Interested to get a condo, selling price RM 400k
However bank value it at RM 360k only.( from 3 different bank)

It is normal?

why don't ask the seller to lower the price to 360k then?

what bank that u have check the market value with u? actually im from hsbc. if u not mind i can help u to process =)

Thats normal I guess, in fact I recently had the same case.

call a few valuers... ask your loan officer for a list of valuers and give a few of them a call. they can give you an indicative value by phone. from experience, some of them have lost touch with the market and give absurd values. if you call a few, hopefully you get one that matches your buy price.

Have try but he refuse

direct purchase or via agent....
if direct - kinda hard... try to get frm banker outside the area...
ask them to assist ya...
if agent, wth is he/she doing...
they shld know some valuer that can offer tis price and often a certain bank...
@ present, most strategic location bank value cant catch up...

I have try hong leong, ocbc.

My agent doesn't seem to know, so called Senior realtor... sigh.. anyway good luck to TS (btw in my case, I'm not buying but selling)

wow....u still wanna buy even though u know it is 10% above market price

maybe its an early sign that banks tighten credit facility for subsale properties....unless bought from developer,subsale market price quite tricky coz maybe there is an element of mark-up price etc etc...

Question is, it is normal for bank to value the property below market rates?
I have see some other unit in the same place selling more expensive than the one i want

from experience, this is very common... these valuers just follow their stupid procedures that most times do not reflect market values... especially for areas that do not have many transactions...

oh ic.

It is very common nowadays. Most of the bank value cant catch up with the market value.

Yeah, pretty normal...
some bank oni have several panel valuers...
if those valuer are frm outside... how can they match up asking price...

So true, that's y, u have to depend on agent to rekomen...
wat's the point of being an agent if they cant advice seller...
nor assist buyer in seeking "prefered" valuer and banker as well as lawyer (best discount )
takken take commission buta nia...
e.g. in Setia Alam, chk personally wif some banker, 1st or 2nd request normally kena reject...
then bank will source for oth panel... and finally agree to match asking price...
but for most agent, confirm they know which valuer and bank panel to use...
btw, bankers are usually frm PJ/KL branch (not Klang or Setia Alam branch)...
there's always some loose strings out thr to make it possible (Msia boleh mah)...

Yes, the agent will hv lobang. In SA, i think cimb can offer highest value among all banks.

So TS u may try to contact cimb bank too.

Valuers don't understand property market, as simple as that

Yeap hear CIMB offer higher value as well.

Anyway there was 1 mortgage broker say that ocbc can match the asking price but another loan officer from ocbc say cant. Headache.

i think there's a general formula in finance that's used to value property. It is good to do our own estimation

I think is like this (simplified version) :

property value = operating cash flow (one year) (a)/ capitalization rate (b)

(a) operatin cash flow = rental - operating expenses (i.e: maintenance fees paid to management office + maintenance cost of the property like repairing works on the condo/house)

(b) capitlization rate can be your expected return.

Example 1:

condo can be rented out RM2K a month, maintenance fee: RM200 a month, miscellaneous cost (quit rent/insurance/repair works) on average RM100 per month.

you want 5% return

property value = (2000 - 300) * 12 / 0.05 = RM340K

if you buy the property above RM340K, your return is lower than 5% and vice versa.

Rearrange the formula to find out the return.

Example 2:

property cost: 400K
rental - operating expenses = 1500

Return: 1500 * 12/ 400000 = 4.5% per annum.

Of course can add "capital appreciation to the numerator" but this part is not certain/ until realised (sold your property) only is fair to take into consideration.

---

Added on January 19, 2011, 11:26 amI also got a ridiculous offer for a property.

wanna sell 470K, bank value 360K only. i just gave up

This post has been edited by godutch: Jan 19 2011, 11:27 AM