When you are applying for a home loan in our Rockingham office, you will eventually have to get the property valued. The lender will then determine how much they can safely loan you on the property. It works the same way if you are refinancing or if you are selling. The banks depend on accurate valuation of homes to accurately assess risk.
The Lender Chooses the Valuer
The lender will usually choose the valuer because they believe that valuers can subconsciously value the property in favour of whoever is paying the valuer. They don’t want you to hire a valuer and have that valuer say the home is worth more than it really is. Whether that theory is true or not, it will be the lender who chooses.
Three Types of Valuations
There are three types of valuations: desktop, kerbside and full. If a property is new, recently renovated or has a breathtaking view, a full valuation is better for you because the valuer actually visits the property and inspects it. If a property is older or not in great shape, a kerbside valuation, where the valuer drives by, may be to your benefit. This is usually accompanied by a desktop valuation, in which the valuer researches “similars” at their desk.
Pay Attention to Your Mortgage Broker
The broker sends their own estimate of the property’s worth to the lender. Make sure you know the price. If the lender asks you what you think the property is worth, don’t undercut the price your mortgage broker has given.
They Will Underestimate Rather than Overestimate
Valuers will make sure they err on the side of caution. If they overestimate the value of a property, it can give them a bad reputation with the lenders and compromise their business.
Do your own research. Know what your property is worth before you bid on it.
We can help you at Smartline Rockingham. Call (08) 9527 1800 today.