establishing true value of a property

Leisa#1 Posted : Thursday, 11 October 2012 12:04:52 PM

Hi, if an estate agent tells the vendor the property is worth "this much", ie what they could get for it - what is it really worth? Would the agent inflate the amount at this stage? Apparently the bank will need to value the property for my loan, so I'd like to be clear if there's likely to be any problems - eg. if agent says $200K and the bank says $170K because it needs loads of renovation. Thanks, L

Madeline Lu#2 Posted : Friday, 19 October 2012 1:24:31 PM

I find agents are generous and banks and conservative. The real value is probably somewhere in between both figures. Although, the true value of something is what someone would pay for it - pure and simple.

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Eos Property#3 Posted : Thursday, 22 November 2012 9:22:11 AM

Interesting question. The valuer is supposed to establish the value of the property based on a normal market transaction. This begs the question - if the sale is normal (not a distressed seller, sold through a real estate agent & not a marketing group, not in family sale etc) and there is negotiation on price why isn't the sale price the valuation? It does represent normal market activity.
Seems to me the banks through their valuation process wield more influence on the market than they should. And before someone tells me 'valuers are qualified' - forget it. In a previous life I have, seen first hand, discrepancies between valuations on identical properties in the same complex by the same valuation company and the same bank. The discrepancy was $60K on a purchase price of $265K. Two other valuations were on the sale price. Go figure!

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