Tuesday 14 October 2014

Bank valuation woes

Seems like I was right to be nervous. The bank valuation has come in MUCH lower than our contract price. This is really disappointing since it was the only major hurdle left to ensure we can go ahead with the build.

The bank will contact me tomorrow to discuss figures but I'm fairly sure I know the exact amount we need to make up the difference. Hopefully we have other options other than having to pay LMI.




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10 comments:

  1. DJ15 October 2014 at 14:21

    Very frustrating. This happened to us too. Hope you get the outcome you want soon.

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    1. Unknown15 October 2014 at 16:55

      Yea it seems like this 'Normal'. I think we're just going to have to tough it out and pay the LMI. Did you end up getting the full construction amount valued?

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  2. DJ16 October 2014 at 16:16

    No, unfortunately. We contributed extra to the build, figuring we'd be better off in the long run anyway. Seems people have better luck with the valuations when they choose a different builder, but we loved the PD home we chose and there was no way we could bear the thought of starting the whole process again with someone else. :-(

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    1. Unknown16 October 2014 at 16:19

      Yea we pretty much feel the same about this. The bank has offered to order another valuation for us so we are hoping it comes a little higher. Otherwise, we will also contribute more to the build.

      Cheers.

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  3. mattnotley200415 February 2015 at 18:57

    How did the second valuation turn out? We're about to finalise our contract with PD for our Dunedin 29 next week. Valuation for everything should come back in a couple of weeks, its a nervous time. Like you before valuation, we don't have to pay LMI, but im worried about it being significantly under. Out of interest, percentage wise, how much did they undervalue your build? Did you have many extras or add on promotions?

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    1. Unknown15 February 2015 at 19:16

      Better but still didn't come in at the total build cost. The main reason is that we are in a brand new estate.

      We got valued about 85% of the total build cost. We had a few upgrades and promotional packs added. We didn't go all out though and we could have easily spent another 20-30k.

      We also had 20% + costs but once we got the lower valuation we ended up with about 83-84% deposit so unfortunately paid some LMI.

      Good luck with it all! Hopefully the valuation comes in at what you want.

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  4. mattnotley200417 February 2015 at 19:00

    Thanks Joe. It's reassuring to know if I were to base our build valuation at 85% we're still clear. A bit of LMI doesn't bother of us too much.

    In total we have 20k of extras on top of the promotional packs, which our sales consultant said was to be expected. This includes everything from kitchen upgrades, extra laundry cabinetry, electrical, external eaves, bricks + roof tiles upgrades, sliding wardrobes, carpet upgrade, front door upgrade. and it worked out pretty much on par with the final figure from our original sales quote (there were a few deductions, such as bushfire levy).

    I don't feel we went overboard, as you said, 20-30k extra could have easily been possible. However, it does seem a fair bit at the end of it all (house + land) which is why we got a little scared when hearing about some pretty shocking valuations.

    We're building in Stonehill Estate, Bacchus Marsh.

    Will let you know how it goes, and I'll be following your progress :)
    All the best. Your up to one of the most exciting stages now!!

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    1. Unknown17 February 2015 at 19:12

      Thanks Matt. Yes we are very excited but stressed at the same time. So much can go wrong but I think we need to have a little bit of faith in the builder.

      Yes, please let me know how you go with the valuation.

      Cheers,
      Joe

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  5. mattnotley200416 March 2015 at 22:07

    Hi Joe,

    Our valuation came in at 89% of the total build + land cost, which works in our favour. Have to pay some LMI but we're fine with this (if the build doesn't start soon, we lose some promotions which will work out more costly anyway).

    Just waiting on a PCV to have our house placement moved, due to some issues regarding our retaining wall which was installed by the developer after our settlement and tender appointment. Land plans didn't reflect the inward measurements, so driveway would have been very sharp.

    Hopefully not too much longer.


    Cheers,
    Matt.

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    1. Unknown17 March 2015 at 07:47

      Hi Matt,

      That's great to hear regarding the valuation. A little higher than what we got which is always great. A little bit of LMI won't hurt. We actually decided to keep some of our savings and borrow a little more just to have some 'spare money' we can use for all the incidental costs of a new home.

      Hopefully you get your PCV and go to site very soon! It's very exciting watching it all come together.

      Cheers,
      Joe

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