Beware of inflated valuations
Brett Alegre-WoodChairman, YPC Group
Hey guys,
Before we can cover true discounts it is vitally important that you understand one simple fact: the price you're generally paying is not normally the actual market valuation.
It is normally higher, in some cases up to 10-15% higher.
Unfortunately in this industry, developers, builders and property clubs will inflate the actual true valuation of the property in order to pass on or advertise discounts off this valuation. Be warned, our industry is rife with this practice.
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You should be skeptical any time that you are told the valuation price of a property you are about to invest in without it being back up by a written valuation. This written valuation must be from a surveyor registered with the Royal Institute of Chartered Surveyors (RICS) and the valuer must be on the panel of lenders that you wish to choose for a mortgage.
Some property clubs will try and tell you that it is not a problem that you will be using their solicitors and their mortgage brokers, this is sometimes a sign of price inflation. Be wary. You may not discover this inflated value until you attempt to re-mortgage after completion.
Live with passion
Brett Wood
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