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Old 17.09.2011, 14:28
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Buy a new terrassehouse, but Bank evaluate the house with much lower price

Therefore only can agree me on mortgage with what they evaluated.
there are total 16 houses in building. I choosed one because it is new and location is good.
I go back to discuss with the seller for the price. he said I shall go to other banks. he will not go lower because the bank is strange while other banks are OK with the price.
I don't know why the Bank evaluated ( with 2 times expert's check as I was told) and the listed price is so different(+170,000Fr), the bank is dealing mortgage everyday, how i can judge, I am foreigner without professional knowledge....: be blind just take it? or coward...
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Old 17.09.2011, 14:36
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

This is common in Switzerland. From my experience the banks tend to be quite conservative when it comes to valuing real estate. However, different banks have different views, so it is worth your speaking to other banks as well.
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Old 17.09.2011, 14:39
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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This is common in Switzerland. From my experience the banks tend to be quite conservative when it comes to valuing real estate. However, different banks have different views, so it is worth your speaking to other banks as well.
Your bank may be right...or maybe they think a house price correction is due soon and want to avoid negative equity situations, or just plain protecting your interests...
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Old 17.09.2011, 14:47
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

Your bank is telling you what the real market value is & therefore what they will lend you.

Why would anybody in there right minds want to find a bank to lend them more that it's worth? With a new build fittings will depreciate fast, a 100,000k kitchen does not have a huge second hand value.
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Old 17.09.2011, 15:04
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

This is getting more and more common in my area as the market here is so over-valued.

Prices here are absurd; many banks do no believe that this can last, and so are taking the safe road. I've recently heard of a property in the neighborhood where the interested buyer's bank valued it at 40% of the asking price.

The question is: what do you believe about the market? If you truly think that this property is worth the asking price, then you need to stump up for the difference. If you are unsure about the market trend, probably best to listen to your bank and walk away.

Are you looking for a forever home, or an investment? One issue to consider is that it can be expensive to sell a property if you have only owned it a short time. There are tax penalties, canton dependent, if you sell within the first 5 or 10 years.
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Old 17.09.2011, 15:13
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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There are tax penalties, canton dependent, if you sell within the first 5 or 10 years.
Only if you sell at a profit, which looks unlikely in this case!
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Old 17.09.2011, 15:15
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

Play safe- as Meloncollie says, prices are really over inflated at the moment. I remember so many friends in the UK being totally stuck in negative equity is the 80s - and with mortgage rates reaching 19%! Banks do talk twaddle at times- but I think they are giving you good advice.

Some areas are predicted with rises- that is those surrounding the overinflated areas which are now getting full to bursting - so areas like Fribourg, Yverdon, Neuchatel in Romandie for instance.

Last edited by Odile; 17.09.2011 at 15:27.
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Old 17.09.2011, 15:18
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

Very interesting, must keep this in mind if we decide to look at buying (just been here a little over a year).
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Old 17.09.2011, 15:26
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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Play safe- as Meloncollie says, prices are really over inflated at the moment. I remember so many friends in the UK being totally stuck in negative equity is the 80s - and with mortgage rates reaching 19%! Banks do talk twaddle at times- but I think they are giving you good advice.
With NatWest my rate never went above 14%, I don't think any normal mortgage rate hit 19%.

The strong CHF should have a negative effect on property value, due to an illiquid market, that has not obviously occurred.

It's normal to see second hand properties on the market for several years here, as you also taxed on notional rental income, it's not an attractive investment to the majority of Swiss.
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Old 17.09.2011, 15:27
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

I was warned about this when we first bought some 15 years ago. And sure enough our lender estimate the price at about 15% below what we were being asked to pay.

We had already put this in our calculations and so were able to supply the shortfall ourselves.

We moved in 2008 just before the financial crash and the lenders didn't even look at the property - all they required were the builder's spec. and they approved the full asking price...
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Old 17.09.2011, 15:40
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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We moved in 2008 just before the financial crash and the lenders didn't even look at the property - all they required were the builder's spec. and they approved the full asking price...
Was the bank UBS by any chance? I suspect lending has become tighter today.
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Old 17.09.2011, 15:41
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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Was the bank UBS by any chance? I suspect lending has become tighter today.
ZKB, but I expect things have tightened up their too now...
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Old 17.09.2011, 15:49
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

FMF, they did reach 19% in the UK, I can assure you - a few nerve racking years I can tell you, as we had just over-stretched ourselves due to a house falling through weeks before I was due to have baby no 2 - and husband already moved and living in digs.
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Old 17.09.2011, 15:55
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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FMF, they did reach 19% in the UK, I can assure you - a few nerve racking years I can tell you.
OK looks like your right, I had a mortgage from Nov 1982, looks like they were higher before, however inflation was pretty high as well.

http://www.ehow.co.uk/info_7792510_y...age-rates.html
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Old 17.09.2011, 15:55
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

This happens in London all the time, and has happened to me. Banks, especially now, value conservatively. Banks are also no experts (the might of UBS isn't brought to bear on your little house, it's one assessor with an interest in not overvaluing). Get another bank to have a look at it, or ask your bank to go back and revalue. Other lenders may value differently - if they don't, then no one's buying in your area and prices will come crashing down to the bank's valuation, although I've never seen this happen before. There will be someone who wants your mortgage business but you should end up paying a slightly higher rate.
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Old 17.09.2011, 22:16
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

Is this really new? I know it was already happening in the Geneva area 7/8 years ago and people were putting down the extra difference in cash to secure the house. Even our house, in a non lake facing village, was estimated 40K less than we agreed to pay. When we talked to the bank, they just raised the estimate. Ok, 40K is quite a bit less than 170K.

If I were the OP I would be looking very carefully at what houses with similar specs are selling for in the area. The developer could be "trying it on".

Is this the base price or is this with a whole lot of upgrades in the house?
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Old 17.09.2011, 23:22
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

Bought my place about 8 years ago, there was no problem with the valuation - the bank even asked me if I wanted to borrow more? Go figure?
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Old 18.09.2011, 09:33
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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Is this really new? I know it was already happening in the Geneva area 7/8 years ago and people were putting down the extra difference in cash to secure the house. Even our house, in a non lake facing village, was estimated 40K less than we agreed to pay. When we talked to the bank, they just raised the estimate. Ok, 40K is quite a bit less than 170K.

If I were the OP I would be looking very carefully at what houses with similar specs are selling for in the area. The developer could be "trying it on".

Is this the base price or is this with a whole lot of upgrades in the house?
Unfortunately this is really new, just start building now. it is also just base price. 5 or 6 house in the same building have been sold, but I do not know the detail, althrough I have met the buyers once altogether.
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Old 18.09.2011, 10:14
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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Unfortunately this is really new, just start building now. it is also just base price. 5 or 6 house in the same building have been sold, but I do not know the detail, althrough I have met the buyers once altogether.
Be very careful becuase on top of the base price there could be lots of extras. Many properties are priced without these.

Also, you need to be certain you are in fact entitled to buy a property.
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Old 18.09.2011, 20:26
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Re: Buy a new terrassehouse, but Bank evaluate the house with much lower price

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Unfortunately this is really new, just start building now. it is also just base price. 5 or 6 house in the same building have been sold, but I do not know the detail, althrough I have met the buyers once altogether.
I meant that the situation of houses being undervalued by banks isn't new, not that the house you want to buy isn't new.

Again, be careful here because those extras will add a lot of money on top of the base price. You could well be over 200K on top of the bank's estimate.

To be honest, I'd be looking for something else. This seems too much over the odds to me. But I am extremely conservative with my money.

Last edited by miniMia; 18.09.2011 at 20:58.
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