Bank Value for flat?

Closed Thread
  1. #1

    Join Date
    Jun 2005
    Location
    in my home
    Posts
    3,451

    Bank Value for flat?

    so we have been looking more and more at flats to buy, and found some that we felt were an attractive offering...but when we got the bank values they were indicating a price about 20% lower selling price.

    is this normal?
    how do i estimate real value of flat with bank value?


  2. #2

    Join Date
    Jun 2005
    Location
    Hong Kong
    Posts
    23,205

    The only "real" value of an apartment is the price someone is prepared to pay. It's quite common for vendors to pitch for a high price, and for banks to want to keep the lid on an over-exuberant market.


  3. #3

    Join Date
    Jun 2005
    Location
    in my home
    Posts
    3,451

    but should i be worried if the selling price is 20% higher then bank value? i thought selling prices are a little high, but not 20% high.


  4. #4

    Join Date
    Dec 2002
    Location
    θ–„ζ‰Άζž—
    Posts
    47,964

    As hy puts it. The value could be higher due to several reasons... car parks included, quality of decoration, view ... banks do not take those into account.


  5. #5

    Join Date
    Mar 2009
    Location
    Hong Kong
    Posts
    2,260

    the banks valuation means prety much nothing in terms of what you should pay. it is only there to measure how much you can borrow. the banks compete with each other to offer the best valuation (the higher the valuation, the higher amount you can borrow and the more likely you will choose that bank to get your mortage).

    when i got my flat earlier this year, the banks valuation was a bit under what i paid. but they may have valued it once a few years ago and then decide the current rate based on the average prices (if the flat prices on average go down by 10%, they will lower the value by 10%). so if you have a good flat in a good area, it will hld its value better than the 10% drop.


  6. #6

    Join Date
    May 2009
    Posts
    675

    Surprisingly (well, to me at least) a mortgage broker told me that once I'd signed the provisional S&P agreement it would be possible to get some some banks to change their initial valuations (which were approx. 10% below the agreed price). I didn't actually believe her, but within 24 hours of me passing a copy of the PS&PA to her she came back with 3 bank valuations that all matched the agreed price from banks who'd previously valued it lower. Don't know if this is always possible, but worth knowing...


  7. #7

    Join Date
    May 2009
    Posts
    675

    Oh, but one more point - I also later discovered that if you're going through HKMC they may well value the property themselves at lower than any of the banks you've applied for a mortgage with (which of course you choose because they're close to the agreed purchase price), in which case, they'll only approve lending you that much and so you still may be left with a shortfall.