New condos richmond hill . The risk of overbidding for a Toronto house is too high. A four-bedroom two-car detached house with Major Mackenzie in Bathurst in Wangshi was quoted for 1.49 million yuan, which attracted 56 offer, and finally sold for 2.33 million yuan, overbidding by 56%.
The market once again reported shocking transaction cases. An old house in the multi-city Don Mills community, asking for 990000, was sold six days after it was listed on the market. The final transaction price was as high as 1958 thousand, almost double the bid price!
And the matter of robbing Offer is no longer limited to independent houses. Starting in 2017, it seems that you have to rob offer for whatever type of house you buy in Toronto.
In February, an apartment in Sheppard and Don Mills in North York was just over 670 square feet, with a bedroom plus a study. The owner asked for 360000. Finally, 37 offer, were received. Seven days after listing, the transaction price was 476000, which was 116000 higher than the asking price.
Some bankers engaged in the mortgage business said that buyers may face unexpected problems after they grab the house by bidding. Recently, there have been many cases in which the valuation of the loan applicant’s house by the bank valuer is lower than the transaction price to varying degrees.
On the other hand, the banks granted lower loans at the lower value assessed, causing buyers to get into trouble. The amount of loans actually approved is much lower than expected. In order to make up for the price difference, some buyers need to try to apply for a second loan with an annual interest rate of more than 10%.
Buyers use their houses as collateral to apply for loans from banks. In order to protect their own interests, banks will independently evaluate the value of the collateral, rather than relying on the transaction price of the house to approve the amount of the loan. In most cases, there is not much difference between the valuation of the bank and the transaction price of the buyer, but the difference is becoming more and more obvious in the case of the hot housing market and the sharp price increase competition of the buyer.
Ms Tang, Senior loan Officer, explained from the technical level that between the transaction price and the bank valuation, the bank would take the lower value as the base and approve the loan on a pro rata basis. If the valuer appointed by the bank cannot estimate the value of the contract as high as the transaction price, the bank will approve the loan at its own lower valuation. This means that buyers are unable to obtain loans with a larger amount calculated at the transaction price, and the shortfall has to be made up by increasing the down payment.
Ms. Deng said that according to the procedure, after signing a contract to buy a house, the buyer should provide the purchase contract to the bank as soon as possible before the bank will send a valuer to value the traded property.
But now the market competition is fierce, when buying a house, it is impossible to add a “condition” clause to protect the buyer in the contract. (conditional clause), signed an irreversible “dead contract” (firm deal).
Buyers usually pay a deposit to the seller before the bank property valuation results are released, so if the bank valuation is much lower than the transaction price, if the buyer does not find a way to increase the down payment to make up the difference, he will be unable to hand over the house. the embarrassment of not getting the deposit back.
Ms. Deng particularly stressed that in addition to preparing an adequate down payment, banks often require borrowers to deposit in their accounts a deposit equivalent to 12 months of principal and interest plus one year of government rent before lending, as well as fees including land transfer tax and legal fees.
Therefore, the amount of money that the bank requires the buyer to deposit in the account before the transfer, depending on the house price, is often 500 to 100,000 yuan more than the simple down payment.
The first is to challenge the bank’s valuation results, requiring the bank to send another valuer to reassess. But the difficulty is that banks will agree to a buyer’s request for a revaluation only if they think it is justified and approved by (underwriter), the loan approver. The bank hires a licensed professional appraiser to make an independent valuation, and the second valuation is not necessarily higher than that of the first time. If the valuation is lower, the buyer is making things worse.
The second approach is to ask the bank to increase the amount of loans and increase the proportion of loans, as long as the income of the borrower must meet the requirements of the bank. At present, house prices are high, and many borrowers use their loan eligibility to the limit when they submit their applications, so it is not easy for banks to increase the loan quota.
The third approach is the most helpless, that is, borrowers have to raise their own funds to increase the proportion of down payment to fill the gap caused by the decline in the total amount of bank loans. If the valuation of the bank is significantly lower than the transaction price of the house, the funding gap will also be large enough to get the buyer into trouble.
