Oct 26 2022, 02:19 PM
QUOTE(Aldo-Kirosu @ Oct 26 2022, 01:47 PM)
How to determine the market value & bank value?
For example:
Ali buy a property from developer SPA RM550K
Developer give 10% rebate net price RM 495K
Ali loan 90%, so 0% downpayment bought the house at net price RM495K
2 year later house completed, Ali take the key, monthly repayment RM2200, but the market rental only RM1500. Due to pandemic & financial difficulty. Ali want to sell the house at SPA price RM550K.
But after all the bank valuer check the property value, its only average RM400K. So If Ali want to sell the house, either he follow the valuer sell RM400K at lost 95K, or keep selling 495K (feature buyer need to folk out 135K downpayment), or keep selling at 550K price (feature buyer need to folk out RM190K downpayment).
Since this is New House, surrounding dont have a lot of new project to know the market value, only those old old like 10year old house surrounding selling like 400K, and transection history is around that also, that why he is thinking selling 550K like developer SPA price is resonable as it newly build only.
So the question:
1. Is it Bank Valuation = Market Value?
2. Is it Market Value is based on the supply and demand of 1 area, or bank valuation determine the market value?
3. If Ali ready sold his unit at 550K, and will it be new market value? and how many unit sold at market at new price only will then become a new market value?
4. How to determine Bank value vs Market value vs Developer value?
Developer value = whatever is the highest price they can sell you the unit for. They can get this very wrong too.For example:
Ali buy a property from developer SPA RM550K
Developer give 10% rebate net price RM 495K
Ali loan 90%, so 0% downpayment bought the house at net price RM495K
2 year later house completed, Ali take the key, monthly repayment RM2200, but the market rental only RM1500. Due to pandemic & financial difficulty. Ali want to sell the house at SPA price RM550K.
But after all the bank valuer check the property value, its only average RM400K. So If Ali want to sell the house, either he follow the valuer sell RM400K at lost 95K, or keep selling 495K (feature buyer need to folk out 135K downpayment), or keep selling at 550K price (feature buyer need to folk out RM190K downpayment).
Since this is New House, surrounding dont have a lot of new project to know the market value, only those old old like 10year old house surrounding selling like 400K, and transection history is around that also, that why he is thinking selling 550K like developer SPA price is resonable as it newly build only.
So the question:
1. Is it Bank Valuation = Market Value?
2. Is it Market Value is based on the supply and demand of 1 area, or bank valuation determine the market value?
3. If Ali ready sold his unit at 550K, and will it be new market value? and how many unit sold at market at new price only will then become a new market value?
4. How to determine Bank value vs Market value vs Developer value?
Bank value = depends on lending criteria at the time, it can be stricter or more lax. At the stricter end of the scale, based directly on verifiable rental transactions and sub sale in the area.
Market value = depends how clued up the buyer is but it would be based on breakeven point of verifiable rental with a premium for being fully furnished. A good buyer will haggle the seller down in these times if they sense desperation.
Caveat is that this is viewing all of them as investment property. Blue chip own stay property have different metrics as is landed.
This post has been edited by Cavatzu: Oct 26 2022, 02:20 PM
Quote
Yeah 300K (the debt) is hard to get back from defaulter (auction unit owner), bank will sue them bankruptcy, the debt will still slowly collect back via insolvency department and pay to bank is not it?
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