land appraisal

spacey529 · Sep 11, 2013 6:36 pm

Hi,

Just wondering if anyone knows why the value of land appraisal might come lower than the buying price? We just received the loan approval from the bank but the value of the land is actually significantly lower than our buying price..we are definitely devastated

1sttimebuilding2012 · Sep 11, 2013 6:52 pm

That happened to us as well. The banks use an independent valuer so you can try asking for a different one. We didn't as we really liked the location, it did mean that we had a tighter budget for the build.

They base the prices on recent sales in the area... Do a bit of your own research, what has land based on your size sold for?

The other thing is to resubmit the loan with the house contract with it... Ours land was valued for less but when we submitted the building contract it came out as exact so it worked out for us in the end but I didn't splurge in some areas I would have otherwise so kinda a blessing... We may have been over capitalising if we didn't need to stick with our budget.

robbie55 · Sep 11, 2013 6:59 pm

Disregard. I was on the wrong track.

Rachi · Sep 11, 2013 9:37 pm

We originally agreed to purchase the land for $125,000 however the bank only valued it at $115 we managed to re negotiate the price down to $122, for us it basically meant a frantic phone call to our parents to come up with the $7000 difference as we were borrowing 95%. We are hoping that the bank valuation is a little better when we go to build as we were one of the first to buy in our subdivision so the bank didn't have a lot to compare to.

spacey529 · Sep 12, 2013 9:38 am

1sttimebuilding2012 we bought the land and the bank has approved the loan.is it gona make a difference if we get the 2nd appraiser?. Its prob our mistake too that we made a rush decision

spacey529 · Sep 12, 2013 9:42 am

Hi rachi, so did u negotiat3 with the real estate agent? I didnt know we could do that. We signed the contract to the agreed price tag, i dont know if we can negotiate that..but my partner will contact our solicitor today to look at options..i suppose..

qebtel · Sep 12, 2013 12:17 pm

Land valuation is not an exact science. Get 5 valuations and they will likely all be different, and possibly even to a large degree.

Valuations is just someones opinion. Form your own well researched opinion. You have the time to see all sorts of things that a valuer who pops around for 2 mins (if he even does visit) will never be privy to.

spacey529 · Sep 12, 2013 7:09 pm

Thanx qebtel

Rachi · Sep 13, 2013 7:01 pm

spacey529

Hi rachi, so did u negotiat3 with the real estate agent? I didnt know we could do that. We signed the contract to the agreed price tag, i dont know if we can negotiate that..but my partner will contact our solicitor today to look at options..i suppose..

Our conveyancer dealt with the agent, as our contract was subject to finance and with out finding additional funds or them lowering the price the sale would not have gone thought. The block had been on the market for a while tho and there is a lot of new subdivisions in my area so the seller was keen to get rid of it.

spacey529 · Sep 14, 2013 5:56 pm

We went for a 2nd opinion today. The guy said that the bank should have let us know that the land value is lower than the buying price before the cooling off period of the contract. She should have liaised with us with all these. When we asked her opinion about the land evaluation she made us feel like a couple of idiots who should have done their homework before buying the land. As a matter of fact, in the beginning she was the one who encouraged us to go ahead with buying the land!! She even been giving us conflicting information throughout this process!! So now we are thinking to change the financial institution..never again dealing with this particular bank. Im certainly disgusted!!