Revaluations

[drelly]

The old PI secret to sucess: Buy 15% under market value and then revalue the property to realise equity which allows you to buy another property. But...

Do any banks actually accept this? I bank with Westpac and they will only accept a revaluation after 12 months or if there have been significant improvements to the property. I can understand this to some degree as valuations are only as accurate as the market decides they are. On the other hand, it is obviously possible to buy under market value.

What is your experience of this? I know this may be a newbie question but would be interested in what you have to say.

[cube]

Our Westpac Mobile Manager said 3 months, so I guess its down to local policy.

You can always threaten to re-finance elsewhere, because another bank would accept the new valuation.

Happy negotiating!

cube

[orion]

I bank with Westpac and they will only accept a revaluation after 12 months or if there have been significant improvements to the property.

Hi Drelly, Cube is right, it is down to the lender you deal with, although if you don't ask the right questions, it is usually 12-months before thet re-finance as standard policy.
The question I used to ask when organising finance through a new lender was "I only buy properties at well below market value - therefore, how long before you would recognise the true valuation, rather then what I am paying for it, and lend 80% on the valuation figure? Most of the time, you can get it down to 3 months, or 6 months at a maximum. You also need to see if you can use the valuation figure when you buy, and make sure the valuer does not know what you are paying. Otherwise, once the stats go through, the valuer is more likely to base the valuation on what you paid, so ask the bank if you can use the valuation you got when buying the property, and not have to get a new one when time comes to re-finance.
The other option of course, although far more expensive as Cube mentioned, is to change banks when you company/entity appears on the title which is usually 6 - 8 weeks after settlement.

Regards
Graeme Fowler

[teach]

My branch of Westpac are happy with a revaluation after 6-8 weeks if there has been some renovation done.

[orion]

My branch of Westpac are happy with a revaluation after 6-8 weeks if there has been some renovation done.

Yes, I think all banks will do this as soon as improvements have been done, provided you have a valuation. I think what Drelly was wanting to know is whether 12 months is normal to wait if there are no improvements to the property.

Regards
Graeme Fowler

[The_Dog]

I believe Graeme has hit the nail on the head when he says you need to use the original valuation, otherwise the (reduced) purchase price will be a self defeating prophecy and drag the next valuation down. I've experienced this, and think you really need about 2 years before the 'false' purchase price no longer taints the valuation. As mentioned, renovation is the other way to 'snap' the bond between purchase price and valuation.

TBD

[drelly]

Good point The_Dog. I hadn't thought of it that way. I have noticed that valuers can tend to be a bit anal retentive!

[The_Dog]

anally retentive?

So you can hear it as well? I thought it was a dog whistle.

Seriously though, valuers have a registration (and reputation) to protect. If the banks find them inflating figures then they are on the street. I have read one magazine that actually promotes 'influencing' valuers - dodgy ground.

One thing to note is that different valuers have different approaches. I have found that some go by surrounding house sales, and some simply take the land area, house area, and multiply them by standard figures of the day. If the latter method is used the impact of an under-market price will not factor in the valuation.

Another trap is in areas where the majority of sales are investment, 70% in Ranwick Park for example, and all the investors believe they are buying under the market. Problem is, there are not enough Ma and Pa buyers making emotional purchases (true market rate) to drag up the majority (IPers) that think they are getting a deal. This results in the area prices staying low for much longer than surrounding suburbs. L

Hmmmmm

TBD

[Rat]

I'm working on getting into the position where I can buy using revolving credit then go straight to my bank ( Westpac) after settlement and borrow based on the valuation.

I'm in private banking so they tend to let me do a lot that ordinary customers can't re refinancing early.

Interesting that so many of us bank with them. National bank wouldn't allow me to buy my last purchase and I threatened to leave. They did nothing.
Westpac gave us private banking and treated us like Kings. I still can't believe how the Nat bank treated us. I have banked with them since I was 15 and my partner used to work for them.

Rat

[drelly]

Can anyone tell me how long it is after purchase that figures are available to valuers... outside of asking the agent that is...?

[orion]

Can anyone tell me how long it is after purchase that figures are available to valuers... outside of asking the agent that is...?

Usually about 6 - 10 weeks.

Regards
Graeme Fowler

[donna]

Excuse my ignorance but what is private banking?? My limited understanding is that it is a service afforded to those that have a lot of $$ in the bank - say $50,000+ sitting in an account. Am i on the right track?

Does private banking cost more or less and does the extra attentiveness from them justify the investment over say putting that $50,000 in some other investment.

Thank you


Donna

[martinm]

Best check with the bank, but I think Westpac private banking depends on your total business (ie including mortgages) being greater than $250,000 or so.

[muppet]

Hi Martin

Welcome to the forum and looking forward to reading your future postings.

Regards

[donna]

Thanks Martinm....

.......and welcome to Propertytalk!


Regards,

Donna