Are banks deliberately valuing properties low?

Spanish Property Insight Forums Spanish Property Forums Property Questions & Answers Mortgage Questions Are banks deliberately valuing properties low?

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    • #192540
      kirstynicholas
      Participant

      I am in the process of buying a property in the Marbella area and have applied for a mortgage of up to 70% of the purchase price? Friends and even my lawyer have warned that valuations are very conservative and may come up short of the agreed sale price. Is this a trend you are familiar with?

    • #192623

      We see in our firm the trend you mentioned.

    • #193066
      sofia
      Participant

      The answer seems to be yes. Please note the mortgage is not usually 70% of the purchase price, it is 70% of the appraised value. With our bank, we didn’t get to choose the firm that did the appraisal. The first house we had appraised, the house was valued less than the agreed purchase price. The second house we appraised was valued higher than the agreed purchase price. This meant 80% of the valuation actually covered the entire purchase price. In other words we got a 100% mortgage and only had to pay the additional 13% transfer tax and notary fee.

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