VALUATION less than Contract Price, potentially devastating outcomes
Manage valuation variances to protect settlements with AffordAssist
Dear All,
With AffordAssist all settlements may be possible on the agreed full contract price.
The AffordAssist product, Deferred Deposit Agreement (DDA) may serve to provide the means to defer the valuation variance thus settle on the agreed full contract price. Benefits to all the stakeholders are obvious. Yes.
No. Need background – avoid potentially devastating outcomes, please read below.
Industry process – the theory
The home loan lender assigns a property valuer to provide a report with their professional opinion of the selling price and rental. Lenders generally have a number of valuers on their panel. The property value noted within the report is used by the lender to determine their maximum loan amount against the property value.
Valuations are not an exact science; it is not unusual for a valuer to have a differing professional opinion to another valuer. i.e. within the industry it may be possible to see variances of 5%.
The real-world processes and outcomes
The valuation process (including associated stakeholders and influencers) can result in significant variances relative to the contract price. These valuation variances may have devastating outcomes for the:
1) Buyers (and where applicable their family that has helped with cash contribution), may forfeit their cash deposit and stand to be sued for outstanding balances
2) Vendors, in the case of a developer, this may impact other sales and the project profits
3) Service process inefficiencies relating to agents, mortgage brokers, lender, legal teams
4) Credibility optics of holding one professional in higher regard over another, may lead to other consequences
Bottom line, there is value in having a sale settle at the agreed full contract price TODAY.
Click to know more: https://www.affordassist.com/
AffordAssist is not a broker, developer or project marketer. Provide and manage the governance process. Have a panel of approved brokers. Are you a broker, lender, developer or agent? Join our mission to help increase home ownership. We welcome your team work; together we can help more into home ownership.
Kind regards
AA
VALUATION less than Contract Price, potentially devastating outcomes
