valuation too low

Hey guys,

After months of wait and planning we finally signed the build contract. Our total price is 650k for house and land. We're giving a 20% deposit and also 5% on the build price to the builder so they can start work as soon as finance is approved. All that brings the loan amount to around 480k.

However, the valuation ordered by our broker came back at 550k. The area we're building hasn't had too many sales in the last months so I think they don't have a lot of data to compare too. Our broker has already requested another valuation from a different panel but I'm not very hopeful.

While I wait for all that to happen, has anyone been in a situation like this before? Is there anything we can do apart from reducing the build cost? We added a feel upgrades but most of them are structure related so it's not like we can just retrofit it later.

We have a quite solid application, even if one of us lost their job, we can still cover repayments easily. We're also putting in some strong cash so I wonder if the banks might take that into consideration or they won't even look at it since we're over 100k?

Have you already paid the deposit?

i've paid 2k for land and 2k for build.

I believe what would happen is that my total deposit instead of being 20%, would be lower due to the valuation, causing me to get LMI which is not ideal but it's not the end of the world I guess.

I was in same situation in July this year. Our valuation came back 100k less. We were with Bank Australia then. We contacted the Broker and they got the valuation from other firm/person and got it all sorted.

Saying that, market isn't great as well. Are you with broker? If yes then ask them try other firm/person for valuation and if possible try changing broker as well.

It is sad that you had already paid deposit. If yoi had not paid maybe you would had have better situation now