Browse Forums Building A New House 1 Aug 06, 2012 5:33 pm Hi, Just wondering if anyone has experienced low valuations recently. My understanding is that its happening across the board. After getting valuation on our land, a week and a half later it was revalued for the construction and valued $20k less. The house came in at $40k under value. When our broker argued that the land was only valued a week earlier for the higher figure they agreed to honour it but then devalued the house by a further $13k. After much back and forth we removed some extras to reduce the cost of the house and the valuer kept to the original value. We have now gone back to the lender with the valuation and funds to complete but they are now not happy with the cost of the house at all, still believing it to be too high even with their own valuation in hand! It is currently being escalated but wondering if anyone could share some tips on what we can do? Re: Banks and Valuations 2Aug 06, 2012 6:16 pm We just got word our valuation today has come in at $20k under cost price - the land valuation is what we paid for it but the construction is under. I don't think our build price is extravagant - $1650 per m2 all living area no garage etc. We are requesting a copy of the valuation to see if we might be able to challenge it, and considering paying for a second valuation from one of the valuers on the lender's panel. We have friends across the road whose land value (by valuation) is $70k less than ours, with a comparable house who have a valuation from January $30k higher than the one we got today. Fingers crossed we can both get our banks to see some sense! Tender /1/12 Contract 14/6/12 Planning 12/10/12 Site 23/10/12 Piers 27/11/12 Slab 12/12/12 Frame 15/12/12 Trusses 17/1/13 Roof 24/1/13 Bricks 13/2/13 Plaster 1/3/13 Re: Banks and Valuations 3Aug 06, 2012 9:24 pm I feel your pain. We were just about ready to proceed with our build, signed with the builder, paid the deposit & thought all would go well with the bank. As we are doing a knockdown rebuilt we have our existing home plus the other block with the house on it, both properties have dropped significantly in value since March. As a result we can't get the loan to build. Will have to sell our home first to fund the build, pushing our build into next year I imagine. Was meant to start next month! My Hamptons build (completed): viewtopic.php?f=31&t=63370 Moved in Wednesday 11th Dec 2013 Front landscaping completed June 2016 Re: Banks and Valuations 4Aug 06, 2012 9:42 pm Hi, Our land came in 3k under, and we are waiting for our construction valuation right now, hopefully tomorrow we will have an answer. I've checked our property data in the area we are building and the median price for a home of similar size is roughly the same as our build (land + total amount for construction). My bank guy says we'll be OK and I really hope he's right! He said generally - if you're upgrade/site costs are high and there is little property data to match against the valuations come in low. For example, your land is 200K, base house + upgades is 250K and site costs 10K total amount comes to 460K and a similar size home (in an adjoining estate that was built 10yrs ago) averages at 420K then you might have a problem. If you can, check with some local real estates in the area for some recent property data. In the end of the day, a bank wants you to pay hundreds of thousands of dollars in interest and will make this work for you .. It'll work out Re: Banks and Valuations 5Aug 06, 2012 9:42 pm Hi, Our land came in 3k under, and we are waiting for our construction valuation right now, hopefully tomorrow we will have an answer. I've checked our property data in the area we are building and the median price for a home of similar size is roughly the same as our build (land + total amount for construction). My bank guy says we'll be OK and I really hope he's right! He said generally - if you're upgrade/site costs are high and there is little property data to match against the valuations come in low. For example, your land is 200K, base house + upgades is 250K and site costs 10K total amount comes to 460K and a similar size home (in an adjoining estate that was built 10yrs ago) averages at 420K then you might have a problem. If you can, check with some local real estates in the area for some recent property data. In the end of the day, a bank wants you to pay hundreds of thousands of dollars in interest and will make this work for you .. It'll work out Re: Banks and Valuations 6Aug 07, 2012 7:31 am Bank's will always take a very conservitive approch to valuation. All up our land was valued at the price we paid but our house was $20,000 under. It's only going to get harder in the next year or so as the economy is unstable and in Victoria at least the market prices have been artificially bumped up by the FHBG. 29/05/12 - Contacts Signed 18/06/12 - Land Settlement 03/07/12 - Building Approval 20/07/12 - Slab Down Re: Banks and Valuations 7Aug 07, 2012 1:53 pm we are going to be going through the same thing shortly. In my experience banks usually only lend 80% of the value. ;0 Good luck with it all Re: Banks and Valuations 8Aug 07, 2012 2:07 pm We have been through this, our construction was 20k under. Unfortunately we stuck all our cash on the land loan so we didn't have to borrow much and now have no cash to complete driveway, paths, landscaping and furniture, sucks! But once the bank does the valuation after construction we are hoping that we will be able to borrow the additional funds to finish off. Goodluck! Re: Banks and Valuations 9Aug 07, 2012 2:23 pm Well we just got a look at the latest valuation (there have been four, all with mistakes ) and it looks like the valuer has been given our old house plans with a different builder from October 2011 (155m2 + 25m2 covered alfresco) to value against our new tender (which is for a 205m2 house + 5m2 porch no covered alfresco). We started going through the finance process for the old house plans last year before deciding to drop the builder because we had concerns about their general level of competence in putting the contracts together. The difference in the tender prices between the two houses was $45,000 so the valuer was probably being pretty generous only coming in at $20,000 under value. You would have thought someone would notice that the plans and tender have entirely different builders names on them, wouldn't you? Never mind the fact that the valuer supposedly inspected the block in July but the photograph included in the valuation is of an entirely different block and must be several years old as all it shows is a mini pillar with no fencing or houses nearby and there is no where in the estate like that now Oh and the valuer looked at the value of houses in a "comparable location" that is not comparable at all. It is another semi rural area but double the distance from the city that we are and with much much cheaper land Tender /1/12 Contract 14/6/12 Planning 12/10/12 Site 23/10/12 Piers 27/11/12 Slab 12/12/12 Frame 15/12/12 Trusses 17/1/13 Roof 24/1/13 Bricks 13/2/13 Plaster 1/3/13 Re: Banks and Valuations 10Aug 07, 2012 2:49 pm I found this to be an interesting situation. I had a fair buffer in the funds I had available - well below 80% LVR, yet when it came to valuations the valuation conveniently came back above 80%. Coincidence? Maybe. Convenient for them? Suspiciously. But what was most interesting is that they still valued the actual land at 185k. So in front of them they're openly saying "okay, land value is 185k". But with a building quote in front of them for 202,000, they put the CIV at 339k. The way I interpreted it was that they're basically running a ruse to force people to pay LMI. A better attorney than me would find a way to interpret that as "so you're claiming, in writing, that we're overcharging for our build by 30%?", and find a way to sue for damages. It really begs for someone to go to them and say "okay, so you're agreeing the land is worth this much - please go and find me an equivalent quote for these features and specifications in a home that can be purchased within the limit you've set down." Building a Delta 21 at Craigieburn - http://homeofzero.blogspot.com.au/ Deposit: 26/02. Contract: 22/05. Settlement: 29/05. Site start: 18/10. Re: Banks and Valuations 11Aug 07, 2012 7:52 pm If they can build the homes for the valuations they are coming back with then they should build houses as well as lend people cash i say! I must admit it has me a little freaked out though... Its been a year since we purchased land so to have an issue like this at this point will be a painful one to deal with! Will find whatever they want though, no way ill let it stop me from getting this done... Check out our blog below! We are using iDraft and Cozzcorp for our build http://ridgydidge1460.blogspot.com Plans: http://www.idraft.com.au Construction: http://www.cozzcorp.com.au I recently went through a similar renovation and move scenario when updating our family home. We also swapped some rooms around and tackled a major… 2 9755 OK it's been a little while! I've been busy getting time where I can to work on this. I started by grading a pad (borrowing a… 26 19952 Unless the room is for storage then it's non compliant BCA V2 2019 S3 P3.8 You have 2 options 1. The builder deconstructs the section and rebuilds as per plan /… 7 10657 |