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E-valuations

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Transcript

When considering evaluations as a property owner who owns that property
being evalued, that can be phenomenal because you can start to see where it’s valued, where you can take your Equity, your loan out and make the move on your next investment. But as someone looking to purchase evaluations can be a good thing and a bad thing at the same time. A good thing is if the comparables within the report and within the ages of the properties within them, the condition of the properties within the layout
if all these things are there and the algorithm is done a good job, then they may really come out quite well.


When considering the opposite though imagine, you’ve got this evaluation that comes up lower than the price that you’re looking to pay or how much is listed for and use that as a guide and you go ”Well, that’s not what I’m buying.” ”I can’t pay that much” that’s going to be too much the Eval of A and Zed or CBA or another bank only said that. So when you start thinking that howcome a couple months later someone’s purchased that property
paid more than the evaluation and it’s settled. Which means that either they had a lot of cash and had no issue with evaluation or that the bank genuinely, valued it appropriately for what they paid because that was the real value of the time.


So that’s when you should consider evalue have actually made so many people miss out on properties time and time again because I thought they were paying too much when really the algorithm has not considered
so many more factors that you can’t see from a computer and that’s at that point when evaluations can be impactful. Now evaluations on the other side
when you’re looking to purchase. I’ve seen sums with comparables was spot on and we did reviews of them and the evaluation was higher
than what we were looking to pay. Now what people don’t know is evaluations pre-purchasing can change and they can actually change
once the settlement goes through and perhaps one to two months after
you start to see some movements in the evaluation to represent what has happened with that property considering it’s sold for the amount you purchased it for and that’s when there’s evaluations drop back down.
Now in the case they go back up that could be because other comparables happened you’re now the owner of the property and those comparables have picked up because there were better priced in terms of more expensive and that that angle it’s your it’s in your favor because you can now lend in an instant added value.


So evaluations helpful to get a guide. But remember it doesn’t condition doesn’t consider all that because of the property and at the same time,
it can change once a transaction goes through and it can even change when listings change. For example property might have been listed at 500
amongst the comparables, the algorithm is that 510 but they’re listed at they had a bit of distress and they moved it down to 490 and then sometimes the evaluation drops with it. But why did it drop just because they listed it less. It could be some genuine distress that’s there, but the property could still be worth amongst its comparables at 510. So from that comparison have a look at e-values for its pros and cons can be helpful guide at times but can also lead you astray always consider the deeper checks and due diligence when looking to purchase property.


That’s it from us here at InvestorKit, the experts in Wealth Creation, helping you take action.

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