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Old 07.07.2011, 17:04
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How banks value properties?

Hello.

I noticed thank some banks valued the apartment that i would like to buy less than others.

How did they base their judgment / what criterias? Mortgage of 80% can be less then.

A bank even asked me to visit it, but others not.
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Old 07.07.2011, 17:07
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Re: How banks value properties?

Depends on the bank - and how thoroughly they value it.

I have seen valuations that lists (and provides a value of):

1) Area of land
2) Liveable volume
3) Condition of the various rooms
4) Extras - eg pool, garage
5) Local amenieties.

Depending on 3,4,5 a % is added/subtracted from 2.

1+2 is added together
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Old 07.07.2011, 17:12
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Re: How banks value properties?

like i mentioned before. It is done by a programme. The same us realtors use. it takes quit a bit to put all the info it and based on that it makes an estimate.
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Old 07.07.2011, 18:15
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Re: How banks value properties?

If you are going to get a mortgage or use the property as collateral against a loan, they will give a lending value based on what they calculate to be possible downward fluctuations in the value.

e.g. if you have a $1m house, you may only get $700k against it as they have to make sure they can recover their money if you default and the property market takes a dip.

Cheers,
Nick
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Old 07.07.2011, 18:21
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Re: How banks value properties?

How much a house 30 , 40 or 50 y. Old is compared to new ones?
Some new buildings in my opinion have a worse architecture than the new ones. For example now is very common a bathroom without window, before it was not like this. Speculation?
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Old 07.07.2011, 19:16
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Re: How banks value properties?

2Funky, if you want specifics, this is a question that only your bank can answer. Talk to your mortgage guy - the gentleman who handled our mortgage was happy to share their formula and assessment of the property we bought - as well as the ones we decided to walk away from. The bank's assessment of those properties certainly played a part in our deciding not to pursue them.

(In addition to the criteria listed in above posts, for the property we bought the bank's assessment took into account such factors as distance to public transportation, access to main commuter roads, road noise, lake view, mountian view, Steuerfuss, community amenities, local schools, and even hours of sunlight. And the flexibility or lack thereof of the local Geraniumgemeinschaft.

(Ok - I made that last one up. But they should have added it to the assessment. )
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Old 07.07.2011, 20:46
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Re: How banks value properties?

Ultimately the value is what somebody else would pay, the market is very sluggish. Building costs are very high and valuatioons are based on cost to replace less depreciation + land value.
I looked at several fairly new houses that were for sale well below valuation, nearer taxable value.
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Old 07.07.2011, 21:58
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Re: How banks value properties?

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Ultimately the value is what somebody else would pay, the market is very sluggish. Building costs are very high and valuatioons are based on cost to replace less depreciation + land value.
I looked at several fairly new houses that were for sale well below valuation, nearer taxable value.
I agree with what you are saying but bank valuations here are very conservative, almost unrelated to what you could sell the property for. I am speaking of single family houses, maybe with apartments their chance of making an error is less so they are closer to the sale price. We had one done recently and it was all a formula Chf xxx for land/volume/rooms ect, nothing personal about the proprty at all (eg condition/style/location) really a waste of time.
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