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    • ja3h
    • By ja3h 7th Jul 17, 11:58 PM
    • 9Posts
    • 0Thanks
    The Bank's valuation is 20% under proposed purchase price
    • #1
    • 7th Jul 17, 11:58 PM
    The Bank's valuation is 20% under proposed purchase price 7th Jul 17 at 11:58 PM
    Ok some context, myself and a sibling are extremely fortunate to be given a lump sum from a relative as an advance on inheritance to get us on the property ladder.

    My relative has a property for sale which my partner and I want to purchase, my relative has said that instead of a lump sum they will reduce the price on the property instead. When the sale has gone through my sibling will get the lump sum gifted to them.

    The problem is that the valuation has come in at 20% lower than I expected the original sale price to be. So in effect the discounted price is actually the valuation price.

    The bank is HSBC and they're using SDL surveyors. I know that valuations are often conservative, but I think that 20% must mean that the original price my relative wanted was more than it's worth.

    It's an awkward situation because I'm extremely grateful for the gesture towards my sibling and I. But I want it to be a fair one, where we both get an equal amount.

    I'm not too sure how to approach this, perhaps inviting some estate agents to value the property. The problem I have with that is, when I was helping my mother sell her home I had 5 different valuations ranging from 375k to 475k. In the end it sold for £395k but it was on the market for months before we decided to lower the price. I suppose this is the best thing to do.
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    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 6:05 PM
    • 55,239 Posts
    • 48,490 Thanks
    I've found these properties in the same area and a similar size (995² ft).
    Originally posted by ja3h
    Property isn't valued on size alone.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Lunchbox
    • By Lunchbox 8th Jul 17, 6:39 PM
    • 145 Posts
    • 135 Thanks
    Whoops, we're borrowing £395k - £105k is our own deposit towards it.

    Yeah, the lender must not think it's worth £600k.
    Originally posted by ja3h
    If you've told them you're purchasing it for £500k they were never going to value it above that. Valuations for mortgage lenders are to confirm the property is worth the amount being lent, and they don't give a valuation over that even if it is worth more. In this case, it sounds like they've just agreed it's worth at least what you're paying, and then taken 50k off for the short lease.
    • goodwithsaving
    • By goodwithsaving 8th Jul 17, 6:50 PM
    • 627 Posts
    • 960 Thanks
    Out of curiosity because downvaluations are currently something which concerns me, where in the country are you?
    Every time you borrow money, you’re robbing your future self. –Nathan W. Morris
    • Crashy Time
    • By Crashy Time 8th Jul 17, 10:33 PM
    • 4,839 Posts
    • 2,107 Thanks
    Crashy Time
    Property isn't valued on size alone.
    Originally posted by Thrugelmir

    This is supposedly a 25% drop in asking price? 81d859348
    • Crashy Time
    • By Crashy Time 11th Jul 17, 12:45 PM
    • 4,839 Posts
    • 2,107 Thanks
    Crashy Time
    Property isn't valued on size alone.
    Originally posted by Thrugelmir

    Location probably trumps size in some cases?
    • kingstreet
    • By kingstreet 11th Jul 17, 2:46 PM
    • 31,943 Posts
    • 17,072 Thanks
    Sounds like someone trying to do a concessionary purchase/gifted equity case and the lender wasn't aware of it, or doesn't accept such cases.
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • Crashy Time
    • By Crashy Time 11th Jul 17, 9:33 PM
    • 4,839 Posts
    • 2,107 Thanks
    Crashy Time
    Or someone delusional about the value of their property?
    • Crashy Time
    • By Crashy Time 12th Jul 17, 1:01 PM
    • 4,839 Posts
    • 2,107 Thanks
    Crashy Time
    House prices are in a downward spiral, the bank has a right and duty tobe conservative in a downturn in house prices.
    Originally posted by brit1234

    Pity they didn`t feel the need to do their duty sooner, the country might not be in such a precarious position?
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