The bank's indicative value is a preliminary figure quoted by a banker on a property. It is a guideline to the maximum amount of loan a bank is prepared to loan you. The final loan amount differs from individual to individual based on one's credit worthiness and other factors.
This indicative figure is not simply plucked out from the air. The banker will send basic information on the subject property to their panel of valuers who will then reply with a figure.
In Singapore valuers employ the 'Direct Comaprison Method'in the valuation of a property. A 'proper valuation' will usually involve the valuer going through recent transacted properties in the immedite vicinity or what we term as comparables and arrive at a base price. This base price forms a large part of the value. The on site inspection is to evaluate usually the state of the property and any improvements to it and constitutes a small addition or deduction from the base price.
The indicative figure given by valuers is a provided based on recent recorded transactions of the area, a similar, although less tedious approach since it is only indicative.
In a nutshell, an indicative value would be somewhat close to the 'proper valuation' figure with some minor variance.
Hope this helps.
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