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bank valuation vs price of property

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  1. #11

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    I tried a few... actually 5% difference was the best case scenario using Hang Seng's valuation. Bank of China has a valuation which is $170k less than Hand Seng's :O!

    I don't know why my agent is telling me it's fine. If it falls through based on this they'll get to make their commission a second time, but it can't be fun for them or good for their reputation.

    I guess I could sign a preagreement with a clause that finance is successfully approved for the accepted offer amount. But I doubt many sellers would go for that.


  2. #12

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    Sometimes different people from different branch of the same bank will give you different valuation.
    If your agent is telling you that you can get valuation same as price ask him the contact he has in which bank and check with them.


  3. #13

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    Thanks, I'm getting him to do this now.

    I spoke to the mortgage department/brokers at Midland Realty and was told that recently banks have been very strict and have recently not been going over their own valuations. Not good news!

    Seems to me like prices are growing very fast right now so there is more chance their valuations are lagging at least slightly.


  4. #14

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    can't say have recently spoken to a bank manager regarding this situation but in the past have been told that friends have been able to convince tbehe bank to revise their valuations with little problem. Perhaps it is a different situation now and also the big disparity might require more negotiation.
    Posted via Mobile Device


  5. #15

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    Typically what happens in a rising market is that properties sell at around 10% above bank valuation. Usually, you can just get the deal done, and "push" the bank a little to up their valuation to help complete the deal. The smaller banks in HK are actually much better at doing this than the larger ones like HSBC or Citi.


  6. #16

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    Question:

    Lets say a flat is priced at 3 mil with a bank valuation of 2.6 mil.

    Does this mean the bank will only lend 2.6 mil - down payment (lets say 10% for example, 260k) = max loan 2.34 mil. Meaning I need to cover the 400k difference?

    Or does it mean 3 mil - down payment (300k) = 2.7 mil, and I need to cover an extra 100k to meet the bank valuation of 2.6 mil.


  7. #17

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    The bank will only lend up to 70% of their valuation ($1.82M in this case). You can get an additional 20% from the Government mortgage guarantee scheme.


  8. #18

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    Quote Originally Posted by booth:
    Question:

    Lets say a flat is priced at 3 mil with a bank valuation of 2.6 mil.

    Does this mean the bank will only lend 2.6 mil - down payment (lets say 10% for example, 260k) = max loan 2.34 mil. Meaning I need to cover the 400k difference?

    Or does it mean 3 mil - down payment (300k) = 2.7 mil, and I need to cover an extra 100k to meet the bank valuation of 2.6 mil.
    The former only. They will only ever lend on their valuation irrespective of what the "market" valuation is.