Hi everyone,
Long time reader, first time poster!
I am after some advice re: my current situation;
I have just sold an IP which is cross securitised with a property in QLD. The property in QLD had to be revalued in order to be at or below the 90% LVR threshold. Loan is $399k so value had to be around $445k ish in order to be 90% LVR. The valuation came in at $430k which means I have to put in $15k of my settlement monies into this loan – not happy Jan!
I really feel the valuation is quite low as I had an offer on the property for $455k only 5 months ago and have seen comparable properties sell for on or above the $450k mark.
My question is am I able to dispute the valuation and how would I go about doing so?
Any thoughts are appreciated!
You have 2 options:
Option 1: Yes you can challenge it but you need at least 3 comparable sales and they need to be no older than 6 months. You are also looking to increase the value of a further 3% and you should tell the valuer this. Have you done any renos to the property? This can occasionally get you over the line.
Option 2: Refinance and find another lender. If you do go with this option – most lenders offer free upfront valuations. So do the valuation and if the number is satisfactory then you can go from there.
Are there any restrictions from your side with option 2 incase option 1 fails?
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
That sounds good – only issue is I am currently on maternity leave so going with another lender would be out of the question unless I have a 20% deposit, from what I understand.
I will find those comparables and get them over to my broker. They didn't sound too keen on challenging the val but it is a lot of cash out of my pocket.
Just because you are on maternity leave doesn't mean you cannot refinance specifically.
On another note im going to correct myself. Option 1 isn't a good option as I thought you were trying to stay under 80% instead of 90% so LMI would be payable again if you move lenders. Not a good option.
Definitely get your broker to question and challenge the valuation. That's part of the job and its good fun!
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
As Shahin said, build a case. I got 3 properties similar, and 1 in worse condition and smaller that had sold for more than mine.
Ask for a different valuer as they sometimes send the same guy to audit his own valuation.
Last resort mention that you will take it to the Financial Ombudsmen – this magically got me a valuation that i wanted!
We've succesfully challenged quite a few valuations in the past – it's certainly not enjoyable but a bit of persistence can sometimes pay off.
As mentioned, you need to arm yourself with three direct comparable sales that aren't too old. If your banker/broker can provide you with a residex report or equivalent, that would be a good place to start.
Once you've found three comparable sales that compliment your property – provide it to your banker/broker.
The best results occur when the broker is able to contact the actual valuer and discuss the situation with them. It's not always easier to get direct contact – but like I said, a bit of persistence and thinking outside the square can often achieve results.
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]
Great advice! My broker said that he had only seen a valuation being challenged and won only once in 6-7 years so I was a bit disheartened but I requested that he continue with it anyway as it is so much out of pocket for me! If they decide not to play ball, I'll move banks as soon as I am able to.
Maybe that is worth mentioning to my bank at the same time…
I have not done any reno's to the property as it is only a few years old, however median house prices have gone up significantly in the suburb as well as the rent on the property too so that is also ammo.
Will build my case tomorrow!
Challenging valuations are not easy but can be done. You only get one shot so definitiely have a solid plan of attack before speaking to the valuer.
Good luck and let us know how you go.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Which bank is it with? Won't be easy, but worth a try.
If only you had structured your loans properly you woudn't be having this problem. Let this be a warning to others out there.
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
It's with Advantedge – the broker brand of NAB I think. I went through a broker for that very reason Terryw – I thought I was getting the correct structure for an investor. I am going to aggressively move forward once back at work from mat leave and will never cross securitise again. Lesson learnt
I have been in contact with Richard Taylor who knows his stuff so cant see any issues like this in the future.
Not many brokers know the dangers of cross collateralising and even less bankers do. Richard should keep you on track for future loans though.
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
I always found it hard to find great people with a decent knowledge of property investment, development etc, whether they be brokers or accountants or lawyers etc.
That is before I joined a property forum back in 2004, and just like this one, full of good sources.
Richard will sort you out, once he recovers from the icy blasts of the home country anyway.
Good luck
regards
Darryl
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
Email Me | Phone MeProperty Lawyer & Town Planner
Wow – when they say to have a good team of professionals when investing, they are not kidding!!
The whole thing has been horrendous – the broker has advised that they spoke with the valuer and would not change their valuation and settlement has been delayed by 3 days because the broker and the bank had a total lack of communication. They are putting the settlement monies into the redraw facility of the remaining property instead of my bank account because they were ''too late''.
Very, very cranky!
On the upside, I have learned so many lessons that I will not repeat in the future so I still feel the stress has been worth it.
Hiya
Did they take into consideration any comparable sales that were presented to them or did they just flat out refuse to review their decision?
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]
I left it to the broker to discuss as they said that they could do that for me. Really ran out of time as report was done on the Friday and the property was due to settle on the Tuesday. All just very frustrating!
Sorry to hear – hopefully it's smooth sailing going forward.
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]
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