Forums / Getting Technical / Finance / Bank valuation when land title is not registered

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  • Profile photo of TerenceTerence
    Participant
    @tongthf
    Join Date: 2017
    Post Count: 2

    Hi all,

    I am in the process of obtaining finance for a house and land package and my broker has advised that the lender cannot provide formal approval because the land has not been titled and therefore a bank valuation cannot be performed. On the other hand the agent who facilitated this house and land purchase is saying that the valuer can value the land even if the title has not been registered. The land has been pegged and allocated a lot number. The others who have purchased in the same estate were able to obtain a valuation without any problem and the developer can provide access to the site.

    Could anyone share some insights as to whether a land without title can or cannot be valued for the purpose of obtaining formal approval for finance?

    Thanks!

    Profile photo of TerrywTerryw
    Participant
    @terryw
    Join Date: 2001
    Post Count: 16,173

    Yes the valuer can access and do the valuation. But to get formal approval the titles really need to registered as otherwise what do they put on the mortgage documents.

    I got a valuation for a client the other day for a subdivision that hasn’t been registered yet.

    Terryw | Structuring Lawyers / Loan Structuring Pty Ltd
    http://propertytaxbook.com.au/
    Email Me

    Lawyer, Mortgage Broker and Tax Advisor (Aust wide) http://propertytaxbook.com.au/

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    As Terry noted – it’s possible to get a val done before registration – to make sure finance is all lined up so formal can be issued once registered – but you’re not going to get to formal approval and docs issued until it’s completed.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of TerenceTerence
    Participant
    @tongthf
    Join Date: 2017
    Post Count: 2

    Thanks Terry and Corey! I asked another mortgage broker and she said the same thing. It’s good to have experts around.

    Profile photo of Ethan TimorEthan Timor
    Participant
    @ethantimor
    Join Date: 2016
    Post Count: 282

    Agree with the above.

    If I were you, I would aim at getting ‘conditional approval’ where the only condition is the title being registered. Such an approval is usually good for 3 months and can be extended as needed.

    This should provide you with sufficient peace of mind I hope? 👍😎

    Ethan Timor | Aligned Finance Pty Ltd
    http://www.alignedfinance.com.au/
    Email Me | Phone Me

    Active Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)

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