Thanks friends!
I forgot that 80% is still possible - for buyers who are buying their first property.
Thanks for reminding me.
Even if the bank is willing to value the property higher, it is going to cause complications.
Example:
Seller and buyer agree on sale price of $1 million.
Buyer (buying his 2nd or subsequent property) can get only
$700,000 loan from bank (70%). However, he wants to get a higher loan quantum. So the seller and buyer agree that the sale price is, say
$1.6 million (which of course if not true). Bank gives loan of 70% of
$1.6 million =
$1.12 million.
Problems:- Bank is a willing party to circumvention of laws - no bank will do that.
- Seller and Buyer are declaring a false sale price (which is clearly against the law).
- Seller may not return the $0.12 million (above the true sale price of $1 million) to buyer
This has happened a few times before and sellers, buyers, agents and even lawyers involved in such schemes have got into trouble.