Just had our property valued by the banks it is coming up 150k less than the actual sale price (and the sale price is not inflated looking at the market for similar properties) - does anyone know what the bank valuation really means? Is it the amount the bank is willing to lend a prospective buyer before the buyer puts the 20%deposit down? Really confused as the bank valuation is less than we paid for the property 5 years ago!!! Any advice would be great.

Think you got the answer on the other thread. Bank will lend 80% of their valuation. Means buyer needs to put down more than 20% to meet your selling price but they would be risking themselves to do that.

Have you spoken with your bank to get your house valued? Don`t know if it`s common practice here but could be a negotiation ploy?

I also think it is negotiation ploy. When we have bought properties in the past (UK) the lender would send a valuer to the property - do you know if they do that here in Switzerland and would you know on what information they base their valuation?

They base the value on land size plus build cost less depreciation. They also know what properties actually sold for against asking prices. It depends what your time scale is & if you care if you sell or not.

It's a tiny market, well not really a market at all, properties can take years to sell.

The bank did not send a valuer to evaluate our property. They know how much it cost because they were the bank that held the mortgage for the previous owner. Based it on land size/ location, house sq m, upgrades etc Basically we gave them the same dosier we were given as a "selling tool" when we rented this house. ( we rented it and then bought the same house).

If you can`t get a bank to value the house at your original purchase price you have a pretty big problem. Sorry.

When you sell it, that will tell you the real price. Banks tend to undervalue, realtors overvalue, both are protecting their interests.

Thanks for all our responses. I was wondering if the price they valued it at does not include the 20% deposit the buyer has to put down this would make the value nearer to what we paid?

It does include the 20%.

Who set the sale price? If you have not done so, you may want to invest in an appraisal. The HEV (Homeowner's association) offers this service.

To me it makes no sense that the property is valued now at less than what you paid for it 5 years ago. Are you able to see the separate values for the land and the house and compare this to the previous appraisal ? (assuming there was one).

Generally this should not happen, but there can be reasons why, e.g. not maintained to standards, or new highway or other undesirable thing happening in the neighborhood.

But in general, I think it is the banks way of slowing down a very overheated property market in many parts of CH. Banks have gotten more conservative and have re-evaluated things in the last year or so, limiting their risk and putting more on the buyer. Perhaps check around at a number of different banks, there is still quite a wide range of values in my experience.

The value of property is dependent on how much (if anything) a bank will lend, as most people use bank financing to purchase. Any leveraged investment covers a higher risk of price fluctuations, which home buyers seem to forget.

If banks stopped lending, prices would drop to what people can afford to pay, so prices could fall by 70-80%. It would be to the advantage of majority of the population's advantage if that happened...........time for a law change!

OR it would be to the advantage of the rich with liquid assets who would buy houses cheap (cheaper than now) and keep rental prices the same.

It sure is !

Especially with LIBOR mortgages at 1% or under