Our broker challenged the valuation a couple of times which was the cause of the delay however he was not able to improve the value.
As it stands now we are sitting $40k below our build cost. This is only slightly higher than we expected and as such we have some funds available to cover the amount (In the end we are borrowing less by paying this out of our pocket so while it hurts now it is better in the long run).
We received copies of our valuations which was great to be able to see how they achieved the numbers. Some notable points are below.
- They quote the industry average build price between $900 and $1200 per m2 over the living area. (Our build appears to sit around the $1500 per m2)
- They listed 15 recently sold properties in and around our area as reference material to help value our build. We could see that houses that were either larger in living area or smaller however in living area but on bigger land sold for less than what our total house/land contract is at which explains the valuation.
- They listed 15 recently sold properties in and around our area as reference material to help value our build. We could see that houses that were either larger in living area or smaller however in living area but on bigger land sold for less than what our total house/land contract is at which explains the valuation.
- Only two of the properties listed had pools and in both examples our land/house was bigger and property has been valued above the sale price of both.
- There is mention of the fact that there is no landscaping/driveway/fencing quotes included for the valuation which suggests the valuation would have been more if this was provided. Specifically it is mentioned that without a driveway "marketability of the property will suffer if offered for sale". I would suggest for anyone going through valuation to include pricing for the driveway as well for this reason.
- It appears there is very little monetary value in adding a pool to your property at this stage of a build. Once the whole house and landscaping is done it may work out better as the valuer can see the whole package as a finished product however I believe this shows that banks a reluctant to bet on a pool adding value to a home.
Whilst we are not overly happy with the low valuation I can understand how they valued the property at the price they did. The explanations in the report make sense and we always knew we over capitalised the build putting in expensive fittings and our (amazing) floor tiles.
The only grey area for me is the question "if we built a Boutique Home at minimum price and didn't upgrade anything would that fall into the $900 - $1200 per m2 industry average build price or would there still be a mark up from Boutique...?"
What do you think? Would a minimum spend Boutique Home come in on valuation??
The only grey area for me is the question "if we built a Boutique Home at minimum price and didn't upgrade anything would that fall into the $900 - $1200 per m2 industry average build price or would there still be a mark up from Boutique...?"
What do you think? Would a minimum spend Boutique Home come in on valuation??
