Offer to purchase question

[Toxxyc]

Yes, but my question is will all the banks send people to come take a look? Because it's short notice and annoying.

 

[zerocool2009]

Yes, but my question is will all the banks send people to come take a look? Because it's short notice and annoying.

I would assume so. Its the process. The bank wont lend money if it aint worth it

Its part of buying a house/property.

If you buy cash, then NO.

Hang in ....

 

[RazorCPT]

Yes, but my question is will all the banks send people to come take a look? Because it's short notice and annoying.

When I bought off plan the developer sent the request for loan to all banks - all banks sent offers/quotes, the ones that I was interested in (in my case Absa and FNB) I advised that I wanted a better offer and then only did the banks send valuators. The other banks I didnt respond to never send valuators.

 

[newby_investor]

Yes, but my question is will all the banks send people to come take a look? Because it's short notice and annoying.

They may make you an offer of an interest rate then only send someone around once you've accepted their offer, but before putting together all the documents for signature.

The idea basically is to make sure that you're not borrowing R2M to buy a house that's actually only worth R1M and going to fall apart anyway. Since the house is the security for the loan, the bank will want to verify things.

When they do send someone around though depends on the bank though - they know you're applying to various banks so they will only want to spend the money if there's a reasonable expectation that you'll actually take their loan offer.

 

[Toxxyc]

OK so my above question isn't valid anymore. I just got a final quote from Absa. Prime - 0.25%, 100% loan, no deposit necessary. FNB isn't interested in a 100% loan, and neither is Std Bank.

Absa gave me an insurance valuation of the place. I want to know how that differs from the house's actual value? Because I'm buying the house at a certain amount, but Absa sent me a replacement/insurance value number that's almost double that.

 

[Toxxyc]

They may make you an offer of an interest rate then only send someone around once you've accepted their offer, but before putting together all the documents for signature.

Absa did it the other way around. They sent me prelim paperwork when the originator applied on my behalf. That paperwork stipulated a 100% loan, at Prime + 0.5% interest. After that they sent a valuation agent (without me accepting or signing anything from them), who checked out the place. After that (without me doing anything) they sent me a final quote, stipulated at 100% loan, at Prime - 0.25% interest.

That's what's getting me. Is the place worth so much more that they see less risk in the purchase, so they lowered the interest rate for me? It ties in with my question in Post #1,655 above.

 

[PhireSide]

OK so my above question isn't valid anymore. I just got a final quote from Absa. Prime - 0.25%, 100% loan, no deposit necessary. FNB isn't interested in a 100% loan, and neither is Std Bank.

Absa gave me an insurance valuation of the place. I want to know how that differs from the house's actual value? Because I'm buying the house at a certain amount, but Absa sent me a replacement/insurance value number that's almost double that.

I got told that the normal insurance rate is R16'000 per sqm for an average home with average fittings and fixtures.

Not sure if perhaps they work on the same amount? As this is apparently the cost to have the plot cleared and house rebuilt to modern standards should something like a fire happen.

This was what an 'expert' in the industry told me so take what I said with a huge pinch of salt

 

[zerocool2009]

Insurance aint that expensive. That should be higher than the current value for sure!

Rates and Taxes should be as little as possible!

 

[minkukel]

Bought my house 15 years ago for R900k.Absa valued it then at 1.1mil. My insurance on the house covers R2.6mil now.

 

[zerocool2009]

Bought my house 15 years ago for R900k.Absa valued it then at 1.1mil. My insurance on the house covers R2.6mil now.

Whats the value on your rates and taxes?

 

[Napalm2880]

Been getting some quotes for building insurance on a place we've just put in an offer. Purchase price is R2.6m and Outsurance want R875 per month. Momentum want R835 per month. Those figures sound ludicrous to me. Is this normal for building insurance which I'd imagine is relatively low risk?

 

[Napalm2880]

Absa did it the other way around. They sent me prelim paperwork when the originator applied on my behalf. That paperwork stipulated a 100% loan, at Prime + 0.5% interest. After that they sent a valuation agent (without me accepting or signing anything from them), who checked out the place. After that (without me doing anything) they sent me a final quote, stipulated at 100% loan, at Prime - 0.25% interest.

That's what's getting me. Is the place worth so much more that they see less risk in the purchase, so they lowered the interest rate for me? It ties in with my question in Post #1,655 above.

First interest rate was an estimate. I believe it then goes to the credit department where they do a more detailed analysis and give you a final grant - which is where your lower interest rate comes from. The valuation might be a factor in the decision but I don't see it as being the main reason your interest rate is lower.

 

[AchmatK]

Been getting some quotes for building insurance on a place we've just put in an offer. Purchase price is R2.6m and Outsurance want R875 per month. Momentum want R835 per month. Those figures sound ludicrous to me. Is this normal for building insurance which I'd imagine is relatively low risk?

That's a bit much. Are you sure it's not including home contents.

This is just my building cover with momentum.

Home contents is an additional R460.

 

[Napalm2880]

That's a bit much. Are you sure it's not including home contents.

This is just my building cover with momentum.

Home coburg is an additional R460. View attachment 987044

Those are the numbers I was expecting and to confirm, I was quoted on building insurance only. wtf

 

[newby_investor]

Mine came to about R320/m for my 114 m^2 house in Cape Town's Southern Suburbs. (R1.8M selling price.)

AFAIK the insurance is the estimated cost to rebuild the house in the event of fire / earthquake etc, as mentioned previously.

 

[Toxxyc]

Absa wants to insure my R2.1mil for a total of R138585 over 360 months, for a monthly payment of around R385. I feel it's a bit high. I'm getting additional quotes.

 

[minkukel]

Whats the value on your rates and taxes?

1.4mil

 

[rietrot]

Yes, but my question is will all the banks send people to come take a look? Because it's short notice and annoying.

Most valuations are done electronically through lightstone or whatever it's called. They will only send someone in exceptional circumstances and with building loans.

 

[zerocool2009]

Most valuations are done electronically through lightstone or whatever it's called. They will only send someone in exceptional circumstances and with building loans.

Fnb send almost 100% someone out, Absa and SB not alot. Its a huge risk I think. Something on paper vs actual may differ alot

 

[rietrot]

Fnb send almost 100% someone out, Absa and SB not alot. Its a huge risk I think. Something on paper vs actual may differ alot

The valuation price means nothing really. If you don't pay they will never get that on auction a few R100k out doesn't make a difference.