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Bank valuation

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  • 27-03-2020 4:03pm
    #1
    73trix
    Registered Users Posts: 1,190 ✭✭✭


    Can someone please explain to me how does this work? What happens if the bank value the house for less than the agreed price?


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    #2
    Doop
    Registered Users Posts: 1,466 ✭✭✭Doop


    Simply put.... they wont! the valuer will be made aware of the sale agreed price and as long as its in line with general market conditions they will concur with the sale agreed price.

    The purpose is for the bank to receive an independent report that what they are lending on, number one exists and is worth what is being lent.

    Dont stress - it wont be an issue!


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    #3
    Thoie
    Registered Users Posts: 6,344 ✭✭✭Thoie


    The bank valuation is mainly there to ensure that the security you're offering (the house) is worth roughly what they're lending you, and that it actually exists.

    It's to stop people borrowing half a million against a tent worth €100.


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    #4
    JohnnyChimpo
    Registered Users Posts: 1,075 ✭✭✭JohnnyChimpo


    Doop wrote: »
    Simply put.... they wont! the valuer will be made aware of the sale agreed price and as long as its in line with general market conditions they will concur with the sale agreed price.

    The purpose is for the bank to receive an independent report that what they are lending on, number one exists and is worth what is being lent.

    Dont stress - it wont be an issue!

    They might! Our friends had their fixer-upper valued down from 320k to I think 280-290k, and used that to pressure the seller into accepting the lower sale price. So can actually be beneficial.


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    #5
    73trix
    Registered Users Posts: 1,190 ✭✭✭73trix


    JohnnyChimpo wrote: »
    They might! Our friends had their fixer-upper valued down from 320k to I think 280-290k, and used that to pressure the seller into accepting the lower sale price. So can actually be beneficial.

    I heard some bank is telling staff to knock 10% off the value of houses since Corona. Just wondering if this is a further indication of an expected property price drop.


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    #6
    Samuel T. Cogley
    Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    Happened to me, not in Ireland though - on two occasions here I've been asked what to write on the form.

    If they come back and say it's worth 250K and you want to borrow 300K you'll need to come up with 50K. (Obviously excluding deposits etc for ease of example.)


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    #7
    FrankC21
    Registered Users Posts: 806 ✭✭✭FrankC21


    Let me tell You this, just don't stress, I was the same boat as you 2 months ago, hehehe, I understand how you feel, you have to book it in, the bank will give you the number of the valuation team and you will pay them out of your own pocket.

    We got ours booked and let me tell you the house wasn't even 100% complete, no water or electricity and the evaluator did the valuation not even on the day that we booked it, seems they went there to check if it's physically there, ticked the box completed, purchase price and all.


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    #8
    Claw Hammer
    Registered Users Posts: 6,163 ✭✭✭Claw Hammer


    FrankC21 wrote: »
    Let me tell You this, just don't stress, I was the same boat as you 2 months ago, hehehe, I understand how you feel, you have to book it in, the bank will give you the number of the valuation team and you will pay them out of your own pocket.

    We got ours booked and let me tell you the house wasn't even 100% complete, no water or electricity and the evaluator did the valuation not even on the day that we booked it, seems they went there to check if it's physically there, ticked the box completed, purchase price and all.

    That was then, this is now!


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    #9
    guyfawkes5
    Registered Users Posts: 291 ✭✭guyfawkes5


    73trix wrote: »
    I heard some bank is telling staff to knock 10% off the value of houses since Corona. Just wondering if this is a further indication of an expected property price drop.
    I was just talking to someone in Bank of Ireland today about this subject and he said that generally valuers will compare against sales of the same type in the same area and won't really try to forecast prices.


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    #10
    Nijmegen
    Registered Users Posts: 3,086 ✭✭✭Nijmegen


    73trix wrote: »
    I heard some bank is telling staff to knock 10% off the value of houses since Corona. Just wondering if this is a further indication of an expected property price drop.

    Lot of this "heard from..." stuff going around in the era of Coronavirus.


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    #11
    FrankC21
    Registered Users Posts: 806 ✭✭✭FrankC21


    73trix wrote: »
    I heard some bank is telling staff to knock 10% off the value of houses since Corona. Just wondering if this is a further indication of an expected property price drop.

    Is it a new build? How far are you on the process? Are you still in contact with your solicitor and mortgage advisor, it is best to ask them.


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    #12
    listermint
    Registered Users Posts: 33,697 ✭✭✭✭listermint


    Valuers will do a couple of things.

    1, read you address and look up property price register for recent sales (lets say last 2 years) note them down.

    2, review Daft and others for recent sales and recent asks, note them down.

    3, come visit the property and gauge it against 1 and 2. And they will come up with estimation. Its not an exact science and weighs alot on opinion versus what they have picked up and assumed from 1 and 2.


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    #13
    73trix
    Registered Users Posts: 1,190 ✭✭✭73trix


    FrankC21 wrote: »
    Is it a new build? How far are you on the process? Are you still in contact with your solicitor and mortgage advisor, it is best to ask them.

    We've just started bidding on second hand.


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    #14
    StoptheClocks
    Registered Users Posts: 215 ✭✭StoptheClocks


    You'll need to get the house surveyed too (unless its a new build). The valuation is a standard €150. Usually done by an estate agent. The bank will supply them to you.


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