Asking Price Above bank valuation?
I need help. I saw some places that I like but bank valuation is about 50 - 80k less than valuation. Agents are given reason such as bank over conservation in their valuation. In the past when market is good bank give higher valuation, now they give lower, hence owner asking lower too....
give an example. mirage tower asking last time was at 1100 psf and bank was able to give matching valuation...now asking about 1000 psf but bank giving say 850 psf.... If I have bought in the past I would have been able to get higher loan....now I get lower loan but cheaper price.... and agent keep saying that if I wait in a few months, i can get higher loan but then prices would have rise....
I always have the opinion that units never transact above bank valuation but nowadays bank seems to give low valuation...any expert opinion?
Valuations - a guide and no more
Hi,
In the end, it all comes down to what the seller thinks is a fair price for the property. There's enough data from URA caveats and propertyguru type sites for sellers to make an informed judgement on a price they are comfortable paying.
This means that bank valuations (from the same people who got us the boom & the bust & keep revising forecasts) is never the final word on what the price can/should/will be.
Bank valuations are used to 1) figure out how much loan we can realistically secure, and 2) how much over/under our budget that is 3) negotiating point with the seller
So far, I haven't seen a single agent or a buyer who has a presented me with a written bank valuation (even on an email) for the property they have put on sale. It's always been the other way around when I have taken emails from my bankers to them(!). And then you will hear comments like ' valuations haven't caught up' or 'your bank is multinational, very conservative, not in touch with local sentiments(!!)'
The fact that so many people are now ready to sell clearly indicates that the sellers don't think the boom will last. And the fact that buyers are now rushing in to buy only reinforces this belief.
I don't see why I should top up on my bank valuation (if I agree with it to begin with). The boom's over. I have currently extended my lease at a 40% lower rental than last year, and more than happy to wait.