All Topics / Help Needed! / Challenging Valuation

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  • Profile photo of wealthcreationwealthcreation
    Member
    @wealthcreation
    Join Date: 2010
    Post Count: 21

    Hi,

    I did a valuation on one of our IP.

    The valuation is bit less than expected.

    However, after reading the valuation report, I noted that the valuer did not consider any comparable sales in the last  2 months.

    All the comparable sales were 3 months or older.

    Is there any tool or report or way to get comparables sales in the past 2 months ?

    Also, if that can be considered by the valuer.

    What is the time-limit for challenging the valuation ? Anytime within 3 months ?

    Any help/inputs appreciated.

    Thank you in advance.

    Best Regards,

    WC

    Profile photo of TheFinanceShopTheFinanceShop
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    @thefinanceshop
    Join Date: 2012
    Post Count: 1,271

    1. You can challenge the valuation but you do need recent sales that are no more than 6 months old 

    2. If you have conducted any specific renovations to the property you need to inform the valuer

    3. In terms of increase percentage you may be able to ask for the valuer to increase the amount. Again depends on the percentage and the valuer

    4.. Various lenders will use different valuers so unless there is something restricting you from moving to another lender – you could order a free upfront valuation with most lenders. This could come back higher 

    TheFinanceShop | Elite Property Finance
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    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Hi wealthcreation

    A residex report or something similar should show previous sales of comparable properties within the area.

    The same data can be found on some free websites – I think http://www.onthehouse.com.au/ might do the trick.

    If you can come up with three direct comparable sales within the last 6 months, you might have a case.

    Generally speaking, valuers don't like to move on their initial valuation but we've successfully challenged vals in the past.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
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    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    WC why did you need the valuation?

    If it was for additional borrowing then always look at another valuation firm.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
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    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of wealthcreationwealthcreation
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    @wealthcreation
    Join Date: 2010
    Post Count: 21

    Hi all,

     

    Thanks for all your valuable inputs.

    I got RP Data and Residex report and report from local RE agent.

    After reviewing both reports and if I use Residex comparables sales method then the valuation is about 20% higher then the one did by the valuer.

    However, I am not sure how to pitch this to the valuer or go to another lender.

    The ultimate aim is to borrow against this asset for purchasing the next one with 80% LVR.

    Currently I am in the LMI zone. So trying to get down to 80% LVR.

    I prefer not to use the cash for the next purchase.

    Any further tips/successful experience of similar situation would be appreciated.

    Thank you in advance.

    Best Regards,

    WC

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
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    The other issue you might come across is if you go to another lender who uses Valex there is no guarantee they wont use the same valuer and you will be back to square 1.

    Just make sure you go to a lender that orders a valuation upfront before doing a credit search otherwise you might have unnecessary credit entry that will affect your credit score going forward.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

    Profile photo of kong71286kong71286
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    @kong71286
    Join Date: 2009
    Post Count: 261

    I was under the impression that once a valuation has been done it is very difficult to dispute it, and you would need to wait at least 6 months before you can revalue your property again

    Profile photo of TheFinanceShopTheFinanceShop
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    @thefinanceshop
    Join Date: 2012
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    Difficult to dispute yes – impossible no. We have successfully convinced the valuer to change the valuation but it wasn't by a huge amount. Also you dont need to wait 6 months. E.g you do a massive reno on the property and it takes you 3 months then there is no reason why you cannot revalue it 3 months later. I have done this with 2 of my properties. One was a PPOR and the other was an IP.

    TheFinanceShop | Elite Property Finance
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    Profile photo of Scott No MatesScott No Mates
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    If a valuation has been done properly, the valuer can only use completed sales as evidence as those sales which haven’t settled still have a chance of failing. The valuer can consider recent transactions however cannot list these in their rationale

    Profile photo of Scott No MatesScott No Mates
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    If a valuation has been done properly, the valuer can only use completed sales as evidence as those sales which haven’t settled still have a chance of failing. The valuer can consider recent transactions however cannot list these in their rationale – being the devil’s advocate, if they used an incomplete sale and it failed to complete, the valuation was later challenged by the lender or insurers due to a default by the borrower the sales the valuer relied upon would not exist and the valuer may be liable for a faulty valuation.

    Profile photo of Richard TaylorRichard Taylor
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    @qlds007
    Join Date: 2003
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    Got a deal approved yesterday where the valuer came in $45K short on a $485K purchase in Brissie because the selling agent mentioned he thought it was the buyer intention to develop the site.

    We ordered a 2nd valuation which came in bang on purchase price.

    The Bank wouldnt accept this an ordered a 3rd valuation to make doublely sure. This again came in at purchase price and we got the loan approved.

    As SNM pointed out a valuer can only use evidence of completed sales of similar type property so don't be afraid to get your Broker to challenge the outcome. Sometimes the problem comes where the loan is mortgage insured and to switch lenders due to a better valuation can be an expensive.

    Cheers

    Yours in Finance

    Richard Taylor | Mortgage Broker helping investors build their wealth thru property
    http://www.mortgagecapitalaustralia.com.au
    Email Me | Phone Me

    0-40 Properties in a decade with a unencumbered portfolio value in excess of $40M. Ask me for a copy of my API Interview.

Viewing 11 posts - 1 through 11 (of 11 total)

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