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From: Anonymous
Dear IP Gurus
I am looking at purchasing an IP in Brisbane. The seller's price is $177k. I thought that this was reasonable as it was comparable to other similar properties in the area (3 bed lowset duplex in Chermside).
The bank I am looking at to finance the loan did their own valuation of the property as part of their loan approval process.
They came up with a value of $160k, some 10% less than the selling price. This was somewhat unexpected.
Some one told me that the banks tend to "undervalue" a property as part of lowering the risk.
Do my more learned colleagues in the forum agree that the banks do indeed under value a property? If so, what is an acceptable margin (in this case 10%) between the purchase price and the bank's valuation?
Would anyone suggest I get another opinion on the valuation of the property?
Please help - "cold feet" is beginning to set in on this one.
Dear IP Gurus
I am looking at purchasing an IP in Brisbane. The seller's price is $177k. I thought that this was reasonable as it was comparable to other similar properties in the area (3 bed lowset duplex in Chermside).
The bank I am looking at to finance the loan did their own valuation of the property as part of their loan approval process.
They came up with a value of $160k, some 10% less than the selling price. This was somewhat unexpected.
Some one told me that the banks tend to "undervalue" a property as part of lowering the risk.
Do my more learned colleagues in the forum agree that the banks do indeed under value a property? If so, what is an acceptable margin (in this case 10%) between the purchase price and the bank's valuation?
Would anyone suggest I get another opinion on the valuation of the property?
Please help - "cold feet" is beginning to set in on this one.
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