This writer said that the bank officer indicated that the valuer will value the property at a higher price to get a bigger loan.
http://www.straitstimes.com/STForum/OnlineStory/STIStory_519799.html
My comment
The buyer should avoid paying a high price for the property as this means a higher monthly repayment over many years. Pay a price that is within your earning capacity (i.e. not more than 5 years of your family income). This is explained in my book, Practical Guide on Financial Planning.
All this is symptomatic of ultra easy liquidity, low interest rates and greed. Greed of sellers, greed of buyers, greed of agents to get large commissions, greed of bank loans officers to get large commissions too, and greed of valuers to just say what banks want to hear and to continue to get banks' business.
ReplyDeleteSubprime borrowers, subprime lenders, subprime insurers, subprime securitisers, Bear Stearns, Northern Rock, Lehman Brothers, AIG, Citibank, RBS, Lloyds, Icelanders, Irish, Americans, British, Greeks, Portuguese, Spanish, Italians, Chinese, all thought they deserve the $$$$ and that the good times will continue forever.
The truth will come to haunt some of us one day sooner than we think, and will set some of us free (when some take flight from the tops of HDB flats).
The banks and the central banks are the root cause: allowing cheap interest rates.
ReplyDeleteLook at Aussie land, they have even upped the interest rates and what happened? stable property prices but yet ripples from foreigners buying.. they cannot raise the rates again or else their exports will get harmed. So the next best thing, legislation:
We adopt so many ideas and systems from other countries but when this is concerned, its " wait and see" how others deal with it. I find this "puzzling" Do we not have the brains to work out these problems?
Puzzling indeed!
... not more than 5 years of your family income). I don't know where to get $150,000 HDB Flat. *shake head*
ReplyDeleteDon't need to talk so much,
ReplyDelete"So just last week, the property agent, together with HER BANKER and the banker's valuer..."
Multiple other bank valuations came back at 530K, how come this one is so special...
The buyer is a fool.
I started to suspect the integrity of some valuers and the accuracy of the valuation system when I was looking for a jumbo flat three months ago.
ReplyDeleteOne unit in Marsiling was very well kept and with very nice decor but got only an average maintenance rating while another unit in Woodlands was in terrible condition with the toilet door even patched up with scotch tape and the whole place stinks got an above average maintenance rating. This led me to think that the valuer did not even visit the place but just did paper servicing. How else can a valuer not notice what a layman can see? All these regulations are of no use if the people put in charge of it are just wayang and doing it for the sake of money. No wonder it is said that money is the root of all evil.