Calculate the cash gap when valuation differs from price
Recalculate funds using the bank-confirmed valuation and lending basis, keeping the difference separate from completion fees.
Keep price and valuation distinct
Purchase price, bank valuation and the approved loan are different figures. Confirm the bank's basis, applicable ratio and other conditions before comparing them with the agreed payment timetable.
List the difference between expected and confirmed lending as additional cash to arrange, separately from fees and reserves. Any change to transaction or funding arrangements needs checking against actual documents and professional advice.
Recalculate from the confirmed lending basis
Use a bank-confirmed ratio or an explicitly labelled assumption.
| Item | Record | Follow-up |
|---|---|---|
| Price | Agreed price and date | Check transaction documents |
| Valuation | Bank response and basis | Confirm applicable conditions |
| Loan | Expected and confirmed amounts | Calculate the difference |
| Cash | Difference, fees and availability | Add to the completion timetable |
Illustration: use a hypothetical 60% basis
At a hypothetical 60%, HK$6 million gives HK$3.6 million, while a HK$5.6 million basis gives HK$3.36 million: a HK$240,000 difference. The percentage is an arithmetic assumption, not a bank commitment or applicable limit.
Keep fees beyond the gap
- Valuation and approval are distinct
- The gap and fees are separate
- Cash availability dates are checked