loan for a new property purchase. This would trigger an equity valuation and essentially step (1).I will probably go with Step one soon after titling. This will give me;
(a) Certainty on the equity available to purchase. Thus define my upper limit.
(b) Funds to use for a deposit, which may be substantial depending on the state and vendor terms.Now I need to get some more certainty around the strata costs and ongoing holding cost increases so I can determine a solid ROI for this exercise.
Another option is to obviously switch lenders. But this does not seem to offer any benefits right now. Just a bunch of cost and hassle.
EV
Sounds like you have cross collateralised your properties. This is both dangerous and will be restrictive down the track.
Best to untangle it asap before you get any bigger.
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
St George bank don’t work on a BDM model …even if your on the flame Dragon broker.
The Dragon has a few valuers on their panel- so ordering your own would only be helpful for your own “research” as the dragon will not accept self ordered valuation;
1. It must be ordered and instructed by them
2. the valuer is randomly chosen. So may not be the same as yours.
3. Even if it’s the same valuer, they will only honor their instructed one.To be honest, im not sure when lender you could go too for this purpose…even if you go to a bank that allows self-order valuation like NAB and ANZ – The bank will only accept current valuation based on current condition- not for”future” prediction etc…
My suggestion, order private valuation ( tax deductible) – If the figures comes up right, then it should n;’t be too much off from the “real thing”
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks Michael,
great info and exactly what the valuers told me. As such that's close to the conclusion I have come to.I am going to talk to a bunch of REA in town and get market appraisals. Cross reference this with another data source like RPData. Then take off 10-20% to give myself a conservative risk estimate. If this estimate comes in too low on the ROI, then I will make the decision to use the valuer or not. But I am thinking that with all that info, the valuer becomes almost useless in this scenario.
Oh. And my broker advises me that I can get free valuations on any of my properties. So I may as well use up these as well.
Now, my last major hurdle is wrapping my head around forming a Strata Title, By-laws, Body Corporate and associated costs. This seems somewhat complex right now. I spoke with a strata management company that can handle it and he scared me with the complexity. So I need to educate myself alot more. I will start a new thread on this specific topic to see if any pearls of wisdom are shared.
I’m note 100% sure what your property is like, or where it’s located etc…BUT i strata titled my block of 4 units in Rockdale ( which was single title before)- Total cost was around $55k + 15k for professional fee and DA approval
1. Separate water meters and plumbing -$25k Plumbing took up most of the cost.
2. Separate car port and new concrete foundation- $15K
3. Re lined the drainage and side alley ( for water flow)- $10k
4. Another minor changes – $5k
4. Professional fee and DA approval – $15kI think my place required more work then normally-well that’s what i was told by the engineer hydrologist anyway…
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks Shape. A couple of clarification questions, if I may;
a) Who did you pay the professional fee to? Surveyor and Solicitor. Anyone else? e.g. Did you pay someone to setup a body corporate?
b) Do you even have a body corporate setup for those units?In relation to the expenses you mention, in this case;
1-3 don't apply, these are already in place.
4. Could be some minor changes. I will wait to see what the surveyor comes up with.
5. DA approval seems to be <$1,000 based on my discussions with council.Thanks,
EVContact a real estate agent in the area. They should have valuers details within their phones
You must be logged in to reply to this topic. If you don't have an account, you can register here.
