How HomeSec values your property, without a valuer

The problem with how most lenders value property

Paul describes two common approaches, and why both work against the borrower. The first is a fire-sale value, sometimes called a mortgagee-in-possession or 30-day sale value, which marks the property down to what it might fetch if it had to be sold in a hurry. The second is a sworn valuation by a licensed valuer. Valuers carry professional indemnity insurance and, as Paul puts it, they have their own position to protect, so the safest figure for them is a conservative one. His example is a $2 million property valued at $1.6 million. On a loan sized as a share of value, that gap comes straight off what the owner can borrow.

What HomeSec does instead

In Paul's words: "We don't use valuers. We do all our own appraisals in-house." The appraisal is informed by the people who know a local market best, the real estate agents who sell in it. In practice HomeSec instructs an agent local to the property to prepare a market appraisal on its behalf, which takes hours rather than the days a valuation needs. That is one of the main reasons a clean file can fund in as little as 24 hours.

Today's market, wherever the property is

The figure is the property's value in today's market, whether it is a house in a capital city or a property in a regional centre. Paul is specific about what that excludes: not next year's market, not last year's, and not a fire sale. The loan is then a share of that value, which keeps the arithmetic simple and fair for the borrower.

Lending limits are the ones HomeSec publishes today: up to 80% on residential property and 70% on commercial, lower on large acreage and on properties worth less than $800,000. Where a recording mentions other figures, these are the ones that apply.