Browse Forums Home Finance 1 May 31, 2009 5:47 pm Hello, We are borrowing 95% for our construction , pre approved no worries, but as there is a trend in valuations coming back short we are wondering what our options are. We will have not a single cent to make up the shortfall and will not touch another line of credit - inlcuding family!!! to make it happen. Also, we only have with only 5% equity in our land. Once the bank rejects the amount on your contract - is it just a matter of taking the short fall from the house by picking and choosing your least wanted items or do the bank specify which items they are not covering? This information is really important as I do not want to risk several thousands of dollars on a house deposit because the valuation comes back short and they take out the things the makes my house different from a rental and I have to pull out. As another option, can I get a quote for a concrete driveway and then the val comes back short, simply change the driveway to gravel and add in something I really wanted in the house like pot drawers in lieu or does the bank expect you to re-submit a contract? Any advice would be appreciated as I am pretty stressed about this... Thanks! Liz Re: Advice re valuations please!!! 3May 31, 2009 6:24 pm lwbjl why do you think the valuations will come back short? Liz is building on the same street as me and mine was short. I think she's panicked now. Our estate/area is strange because there is no standard size block/house.... hard to compare I guess. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: Advice re valuations please!!! 4May 31, 2009 6:37 pm so it was the valuation in full not just a progress valuation that came up short? is your house going to be worth, what your paying to build it? i reckon get the valuatation..hopefully wont come up short... worry about when and if it comes up short... Re: Advice re valuations please!!! 5May 31, 2009 6:46 pm I was lucky enough to speak with a valuer from the CBA panel - he confirmed that fringe areas are on average coming in short up to 20%!!! I will be looking at spending 50-60k above the base price (that even includes 15k site costs), so my concern is that I will not get a single upgrade/option into my home. My other concern is that the builder will charge me several thousands in 'costs' before I can even get to the point of finding out the results of the val, as I can only get full approval from the bank with a contract. To recoup these costs would take us 12 months of saving. This is why I want to know if you can juggle items around in the instance of an under valuation. I appreciate your help... P.S. Hi Joles - thanks for the back up - I had spoken to the valuer before hearing your plight - you simply confirmed if for me - so don't feel bad! Re: Advice re valuations please!!! 6May 31, 2009 6:51 pm Liz, the valuation doesn't actually affect us so it wasn't a problem for us luckily. We're nowhere near that type of percentage short but I'm not much help in answering your question about rejigging things. I leave you to fend for yourself, figure things out yourself. Terrence Malick Re: Advice re valuations please!!! 7Jun 01, 2009 10:04 am You need to be carefull in making changes after(or if) your valuation comes in short. Our valuation came in $20k lower for our h&l package so we made a few variations to borrow max of 90%. This brought purchase price down by $10k but meant that the banks mortgage insurer wanted to re-value to see if the variations affected their original value. Luckily they didn't change it! But be aware that major changes like driveways may affect their value, especially with current situation. Re: Advice re valuations please!!! 8Jun 01, 2009 10:43 am Hi Arabella! This is exactly the feedback I'm looking for. I appreciate you taking the time. Warm Regards, Elizabeth Re: Advice re valuations please!!! 9Aug 21, 2009 1:57 pm Arabella, that is good of you to tell. I once experienced a similar request by a lender because my customer successfully re-negotiated to secure a discount in the price and the bank wanted to revalue to see if anything had changed. Once they saw it was a genuine discount, there was no reason for concern. Re: Advice re valuations please!!! 10Aug 21, 2009 3:20 pm Hi, I have full approval with the CBA before my contract is thru, it was at Prelim Stage. PM me and i will give you details on my lender will tell you def in 3 days, with CBA. I also worked for them for 10 years and give everyone my lenders details, he always gives me the best and lowet rate possibl, i never seem to get it better with any other bank so i know he is looking after me! Re: Advice re valuations please!!! 11Aug 21, 2009 4:08 pm that sounds too much like a free plug sparkycarla. Re: Advice re valuations please!!! 12Aug 25, 2009 2:52 pm Im having the exact worry as Elzbeth, as in we'll be looking to borrow 95% for land and construction, and just really really worried about valuations coming in short since we wont be able to pump in any more cash to cover the shortfall. I plan to purchase the block first whilst staying at my current house. Once land is tiled i'll get the contract for house processed. In the unfortunate event that valuation comes up short for building etc etc...at least I have the option of selling off the land and keep staying in my current place. My question is....can I exit from the building contract IF the valuation comes short or if there's unexpected cost blowout in the finalised contract? What sort of payment or penalty will I be liable for in such scenarios? Do I loose my deposit too? 12 March 2010 - Land titles received 3 April 2010 - Signed building contract 14 April 2010 - Prestart 28 April 2010 - Loan approved 30 June 2010 - Slab completed 27 August 2010 - Brickwork completed 22 September 2010 - Roofing completed 30 September 2010 - Internal walls plastered 12 October 2010 - Lock Up 19 November 2010 - PCI 26 November 2010 - Handover 29 December 2010 - Moved In https://forum.homeone.com.au/viewtopic.php?f=31&t=32584 Re: Advice re valuations please!!! 13Aug 25, 2009 6:47 pm I am not an expert on valuations but if you sign a standard 'subject to finance' contract with the builder, then you should not have any penalty if you do not proceed if you cannot get finance because the valuation comes up short. I know with ours, we paid a $2000 deposit which was refundable if we did not proceed (thru choice or finance refusal) after being offerrred final contract. Re the option of selling the land if you cannot get finance to build - you would also have the other option of hanging onto the land, building up your equity in it and then re-applying for a construction loan at a later date. Hope this helps.. Helen. Re: Advice re valuations please!!! 14Aug 27, 2009 12:34 pm Thanks Helyn, and yeah good point about hanging on to the block for awhile if we can manage the finances. 12 March 2010 - Land titles received 3 April 2010 - Signed building contract 14 April 2010 - Prestart 28 April 2010 - Loan approved 30 June 2010 - Slab completed 27 August 2010 - Brickwork completed 22 September 2010 - Roofing completed 30 September 2010 - Internal walls plastered 12 October 2010 - Lock Up 19 November 2010 - PCI 26 November 2010 - Handover 29 December 2010 - Moved In https://forum.homeone.com.au/viewtopic.php?f=31&t=32584 Re: Advice re valuations please!!! 15Sep 15, 2009 10:10 pm Just an update - the valuation came in 7.5k short - we have disputed this and are hoping the banks will see sense and loan us the full amount. 7.5k breaks us - but is pennies to the bank in terms of the full amount of the loan. Fingers crossed... Re: Advice re valuations please!!! 16Sep 16, 2009 8:08 am or can you reduce the house cost by 7.5k somehow without affecting the valuation? Re: Advice re valuations please!!! 17Sep 16, 2009 2:22 pm Certainly a possibility - I'm sure there will be penalties from the builder - so we are hoping the bank will come through. Re: Advice re valuations please!!! 18Sep 16, 2009 6:02 pm We had a similar issue, the bank undervalued our place, but luckily we had the extra cash to put in (as a progress payment of the shortfall right at the end). We're looking around at refinancing now (finished building) and the banks seem to be confidend in the price we would have hoped to sell the place for ( well we are selling due to financial situation at the moment). Anyway I'm probably not much help to you, I think they basically say land value plust building cost is equal to the value of the home, but at the same time they don't really consider the cost of the extras like earthworks, rainwater tanks etc. The only other thing I thought of at the time was to get an independent valuer or get the bank to get another valuation with a different valuer if you don't agree with the first one. It will hold up finances and building though which is why we didn't go with that, but we knew that our valuer (from Margaret River) was a bit snobbish of our town I guess you could say so didn't hold values here as highly. In the end it worked out ok for us though. Re: Advice re valuations please!!! 19Oct 30, 2009 9:36 pm Pebble or get the bank to get another valuation with a different valuer if you don't agree with the first one. Hi Pebble, lenders will usually say no to such a request and many have outsourced their valuer coordination function to third parties. Re: Advice re valuations please!!! 20Dec 03, 2009 9:17 am thlo Pebble or get the bank to get another valuation with a different valuer if you don't agree with the first one. Hi Pebble, lenders will usually say no to such a request and many have outsourced their valuer coordination function to third parties. Just an update; A Valuation Management System company recently advised in writing that if a second or further valuation is ordered by a customer for the same property they WILL reject the order and report it to the lender in question for an investigation. I hope that answers your question a little better. Versaloc is a mortarless besser block system that still needs a properly engineered footing. If you just do a 400x200 footing it will fail in time. At 17m long you need it… 1 18089 A question. Im in Queensland and building a new home. We managed to reach practical completion 6 weeks ago but we haven't heard any date for handover yet. 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