Browse Forums Home Finance 1 Oct 20, 2009 5:01 pm I am extremly perplexed at my situation. I have my home ready to start the build and CBA came back with "approved" pending valuation. My partner and I currently have approx 25% deposit and everything seemingly was ready. Introduce the Evaluator. wham valued the property at 65K below the build price We are at a loss as to what to do? We have negotiated 9k off so now its at 56k difference. We just applied for a 50k personal loan to try to make the shortfall until the property is constructed then wait for homes in the area to start selling but alas it is getting very hard to deal with. I am thinking what does a person have to do, have 40% deposit to be sure of everything going smoothly I am at a loss as to what we can do now. its not hard to see that the prices will go up in the area hundreds of new homes but non on the market as its a new area. The rules to how they do things kinda suck big ones. this will be and expensive lesson to learn. we have 40k in deposits on things for the property for after the build but alas if it does not go ahead we stand to loose some if not most of these depsots This has been a real eye opener for a building noob Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 2Oct 20, 2009 5:21 pm Several options 1) Change lender through a broker 2) Look through your contract and remove non-value add items (eg. timber frames, expensive tiles or floorboards, upgrades, and excessive colour appointment items) 3) Change building 4) wait 12 months before building so values rise slightly Re: CBA Valuation 65k below the house price in new suburb 3Oct 20, 2009 7:41 pm Ask your bank for their list of valuers. You should get at least 3. The bank should honour their valuation and in most cases the valuer that you get will rise the valuation. We did this with our land and got it valued to what we had paid for it (25k about the bank valuation). Even though it will cost you (I think ours was $330), I'd try and do this before cutting away your selections etc... Hope this helps. K Re: CBA Valuation 65k below the house price in new suburb 4Oct 20, 2009 8:32 pm OMG This brings back awful memories, I feel for the situation your in, all I can say is fight hard to get what you want and don't give up...no matter what! It will all pan out in the end if you play your cards properly, hopefully! Best of luck. Building Thread viewtopic.php?f=31&t=13002 Site start: 8th July 2009 Handover: 11/12/2009! 5 months total build time. 40 sqs of luxuary...Bliss! Re: CBA Valuation 65k below the house price in new suburb 5Oct 22, 2009 3:05 pm Hey Everyone, Be careful with getting the banks panel valuers listing and ordering it yourself. With some lenders they will still order their own valuation through their panel. And heres the stupidity of it.. if on the rotational valuer roster they have it goes to the same panel valuer you used a few of them will still commision and pay them to redo it. When in actual fact all the valuer does is reassign the existing valuation. Regarding this situation a valuation can always be contested and this is the first best place to start. With CBA the lender will have a copy of the valuation and a broker can request a copy of the valuation. To see if EVERYTHING has been looked at in putting the value together. This is the first point of contact. Get your broker to obtain a copy of it. Have them look over it and confirm that it is correct (as mistakes happen we are all human) if it does look complete. Check the valuation for whether it is the Land or the construction that has been undervalued (as the valuation will have a breakdown). If it is the land that is under. Find out why? Some research will go a long way. Some areas land is depreciating therefore not worth what it was bought for 3 months ago. Some areas the building contract you have in place may have fixtures and fittings that are well above the standard building in the area. Thus the property is overcapitalized and if going to market would not reach the higher amount. More information has to be obtained as to WHY the valuation came in lower, once this is done your broker/lending manager can contest the valuation. I myself worked in real estate before moving to mortgage lending. And as long as you can build a relevant and specific enough argument with supporting sales evidence a valuer will relook at the figure for you. If you are a savvy negotiator you may wish to speak to the valuer directly or have your lender/broker do this on your behalf. In some extreme circumstances if you believe there is a gross injustice in the valuation your broker/lender could push to have it revalued through an alternate valuer. Provided you have enough supporting evidence that it seems reasonable that it should be relooked at. Hope this helps Regards, Re: CBA Valuation 65k below the house price in new suburb 6Oct 23, 2009 5:03 pm Thank you for your replies, they are appreciated. We are almost at the stage of giving up. We found out today that the valuation was taken from data almost 12 months old and this has really dropped my trust in this bank. It annoys me to no end that we are being treated (in my opinion) so unfairly. We are unable to get a copy of the valuation the bank declined so our ship is almost sunk. We are currently looking at an independant valuation but as i have learnt this wont help much as banks wont recognise it. Situation fix: I am edging to the position that we will just drop all actions with trying to build. we will have our land paid off in 2 years or just under and we can then tell the bank to blow it up their coconut It just goes to show that even if you do the right thing the bank still tries to get as much out of you as it can /cry Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 7Oct 23, 2009 6:31 pm I said fight hard and DONT give up!!! LOL Ask for another valuation to be done, you have options, I am proof of this type of situation being able to be pulled off, we are about 5 weeks away from finishing. If your interested have a read of my thread to see what we had to go through, we fought hard and NEVER EVER gave up! Building Thread viewtopic.php?f=31&t=13002 Site start: 8th July 2009 Handover: 11/12/2009! 5 months total build time. 40 sqs of luxuary...Bliss! Re: CBA Valuation 65k below the house price in new suburb 8Oct 23, 2009 7:52 pm Hi tpin, The CBA has just announced that is changing its dispute process for valuations. It starts on the 2nd November so unsure if that is too far away. Basically they are taking it to independant valuers. Maybe talk to your broker as he should have the new information. Good luck Re: CBA Valuation 65k below the house price in new suburb 9Oct 23, 2009 9:21 pm pinkfairymagic OMG This brings back awful memories, I feel for the situation your in, all I can say is fight hard to get what you want and don't give up...no matter what! It will all pan out in the end if you play your cards properly, hopefully! Best of luck. thanks for your words of wizdom PFM ive had a good read through your building thread and wow .. i am so jellous one day I will have my very own building thread My pure frustration dictates that i will vent but i will keep banging my head on the wall until it either falls off or the wall falls over and we find an extra 50k from somewhere either in the way of a PL or the new valuation comes in higher. glenglen Hi tpin, The CBA has just announced that is changing its dispute process for valuations. It starts on the 2nd November so unsure if that is too far away. Basically they are taking it to independant valuers. Maybe talk to your broker as he should have the new information. Good luck Thanks for the info GG we were not aware about that. it could be a nice opening for us especially if our new valuation comes up trumps for us (new val is from a different lending institution) Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 10Oct 25, 2009 3:19 pm Valuers are all over the place at the moment! CBA uses Valex which is mostly done through the valuers Megaw and Hogg who I have not had many good experiences with. Definately use a different lender. Challenging a valuation with CBA has a 3% success rate, why bother? Re: CBA Valuation 65k below the house price in new suburb 11Nov 03, 2009 9:47 pm jb_money Valuers are all over the place at the moment! CBA uses Valex which is mostly done through the valuers Megaw and Hogg who I have not had many good experiences with. Definately use a different lender. Challenging a valuation with CBA has a 3% success rate, why bother? yay .. Megaw and Hogg that is the company .. We are still waiting on our new val (with another lender) it has been 8 days thus far and one can only hope that its taking this long because they are researching and going to deliver a true reflection of the value rather than a 24 hour turn around Guess using data from 12 months ago as we were told by a staff member at the bank ... its all hearsay but it just adds to the frustration and sadness Until it is all over we will keep banging our head on the wall even though its now starting to hurt a tad. We are lucky thus far the building company understands and I guess at this stage they still want a sale so they are not going to rock the boat a great deal Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 12Nov 04, 2009 8:49 am Brings back painful memories for us too. Ours came back around 70k under valuation from the CBA... they took valuations from surrounding suburbs as ours is a new development which were selling around 50 grand less. We had to either come up with 30 grand cash fast or pay the LMI. After a long and ardous process and the time ticking we ended up paying the 11grand in LMI.... and i'm still very disappointed with the result, but at least it allowed us to progress. Wish I had the time and persistence to argue over the valuation though Blog : http://ournewhaven.blogspot.com/ (Modified Newhaven - Homestead Homes) Status : DA - Dec 09. Slabbed - Jan 10. Handover - Aug 10 Re: CBA Valuation 65k below the house price in new suburb 14Nov 04, 2009 2:28 pm When you got the new valuers in did you specify that you wanted a valuation from a Bank / Financial institution's perspective? That is where a lot of times the difference can be. A valuer can value a number of different ways but at the end of the day the Bank will normally only take into account a valuation that is done on a firesale basis - ie if they have to dump the property at auction what will it make. Not if it sits on the market for an unspecified time. Some things are worth waiting for. Re: CBA Valuation 65k below the house price in new suburb 15Nov 04, 2009 2:40 pm Good luck tpin!
To give you some hope, we were in a similar situation with a valuation over $25k short at construction approval stage. We managed to have it increased to a few $k off actual house/land cost with minimal fuss (broker took care of it, not sure how). So it does happen! Re: CBA Valuation 65k below the house price in new suburb 16Nov 04, 2009 3:23 pm kyton When you got the new valuers in did you specify that you wanted a valuation from a Bank / Financial institution's perspective? That is where a lot of times the difference can be. A valuer can value a number of different ways but at the end of the day the Bank will normally only take into account a valuation that is done on a firesale basis - ie if they have to dump the property at auction what will it make. Not if it sits on the market for an unspecified time. The new val was from another banks pannel of lenders and was with a view to looking at that bank. Our broker spoke with that banks state loans manager and we now run into the issue where the number of veda credit checks can be a problem due to trying all avenues to cover the original short fall of funds from the original valuation. Thus we are currently looking at trying to get CBA valuers to increase the value with the data received from the other banks valuer and then look at any short fall. We need to get the value to within 25-30k and we will be in a position to cover it using our new car as security for a PL to cover it. It sucks big ones but that is the market at the moment if this falls through we will possibly walk away, try to recover some of our deposits we have paid, 40k all up (for driveways a/c tiles etc) and smash our land loan over the next 2 years (which will nearly pay it off) then try again. Someone said remove things from your house to drop the shortfall but you run into other issues doing that .. it drops the value of the house so its very tricky to remove things from the house whilst keeping its value. The thing we have learnt is that it does not matter what size house or really what fixtures you put into it. it will still come back with a lower valuation in the current financial climate and you will start off behind the 8 ball from the start. In my opinion to purchase a house these days I would say to have minimal fuss you would just about need 30 percent deposit sucks to be us at the moment Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 17Nov 04, 2009 10:53 pm What suburb if you don't mind? We previously had valuation problems in Tarneit in Melbournes west. Re: CBA Valuation 65k below the house price in new suburb 18Nov 05, 2009 8:17 am [quote="tpin70 Our broker spoke with that banks state loans manager and we now run into the issue where the number of veda credit checks can be a problem due to trying all avenues to cover the original short fall of funds from the original valuation. [quote] TPin70 - that is terrible news but your Broker should have been aware of this happening with your Veda credit checks. Every time you apply somewhere it will add another crosscheck against your name which as your Bank has pointed out also has a detrimental effect to your loan approval process. Brokers really should advise their customers of this before applying too many times. Again so sorry that you find yourselves in this saga. Fingers crossed something comes through for you soon. Some things are worth waiting for. Re: CBA Valuation 65k below the house price in new suburb 19Nov 05, 2009 6:24 pm Kyton TPin70 - that is terrible news but your Broker should have been aware of this happening with your Veda credit checks. yeah not our brokers fault really .. CBA pushed our PL through 3 times and each time it came up on our VEDA. plus I had a couple of listings for a CC and car loan from 12-18 months ago. When you add them and things like power, telephones etc .. they all add up and in todays economic climate its all fodder for the banks. it is starting to get very overwhelming now .. for some thing that one would think should be relativly easy its certainly destructive Zerosignal What suburb if you don't mind? We previously had valuation problems in Tarneit in Melbournes west. in Adelaide Munno Para West where the city is catching up with the country Rossdale Homes "Houghton" Sovereign specification Re: CBA Valuation 65k below the house price in new suburb 20Nov 06, 2009 4:00 pm Update****** some good news finally. they say luck comes in 3's 1. My partner and I won a trip to the gold coast last night 2. After going back to the bank with more data the valuation was looked at and upped by 20k we now only have a shortfall of 30k which fingers crossed will be gainable with a PL secured on our new car which has a redbook value of 35k 3. hopefully the third lucky thing will be the secured PL coming back approved and we can then start a building thread watch this space Rossdale Homes "Houghton" Sovereign specification Hi Kristy Around $1.7-1.8m or around $4,600/sqm. if you PM me your email I will send you a break up in a spreadsheet so you can get an understanding of the costs for… 1 9956 Wow I hadn't realised things had gotten that pricey in just a couple of years since I built, that is crazy with how much land is now costing if you aren't lucky enough to… 3 7125 Hi, you've probably already resolved this, however, Commbank will probably pay the funds to you after you send evidence the work is done regardless the change in the quotes. 1 35326 |