Mar 12, 2019 8:00 am
My broker ordered valuation for my construction of house in Caddens with EBH and valuation came back $120k short! A bit upsetting for us as we cannot cover the difference. Should we ask our broker to get another lender’s valuation? Should we approach another broker?
Re: Valuation shortfall Construction Loan2
Mar 12, 2019 12:15 pm
Hi Alissa, I can understand your disappointment and concern. Have you had a look at the valuation? Have you compared it to other sales of 'like' houses in the area? That is, houses with the same number of bedrooms / bathrooms and land size that have sold in the last 3 months?
Do you know if the build component or the land component came up short? Or both?
Your broker should be able to help you - no need to jump ship yet! Start with looking at these elements and you'll get an idea if the valuation is wrong or not.
Re: Valuation shortfall Construction Loan3
Mar 12, 2019 12:34 pm
Hi there. Thanks for your response. I’ve asked my broker if we can grab a copy of the report but he said he had already challenged the valuation but ANZ was firm with the valuation. Pretty challenging where I am building as it is a new estate and there is not much sales history. Plus, the surrounding suburbs are not comparable (Kingswood, St Marys, Orchard Hills) as they are old suburbs. Another thing is the upgrades which we spent around $70k on - ANZ is saying they are worthless and doesnt add to final selling value when built. I have a feeling their valuation is using the wrong variables.
Now our broker is going to another bank to get a different valuation hopefully it comes out fine.
Re: Valuation shortfall Construction Loan4
Mar 12, 2019 12:47 pm
Yep - wasn't thinking to challenge the valuation so much as to work out if you think it's accurate. I know the area, and I know what you mean but there are comparable to be found in new homes in Caddens and Claremont meadows that have been sold recently. Yes, some upgrades don't get full value attributed - you had a lovely kitchen, having an incredible kitchen doesn't make it that much more valuable in terms of a 30 day sale value from a lenders perspective. Good luck with the new valuation! I have just done one in Caddens stage 6 - but a fairly basic home - and it came in spot on so there is some comfort.
Re: Valuation shortfall Construction Loan5
Mar 12, 2019 12:52 pm
Thanks for that! Sigh, worst case we have to revisit the upgrades and remove some of them. Have to pay admin fee to change them but we really cant afford to pay them in cash. All the while our broker had given us a go ahead signal so this under valuation really came as a surprise.
Re: Valuation shortfall Construction Loan6
Mar 14, 2019 8:23 am
So we got the valuation report. Looks like they compared our 2 storey house to 5-6yrs old single storey houses. There is not much comparable house to us that was sold recently
Also structural changes that are definitely value adding are not considered in the valuation.
Our broker is going to another lender.
At the same time we approached another broker to see what he can do for us.
Re: Valuation shortfall Construction Loan7
Mar 14, 2019 10:39 am
Be careful of multiple applications at once, fingers crossed on new valuation.
Re: Valuation shortfall Construction Loan11
Apr 09, 2019 4:31 pm
I am going through a similar situation at the moment. My valuation came short by 70 thousand. Did getting valuation from another bank helped ? Or did other banks also came to a similar value for valuation?
Any update on this would be greatly appreciated.
Hope you could sort out your issue smoothly.
Re: Valuation shortfall Construction Loan12
Apr 09, 2019 4:45 pm
You may try to challenge but very unlikely to change. We went to 2 other lenders and they both got much higher valuation. Make sure you submit all docs, variations, upgrades, specs etc. and maybe highlight some facts that the first valuer may have missed.
Re: Valuation shortfall Construction Loan15
Apr 09, 2019 6:03 pm
Thanks for your reply alissa.
How much difference was there from the first valuation and the subsequent higher ones?
$70 and $80k higher!
Thats pretty good. Good luck with your build.
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