September 10, 2014
The value of your house is important, but what is its true value? Unless it’s sold it is a bit of a guessing game. But even then, the value (or price paid) reflects that point in time.
If purchased during a buying frenzy, once the dust has settled, the property may be worth much less.
This can make life a bit tricky when you want to use your home’s equity for other property investments or as cash out for home renovations or other expenditure.
Aside from the buying and selling process, using a valuer to determine the market value is an accepted approach.
But bear in mind that all valuers are different and will have a different opinion of the value of your property.
More importantly the valuation they give will reflect who they are doing the valuation for - the owner or the bank. Things to bear in mind when a bank valuation is arranged:
o Banks pay a low fee so the valuer is not likely to spend a lot of time in the property
o The higher the loan to value ratio (LVR) the more conservative the value is likely to be
o If a mortgagee sale occurs and the bank cannot recover, at the very least, the valuation amount, the bank has legal recourse back to the valuer, no wonder at the high 95% lend they are so conservative.
If you are having your home valued to release equity or refinance, to overcome these challenges remember that the way your present the property does have an impact.
Try to be present at the valuation and ensure you demonstrate you are a person of good standing and that your home is pristine - psychologically this can have an impact.
Accompany the valuer around the property and point out the best features. Make sure your garden is tidy and the house looks and smells fresh.
If you have a rental property and it happens to be vacant, take the same care to present the property as you would for your own home.
If you want to achieve a high value for your investment property it may be worth spending a small amount on hiring some furniture and styling the property to maximise the overall presentation.
An extra $10,000 in valuation has the potential to increase your borrowing power and will outweigh the cost of presentation.
You know that how you dress in public does make an impact in how you are perceived and the same goes for your property.
Present your property well during a valuation and it will go a long way to mitigate the conservative nature of a valuer’s role in your financial goals and aspirations.
Call Julie Browne on 0421 206 643 for your home loan needs today