The question is often asked to me, ‘Is there a difference between a bank valuation and a normal valuation?’ The most probable answer is no, there shouldn’t be, but the right answer is, but there could be.
Why would there be a variance and what is the effect on the decision making process of real estate?
- The valuer chosen for residential mortgage work is now generated by a third party management organisation that allows valuations in the main to National entities.
- Most residential valuations undertaken for banks are undertaken by newly qualified or experienced RPV (Residential Property Valuer).
- The basis of valuation for banks is for ‘mortgage purposes’.
- The lower the valuer the better the financier is, the better off the valuer is…why? The valuer is usually the party that may get sued if the valuation is incorrect and the applicant defaults on the loan.
- Simply, you pay for what you get. The usual fee for bank valuation / residential is $200. If you really want a valuation that assists in, the decision making process, pay. Why? It will save and guarantee that you will make money.
- The turnaround time for a bank valuation (residential) is usually 48 hours. The result is that the process lacks professionalism and is really just a guarantee for the bank via a legal party that may get sued at a later stage.
- Less risk, so value low – self-explanatory.
- The Residential Estate Valuer: has he or she had enough experience? Are they really cognisant with the market, type of property and process?
- Mortgage valuations are only as good as the specific valuer.
- If you want to make sure, obtain an independent Real Estate Valuers to check a valuation supplied by the bank… a large percentage may differ, and not just based on personal opinion.
To know more please contact us