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Topic : Approaches to Valuation in M&A
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Valuation: What matters?

 

Bank Valuations vs Valuations by owner.

Created by : Pravin Patil, Associate, Kotak Mahindra  | 08 19 2008 23:15:46 +0000
Industry : Equity Research/AnalyticsFunctional Area : Valuation(Corporate Finance)
Keywords : Bank Valuations Owner
Activity:  252 views;  last activity : 07 06 2010 20:18:09 +0000
Is there really any advantage in having my own valuations done as the banks Valuations are generally considered conservative? Seeing properties that i like and according to price and monthly payments I can afford, then the agent mentions a "bank value" which is much lower than the asking price?? I think this means that the bank will only lend me that amount for the property and if i can't negotiate down to that I will have to stump up the difference on top of the deposit. Is this normal?
  
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Valuations by owner. Vs Bank Valuations
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I think a owner should go for his own valuation. I meet the valuer on site and have a folder prepared for him which includes comparable sales details, features of my property, the title, planning certificate and a location map on which I highlight all relevant local facilities such as shopping centers, schools, transport, child care facilities, sporting facilities, parks etc. When it is completed I tell the valuer which bank I want the value assigned to. This way bank will accept my valuation and if one is not accepting i can approach other.
By Pravin Patil, Associate, Kotak Mahindra  | 08 19 2008 23:15:46 +0000
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Different banks may have different valuations for the same property, I don't think bank influence the Valuer in any way. You can trust bank valuation as you don't have a middleman involved in between. because the question is how much you can trust a valuer??

By Gaurav Chhabra, Sr. Associate, HDFC Bank  | 08 19 2008 23:16:49 +0000
Argue for "Valuations by owner."
Argue for "Bank Valuations"
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