Bank valuation lower than flat price - what can a buyer do

When financing the purchase of a property with a mortgage, the bank carries out its own valuation of the flat to determine its market value. However, it happens that the amount indicated in the appraisal is lower than the price agreed with the seller.

In practice, those planning to buying a flat in Gdańsk often wonder what to do in such a situation and whether a transaction is still possible. It is then worth consulting specialists, such as the estate agency, which helps to analyse the value of a property and safely carry out the purchase process.

Why a bank's valuation may be lower than price of housing?

Mortgage lending banks rely on the the market value of the property, which is determined by the valuer preparing the appraisal report. Such an appraisal is based on an analysis of the property market and a comparison of similar dwellings sold in the location, and may therefore differ from the price agreed between buyer and seller.

Most common reasons for lower valuation:

• Dynamic price growth in the property market
• Limited number of comparable transactions in the area
• Technical condition of the dwelling or building
• Standard of finishing of the premises and its equipment
• Location, floor and building parameters

Therefore, even with an attractive offer the purchase of a flat in Gdańsk the bank may consider that the actual market value of the premises is lower than the price agreed in the sales contract.

What does a lower valuation mean for a mortgage?

If the bank values the dwelling lower than the purchase price, the mortgage will be calculated based on the lower market value of the property indicated in the appraisal report. In practice, this means that the buyer has to cover the difference between the price of the flat and the bank's appraisal with his own funds or increase his own contribution.

Why does the bank take its valuation into account?

The bank secures the loan with a mortgage on the property, so it is crucial for the bank to the real market value of the dwelling. If this value is lower than the price agreed in the sales contract, the financial institution may reduce the amount of financing to reduce the credit risk.

Example:

• Flat price: PLN 700,000
• Bank valuation: PLN 650,000
• Credit calculated from: PLN 650,000

This means that the buyer has to cover the difference between the transaction price and the bank valuation of the property. This situation can also arise during the purchase of a flat, particularly in a dynamic property market.

What can a buyer do in such a situation?

A lower bank valuation does not necessarily mean the end of the deal. There are several solutions to continue the process the purchase of real estate.

The most commonly used options:

1. Payment of the shortfall from own resources
2. Renegotiating the price of a flat with the seller
3. Submission of a credit application to another bank
4. Re-examination of property valuation

In many cases it can be helpful to estate agency, which supports the buyer in negotiations and in analysing the value of the flat.

Possible solutions with lower bank valuation

A lower valuation of the property by the bank does not necessarily mean that the transaction for the purchase of the flat will not go through. In many cases, there are several solutions to adjust the financing terms or change the way the entire transaction is carried out.

Solution	What it is	When to consider	Advantages	Disadvantages
Own contribution	the buyer pays the difference between the bank's valuation and the price of the flat	where the purchaser has additional funds	rapid completion of the transaction	greater own contribution
Price negotiation	attempt to reduce the price of the property with the seller	when the seller is open to negotiation	reducing purchase costs	requires the seller's consent
Valuation at another bank	applying for a loan from another financial institution	when there is a chance for a different interpretation of the market value	possible higher property valuation	extension of the credit process
Re-examination of the operative	verification of the appraisal report by the bank or the valuer	where the valuation may contain outdated data	opportunity for a valuation adjustment	not always an effective solution

In practice, the choice of the best solution depends on the buyer's financial situation, the amount of the contribution and the flexibility of the seller.

How do you avoid the problem of valuing your home?

Before deciding to buy, it is worth carefully analysing the market value of the property and the current situation on the local housing market. This allows you to better assess whether the offer price corresponds to the real value of the property and whether the bank valuation will not be significantly lower.

Why should you consult a specialist about your purchase?

The assistance of real estate professionals makes it possible to compare the prices of similar flats, assess the standard of finish and check the actual value of the property. Therefore, when planning buying a flat in Gdańsk many people use professional support real estate offices, which helps to carry out the entire transaction safely.

FAQ - Frequently asked questions

1. what does it mean when the bank's valuation is lower than the price of the flat?

This means that the bank has assessed the market value of the property to be lower than the price agreed in the sales contract. In such a situation, the mortgage loan is calculated on the lower amount indicated in the appraisal.

2. is it possible to buy a flat despite the bank's lower valuation?

Yes, it is still possible to buy a flat, but the buyer has to cover the difference between the price and the valuation with his own funds. Sometimes the solution is also to renegotiate the price with the seller.

3. can another bank value the flat higher?

Yes, because banks can use different valuers and methods to analyse the property market. Therefore, it happens that the same property receives a different valuation in a different bank.

4. can the bank's valuation be appealed?

In some cases, it is possible to request a re-examination of the appraisal report. However, this requires the indication of additional market data or arguments concerning the value of the dwelling.

5. can the estate agency help in such a situation?

Yes, experienced intermediaries can help assess the real value of a flat and advise on the most advantageous solution for the buyer. They can also support the negotiation of the price or the market analysis before finalising the transaction.