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Old 31.07.2020, 22:52
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Bank Valuation of Property

Has anyone experience of Banks wildly disagreeing on the value of a property? I am in the market to buy a house and my bank UBS value it at over 20% less of what CS value it (estate agents bank).

Therefore UBS not willing to go higher and understanbly the seller being advised by the agent not willing to drop their price. House has been on the market 9 months so it seems itís over priced.

Just very strange how Switzerland two major banks can vary in valuation so differently
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Old 01.08.2020, 08:02
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Re: Bank Valuation of Property

Not unusual.

What you could ask for is the seller to provide an appraisal from the HEV or someone is a member of SVIT. These are not bank appraisals. Banks just run their property through the system. They generally do not visit the property.
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Old 01.08.2020, 08:07
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Re: Bank Valuation of Property

It's not really strange at all, as the paucity of properties on the market at any time means that there is little in the way of fundamental value.

Valuation is largely subjective. One bank may see attribute X as worth more than the other, one may see negative Y as problematic where the other does not. And of course, the seller and agent may have vastly different views than the banks.

In the end, it's a question of what the market will bear.

Unlike other places, it is rare that a seller here is under pressure to sell the house quickly. Few need the money within a short time frame, indeed more often than not sellers are willing to let a property sit on the market for years until someone comes up with their price. Hence the fantasy prices.

Coming from the US midwest, I initially put more importance on fundamental value as I looked at properties - but I have since learned to let that go. There simply isn't that same idea here.

All that matters here is: Do you, personally, feel that the price is right for you? If so, make an offer. If not, walk away.

The Swiss property market is a different beast than markets many of us know. Key is to never get emotionally invested until you have the keys in your hand.

Good luck!

Last edited by meloncollie; 01.08.2020 at 08:24.
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Old 01.08.2020, 12:05
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Re: Bank Valuation of Property

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Has anyone experience of Banks wildly disagreeing on the value of a property? I am in the market to buy a house and my bank UBS value it at over 20% less of what CS value it (estate agents bank).

Therefore UBS not willing to go higher and understanbly the seller being advised by the agent not willing to drop their price. House has been on the market 9 months so it seems itís over priced.

Just very strange how Switzerland two major banks can vary in valuation so differently
Valuation is an art no a science. Itís what someone thinks a thing is worth, nothing more and the accuracy will be determined when the item is sold.

In this case it seems the owner and his bank have misjudged the market.
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Old 01.08.2020, 12:17
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Re: Bank Valuation of Property

Our bank clearly thought that our place was worth MORE than the sales price, as they gave us an interest only mortgage (and offered us even more money if we wanted to do renovations) with only 30% in cash.

Tom
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Old 01.08.2020, 12:41
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Re: Bank Valuation of Property

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Valuation is an art no a science. Itís what someone thinks a thing is worth, nothing more and the accuracy will be determined when the item is sold.

In this case it seems the owner and his bank have misjudged the market.
Correct but the hard part is convincing them to reduce to a reasonable price.

Has anyone any experience with independent valuation providers?
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Old 01.08.2020, 15:20
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Re: Bank Valuation of Property

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Has anyone any experience with independent valuation providers?
Yes. What do you want to know?

As a buyer we had a property valued which came in at about 70% of the asking price. We offered that much but it was unsurprisingly rejected. The key point the valuer kept coming back to was that it was a "Liebhaberobjekt", i.e. it would be worth more to the right buyer, but it would have to be a very special buyer. They were right too, https://www.google.com/maps/@46.7610...7i13312!8i6656

As a seller we had our apartment in Engelberg valued and used it to set the price, at the top of the suggested range. Sold it to a friend already in the same block, who paid what we asked with no quibbles, so clearly it was worth that much to them.
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Old 01.08.2020, 16:08
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Re: Bank Valuation of Property

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Correct but the hard part is convincing them to reduce to a reasonable price.
Your reasonable ≠ the seller's reasonable.

Simple as that.

If you really want the house, you will need to offer the seller's price. (Or more if there is competition.) If the bank does not believe the house is worth that much and will only mortgage at a lower price, you will then have to stump up the difference.

Or you walk away.

Trying to convince a seller to reduce the price based on bank (or anyone else's) valuation is often a hiding to nowhere. Unless the seller is desperate to sell, most will simply tell you to get lost and go on to the next buyer.

Simply make your best offer and see what happens.
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Old 01.08.2020, 16:53
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Re: Bank Valuation of Property

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Correct but the hard part is convincing them to reduce to a reasonable price.
I spent a while working at an auctioneers and my experience was that you can't, they have their expectations and only experience of trying to sell it and their need to get their hands on cash will do it.

If a seller can afford to hold on, they will often leave a property on the market for ages, expecting someday someone will see the value they see in their property. It is only when a catalyst such as the need for cash or to move on comes along will they start to consider adjusting their expectations to reality.
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Old 01.08.2020, 17:22
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Re: Bank Valuation of Property

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I spent a while working at an auctioneers and my experience was that you can't, they have their expectations and only experience of trying to sell it and their need to get their hands on cash will do it.

If a seller can afford to hold on, they will often leave a property on the market for ages, expecting someday someone will see the value they see in their property. It is only when a catalyst such as the need for cash or to move on comes along will they start to consider adjusting their expectations to reality.
Price discovery can be amazing, I know someone in the UK who was getting divorced & she valued all the properties etc to be split. The husband then died, several of the properties were then sold over the next 2 years. The proceeds were 75% or less of the valuations the wife had got when she wanted to be paid off!
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Old 03.08.2020, 21:58
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Re: Bank Valuation of Property

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Yes. What do you want to know?

As a buyer we had a property valued which came in at about 70% of the asking price. We offered that much but it was unsurprisingly rejected. The key point the valuer kept coming back to was that it was a "Liebhaberobjekt", i.e. it would be worth more to the right buyer, but it would have to be a very special buyer. They were right too, https://www.google.com/maps/@46.7610...7i13312!8i6656

As a seller we had our apartment in Engelberg valued and used it to set the price, at the top of the suggested range. Sold it to a friend already in the same block, who paid what we asked with no quibbles, so clearly it was worth that much to them.
Where did you find your valuer? I know HEV do valuations but CHF 350 for a valuation you fill in online is quite steep
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Old 03.08.2020, 22:05
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Re: Bank Valuation of Property

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Where did you find your valuer? I know HEV do valuations but CHF 350 for a valuation you fill in online is quite steep
Thats very cheap, remind me what percentage of the property cost is? If the value is 100K lower & you can negotiate a better price 350 is peanuts.
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Old 03.08.2020, 22:42
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Re: Bank Valuation of Property

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Thats very cheap, remind me what percentage of the property cost is? If the value is 100K lower & you can negotiate a better price 350 is peanuts.
Yes it is relatively however, Iím more used to a professional coming to view a property and assessing it first hand, giving a proper valuation rather than filling in a few blanks online but yes this assessment could give a great starting pointing for negotiations
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Old 04.08.2020, 08:18
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Re: Bank Valuation of Property

depends on how desperate the seller is, i have bought and sold a few in the uk,im not sure on swiss privacy laws, but try this, i did and it worked for me in the uk
find out as much as you can about the seller, do a company check on their name to see what assets they have, or debt,age,and general position in society
i recently bought some land off a developer in the uk, did all of the above and discovered he was in it to the neck with the banks and the tax man,i "found out",how much debt he was in,and offered him immediate cash a little bit over that,and ended up getting the land for about 30% less than he paid for it 10 years earlier ,
however in zurich, i just paid the asking price, in general over here ,trying to knock down is a risky business
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Old 04.08.2020, 10:34
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Re: Bank Valuation of Property

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Where did you find your valuer? I know HEV do valuations but CHF 350 for a valuation you fill in online is quite steep
Ask your bank, ask an independent estate agent, google. Not hard. I misremember the name, but there's a specific qualification for a valuer, which not all estate agents hold, so check if they have it before proceeding.

The first one we had done was a lot more than that, but was for a quite thorough survey on an individual house, with, for some reason, official notarised copies of the report, which ran to 50 pages or so. Second was for an apartment we'd owned for ten years and was done by the estate agent who sold it to us, so was very much cheaper, but still more than the figure you quote.
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Old 05.08.2020, 15:51
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Re: Bank Valuation of Property

There are essentially 2 valuations. Market valuation and the bank's who look at what they will get for a fast sale in the event of a default. This is usually 20% below market value.

The bank will often use a company such as Wuest Partner for a valuation. When we buy or sell we also use them so the bank has less wriggle room when negotiating how much they will lend.

It's also a way for the bank to make more money. They will lend 80% of their valuation at a very good rate, and give a second mortgage for the difference between their valuation and the 80% of market price, at a higher rate. Currently 2.5% with Raiffeisen I believe. The good thing is if property values increase they will usually convert the second mortgage into a more favorable one.
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Old 05.08.2020, 16:34
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Re: Bank Valuation of Property

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I misremember the name, but there's a specific qualification for a valuer, which not all estate agents hold, so check if they have it before proceeding.
They're called Immobilienbewerter mit eidgenŲssischem Fachausweis.
It cost around 15 grand to get the certification, and that's after having successfully completed an appropriate apprenticeship and/or obtained a uni degree.



In some Cantons, the Gemeinde (Baukommission) can do valuations or recommend somebody. In smaller towns, architects can also carry out valuations, although they won't necessarily have that professional qualifications. Nevertheless, I've found them to be very thorough and the valuation included a survey.
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Old 07.08.2020, 11:23
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Re: Bank Valuation of Property

I have related question to this. What implications has higher or lower value of Schuldbrief ? It is not directly related to valuation or mortgage amount, so I wonder what is the difference between having lower or higher amount.
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Old 07.08.2020, 13:37
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Re: Bank Valuation of Property

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I have related question to this. What implications has higher or lower value of Schuldbrief ? It is not directly related to valuation or mortgage amount, so I wonder what is the difference between having lower or higher amount.
Normally a Schuldbrief will at least cover the amount of the mortgage.
You can have more than one Schuldbrief just like you can have multiple mortgages. You can use multiple Schuldbriefe to secure a single mortgages. Using a single Schuldbrief to secure multiple mortgages is only possible if the mortgages are all from the same provider. Having multiple Schuldbriefe over a smaller amounts can give you flexibility.
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Old 07.08.2020, 19:55
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Re: Bank Valuation of Property

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I have related question to this. What implications has higher or lower value of Schuldbrief ? It is not directly related to valuation or mortgage amount, so I wonder what is the difference between having lower or higher amount.
Schuldbrief's are very expensive with legal fees, so best to set it up for the full purchase price even through a smaller sum is being borrowed. When you come to sell this is good for the buyer who needs a higher mortgage.

If you have multiple mortgages with different banks the rates will always be much higher as they are 1st, 2nd, 3rd & 4th charges on the property the first one gets first pick from the sale proceeds with a forced sale.
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