A bank's valuation is a reflection of the market value
It is important to understand that a bank’s valuation of a property is usually a reflection of its market value but in some cases, the two figures may not match.
In all cases for the mortgage binding paperwork to be issued an official valuation needs to be undertaken by a regulated valuation company (usually nominated by the lender). This is to ensure the property is worth what the buyer is paying.
In some cases, the valuation will be under the agreed purchase price. In such an instance, the bank will agree to lend (depending on its agreed loan to value - usually a maximum of 70% for non-residents) the lower figure of the purchase price and the valuation.
For example, if you agree to a purchase price of €300,000 and the bank values the property at €280,000, then the 70% LTV mortgage granted will be on the €280,000 figure.
If the bank values the property above the purchase price, this will usually not be an issue, however, the LTV will be granted on the purchase price, not the higher valuation figure.