Valuing Land based on Gift Incentives

My phone rang.

Hi Berny, its X from RAMS, your valuation came in below the purchase price because of the gifts/rebates?

What!

Okay, but so what? So what if there was an incentive by Landcom or Blacktown Council for people to buy land at The Ponds?

So, while we would have bought land without the Woolworths Gift Card Incentive or Landscape and Build Rebate, Yes they were nice incentives that made us purchase earlier rather than later.
What we didn't expect is that RAMS (WestPac) would value this land by looking at the purchase price and then taking away the Woolworths gift value of $5K and the Landscape/Build rebate of $5K. They said that the purchase price would have taken into account these rebates. The Sales Office at The Ponds said that wasn't the case.

So, RAMS recognises Woolworths cards as liquid monetary forms?

We look forward to paying our mortgage payments with the Woolworths gift card. Would that be payment by VISA, Mastercard? No, Woolworths? Gail Kelly seems to think so.

So, we were ready to put up a case to have this valuation reassessed. We even spoke to our solicitor as to how we could do it. Funny, he didn't seem to think it was an issue and even saw it from the banks perspective.

Huh? I thought you were our solicitor, not RAMS. Don't worry, I'll write a post about choosing a solicitor, next.

In the meantime, we are arguing with our RAMS rep. The gift and rebate are NOT gauranteed. If we exchanged after the Woolworths gift date expired, would they then be revaluing our land higher by $5K? If we don't build within 2 years of contract build date, we miss out on the landscape rebate? These are not guaranteed rebates. What the heck is this valuer thinking?

Blah blah blah. Stomp, stomp.

Well, I wish I could write that we were able to get another valuation that came in at either the purchase price or above. I can't.

We never pursued it in the end. We simply accepted that we were 'ripped off' and comforted ourselves with the knowledge that while we put pressure on ourselves to raise the difference by settlement, at least we will have a lower loan and some immediate equity.

I read a few days later on an online Australian Home Forum that some people who had experienced this valuation issue with their lenders at The Ponds were able to start a new application with another provider and achieved that higher valuation. Good on them I say.

Of course, I couldn't help but write an email to our RAMS Rep after reading the above post and chastise him for not thinking to do this. I dug the point in a little more when I said that the successful lender in the example was St George, who is owned by WestPac who also backs RAMS, so why the double standard?

Okay, enough said regarding our valuation experience.

While I read in this useful home forum that the Woolworths Gift card won't be available for collection until after settlement, we may still try and pay some of our future mortgages with our Woolworths card.

We'll let you know if we succeed or if in the end, whether we even bothered.