Dear sifus,

Is that possible to ask bank to perform valuation and show valuation report before I accept the Loan Offer Letter?

I'm buying a subsale home priced about Rm550K. Banker claims can get me 90% loan based on my profile and property value.

I afraid the margin may get cut off to 85% or 80% after I accept the Loan Offer and after I sign the S & P with the seller. If that going to happen It will not be possible for me to raise the difference which may go up to 50K.

I'm trying to avoid the situation where some of the forummers have gone through in buying subsale property where Margin of Finance got chopped off upon release of Valuation Report and after accepting the Offer Letter.

This is my first property.

Currently not servicing any loan.

What would be the best approach to avoid the foreseen problem?

Please advise..


P/s: I have placed 3% Earnest deposit with the Agency. Applied loan with the agent's friend. Pending outcome of the results. S&P expected to be signed 2 weeks from now.

Yes I did. Full refund of Earnest deposit if unable to get 90% loan or Valuation fails to meet asking price.

Landed home.

The point of discussion is this:

Even if I get 90% loan Offer Letter it is not a guarantee. Offer Letter is always subject to Valuation Report.

This is the tricky part where Valuation Report only expected to be out 3-4 weeks from the day where I have accepted the Offer Letter and sign SPA.

If Valuation Report undervalueved thn my 3% deposit and lawyer fees at stake

What you mean by Loan Runner?

Haven't you heard of cases where Margin of Loan got reduced after Valuation Report is out? If you haven't thn here it is:

https://forum.lowyat.net/index.php?showtopic=2814723&hl=

It can happen for subsale cases.

Offer Letter is given based on the information that you have conveyed to the banker, likewise the banker to valuer. They give you the OFFER LETTER based on UNVERIFIED prelim info.

If not by you, thn your banker (in order to get the sale done) may exaggerate the info such us extensively revonated, kitchen extended, car poach extended and bla bla bla.. No one comes to see to verify the info before giving you the OFFER LETTER.

After we accept the OFFER LETTER the real processing begins. Panel valuer will be sent to asses the property wether it is worth the loan amount or no. When the report comes Margin of Finance may go down compared to the initial offer which was printed in the Offer Letter. Say they cut 10% of initial offer (example RM50K) do you think all buyers will have that much of stand by cash to pump in? So subsale buyers please be aware of this!

Why valuation?
So that the bank can offload the prop at auction without loosing money when customer default the loan. If the bank unable to offload the prop, LETTER OF DEMAND will be issued to the VALUATION FIRM to pay the losses incurred cause the prop seems to be tak laku kat market having reported by the Valeuer that the value is so and so..

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