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10 valuation myths you probably think are true

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Your Investment Property | 11 Sep 2012, 12:00 AM Agree 0
If you think more rooms equals higher value or that a pool holds no value, read on as a leading national valuer debunks the most common valuation misconceptions
  • Chris Hamilton | 22 May 2014, 05:46 PM Agree 0
    Oh dear, more inaccurate dribble, we have been commercial developers for over 30 years, we have had to deal with these so called I dependant values time and time again, if a valuer wishes to retain a fat income at the sole expense of the party requiring the valuation required by a Bank then they will always given a valuation fitting squarely infra our of the Bank, if they fail to do this on several occasions they simply do not stay on the Banks panel of values are are only permitted or licensed to carry these valuations out.
    The other shabby part of this arrangement is the valuer demands and must be given a copy of the purchase contract, we have yet to se a situation where the bank valuer comes up with a price greater than the contract, in nearly all cases it falls short of this amount.
    The other disgraceful activity that takes place is that Stamp Duty to be paid on the property and GST if applicable is not included, never has been never is, this is carried solely by the applicant separate from what the lender is looking to loan.
    We buy properties say around 4 million, vacant land, we pay around 600,000 dollars in taxes that are never included in the loan valuation, they just conveniently disappear, so please don't suggest valuars are independent, never have been and never will.
  • Chris Hamilton | 22 May 2014, 05:55 PM Agree 0
    Oh dear, more inaccurate dribble, we have been commercial developers for over 30 years, we have had to deal with these so called independent valuers time and time again, if a valuer wishes to retain a fat income at the sole expense of the party requiring the valuation required by a Bank then they will always give a valuation fitting squarely into the requirements of the Bank, if they fail to do this on several occasions they simply do not stay on the Banks panel of valuers.
    The other shabby part of this arrangement is the valuer demands and must be given a copy of the purchase contract, we have yet to see a situation where the bank valuer comes up with a price greater than the contract, in nearly all cases it falls short of this amount.
    The other disgraceful activity that takes place is that Stamp Duty to be paid on the property and GST if applicable is not included, never has been never is, this is carried solely by the applicant separate from what the lender is looking to loan.
    We buy properties say around 4 million, vacant land, we pay around 600,000 dollars in taxes that are never included in the loan valuation, they just conveniently disappear, so please don't suggest valuars are independent, never have been and never will.
  • Sandy Hanson | 22 May 2014, 07:58 PM Agree 0
    and valuers often dont keep up to date eg real positive value of green energy
  • Me | 22 May 2014, 09:39 PM Agree 0
    Valuers are not independent to the financial institution they are doing the valuation for in the sense that they will never go beyond the scope of the purchase price or the value of the loan you are asking for. I have had multiple times where I have purchased a property with a sale price valuation come back in the report only to be told late on by the financial institution that I should insure the property for beyond what I paid for it. Lenders no longer want to be placed in the position where an investor can borrow 110% or more of the purchase price in order for the investor to get more money than the sale price so that they can borrow extra. I have also found that valuers have somehow "missed" an important comparable sale in order to assess properties against each other.

    The way I look at it is that I am paying the fees for the valuer so why doesn't he work for me and not the financial institution? I do all in my power to get a good valuation, but the last one saw me lose $40,000 in valuation or $32,000 which I could use to invest. Crappy deal really when I am paying for the service.
  • Chris | 22 May 2014, 11:00 PM Agree 0
    Correct, the system is corrupt, in our case we are dealing on properties worth millions each time, it is our stock in trade, the banking system is allowed to get away with this year after year, there should be an enquiry into it, we and every other developer are forced to deal with only those valuars on the banks panel, we know plenty of excellent firms that can give honest and appropriate valuations but are not recognised by the lenders, it is a total farce, the lower the valuation the more equity the borrower has to put in, so reducing the banks exposure, it is wrong and corrupt.
  • Brent | 23 Jul 2014, 03:20 PM Agree 0
    I have had two valuations done the fisrt one came bank ok but just a bite lower than we need.
    The lender wanted a valuation done by one of there proferred valuers it came back 100.000 less.
    they both were done two weeks apart and in that two week I had a 60sqm deck put on.
    the lender will not let me see the valuation so this is open and trasparent I dont think so
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