Meet Mr. Amit who applied for a loan from a Bank. He got a sanction of Rs 30 Lakhs within 4 days. But, to his surprise later he was told that he is now eligible for loan of Rs 25 Lakhs only. The reason was low technical valuation of property. Technical valuation of property plays an important part in your application for loans with property and Home Loans. Banks have an in-house team of experts that value properties on various yardsticks and these team provides technical valuation of property being offered. Your final loan amount could increase or decrease depending upon technical valuation report. Hence, questions must have come in your mind regarding this technical valuation. To solve your queries regarding technical valuation LoanKuber has prepared a list of general FAQs regarding Technical Valuation at banks.
Q1.What are the things bank keep in mind while evaluating a property?
Ans. Banks take into account Sanction plan, completion status, age of the building, Residual life, quality of construction, Geographical location, Layout of property , Total area etc.
Q2. What factors are taken into measuring geographical location of property?
Ans. Geographical location of property would include factors like Neighborhood, marketability, connectivity, site access, proximity to amenities, is property within municipal limits or not etc. If your property is in good neighborhood with good connectivity and site access, it will get a better valuation compared to a property which is not.
Q3. Do older buildings always get a lower valuation compared to a new building in a same location?
Ans. No, It is not always the case. Valuation experts would also look into factors like how well is property maintained, quality of material used etc to get the fair market value.
Q4. What do you mean by “Layout of Property”?
Ans. Layout of property would include Total number of stories, Total actual area constructed, Entry and exit positions for property, construction type etc.
Q5. How Market value of property is calculated?
Ans. Market value is calculated by multiplying total saleable area and built up area with Rate per unit adopted by market valuation expert. Following table will elucidate our point
|Flat ( Saleable Area)||1120||10,300.00 ₹||11,536,000.00 ₹|
|Land ( Plot Area)||NA||NA||NA|
|Building ( Built up Area)||NA||NA||NA|
|Car Parking and other amenities||NA|
|Estimated total market value of Property||11,536,000.00 ₹|
Q6. What other factors would also be taken into account for valuation of property?
Ans. Some of these factors are:
- Municipal compliance.
- Commercial usage or not.
- Finish stage of property.
- Independent access.
Q7. What documents do I need to provide for Technical valuation?
Ans. You do not need to provide any documents for Technical valuation.
Q8. Who will do technical valuation of my property?
Ans. Technical valuation is done by team of technical valuation experts. They would value your property according to existing norms. Usually, all banks have in-house teams and third party agencies for this purpose.