Mortgage Valuation - Help Please!!!

d80

Hi all, first time poster, long time lurker, i'm hoping the experts here will help me out!!!

I am buying a 3 bed mid terrace property in Chester, using the Halifax as the mortgage company. They have agreed to accept a vendor gifted deposit of 10%, subject to valuation. The sellers have agreed they are happy with vendor gifted, so good all round. My offer was accepted at £157K, with purchase price at £174K (I'll cover the £400 difference).

However, I have spoken to the Halifax today, and the valuation for the property has come in at £157K - the price I agreed without the vendor gifted deposit, rather than the value including the 10%, £174K.

The property was listed at £170K, so knew I was taking a slight risk. Comparable properties in the same street have sold as follows:

3 bed semi, May 2008 - £173K. Same internal square footage, similar level of repair (needs modernisation but liveable)
3 bed end terrace, Jan 2007, £192K. Identical layout to mine, but end terrace. No idea of condition.
3 bed end terrace, Feb 2006, £77.5K. Identical layout to mine, but end terrace.

I need the vendor gifted to get the mortgage deal I wanted, and have no real options for the funds other than an unsecured loan.

What are the chances of getting the mortgage valuation amended, based upon these previous properties? Is there anything else I can do to help get the valuation amended?
The valuation company isn't linked to the estate agents in any way, so no leverage there, but would they have more chance than me when they speak to them?
I've also looked at zoopla.co.uk, and get the valuation to £177K on there.

Can anyone offer any advice? I plan to speak to the valuation company if needed, but want to make the best case possible, and get it accross in a way that will get the valuation changed.

Thanks in advance
Dan

mewbie_2

This wont be the help you are looking for, but please don't just dismiss it.

Your research has told you "3 bed end terrace, Feb 2006, £77.5K. Identical layout to mine, but end terrace"

What does that tell you? That in two years, since 2006, the house you want to buy is worth double that price? Where do you think it might be priced in another two years?

Inform yourself. Rent. Save money and watch the market go through the biggest correction in living memory.

d80

Sorry - typo - should have been £177.5K

mewbie_2

Helluva typo! So it hasn't doubled. The next part of the question is "where do you think it might be in two years". My rough guess would be 35% lower and falling. Might be 5% out either way. Approx. fifty thousand pounds.

Incisor

d80 wrote: »

... I am buying a 3 bed mid terrace property in Chester, using the Halifax as the mortgage company. They have agreed to accept a vendor gifted deposit of 10%, subject to valuation. The sellers have agreed they are happy with vendor gifted, so good all round. My offer was accepted at £157K, with purchase price at £174K (I'll cover the £400 difference).

:rolleyes: So you are putting in some cash then? You are setting up the deal so that it costs you an extra £177 in stamp duty, you are paying that and an extra £267?

However, I have spoken to the Halifax today, and the valuation for the property has come in at £157K - the price I agreed without the vendor gifted deposit, rather than the value including the 10%, £174K.

Well, you will be paying a net £157,000. It can't be worth more than that, because if it is being sold to you, you must be the highest bidder.

The property was listed at £170K, so knew I was taking a slight risk. Comparable properties in the same street have sold as follows:

3 bed semi, May 2008 - £173K. Same internal square footage, similar level of repair (needs modernisation but liveable)
3 bed end terrace, Jan 2007, £192K. Identical layout to mine, but end terrace. No idea of condition.
3 bed end terrace, Feb 2006, £77.5K. Identical layout to mine, but end terrace.

With all these gifted deposits muddying the water, who knows what any of these properties are worth? FWIW if you pull this deal off, you will be creating another misleading statistic, so don't think it doesn't happen or that the banks shouldn't take it into account.

I need the vendor gifted to get the mortgage deal I wanted, and have no real options for the funds other than an unsecured loan.

Or you need to have saved up a deposit, but that requires planning.

What are the chances of getting the mortgage valuation amended, based upon these previous properties? Is there anything else I can do to help get the valuation amended?
The valuation company isn't linked to the estate agents in any way, so no leverage there, but would they have more chance than me when they speak to them?

A valuation is how much you can argue someone into saying a property is worth? I think you are a year too late to the party, but it is similar attitudes which brought about the present situation.

I've also looked at zoopla.co.uk, and get the valuation to £177K on there.

I can screw my eyes tight and make a wish. But it doesn't always come true. Banks would use zoopla themselves and save the expense of valuers. What say you?

Can anyone offer any advice? I plan to speak to the valuation company if needed, but want to make the best case possible, and get it accross in a way that will get the valuation changed.

Just face it, until you can get a deposit of 5% together you are not going to get a look in. When you have 5% you might be able to pull a stunt to get someone to lend to you, but really, you need 10%.

And get your head around the concept of negative equity and how badly someone in your position could be hurt financially if house prices drop by even 1%. By refusing you the banks are doing you a favour. Be grateful.

silvercar

Halifax have valued it at 157, you are paying 157 = they are happy its worth what you are paying. In this market that is not to be sneezed at.

Any acceptance by the lender that they would accept vendor deposits is subject to the property being worth more than you are paying. In this cse it is only worth what you are paying. IMHO its generous of a lender to accept vendor deposits in principle, the fact that this property is not worth more than the agreed price just goes to show its real money that counts.

d80

Thanks for all the replies, but can anyone give me any advice on the original problem - what's best to do with the valuation company to get them to reconsider? I genuinely believe the valuation is too low.

Incisor

d80 wrote: »

Thanks for all the replies, but can anyone give me any advice on the original problem - what's best to do with the valuation company to get them to reconsider? I genuinely believe the valuation is too low.

You are mistaken. You are the highest bidder. It is worth no more than the highest bidder will pay.

If you wanted a higher valuation, you should have offered more. But you would still be no more able to afford the place. So the valuation is not your problem. Your problem is that you do not have sufficient savings to reduce the Loan to Value ratio below the threshold that the bank require. You are offering a paltry £440 of which you are prepared to waste £174 on increased stamp duty. Even so, you appear to have more money than sense. Sorry to be so blunt, but it just does not make any sense whatsoever for you to do anything other than start to save for a decent deposit.

d80

again, appreciate the advice, but does not help me whatsoever!!!

Incisor

d80 wrote: »

again, appreciate the advice, but does not help me whatsoever!!!

Trust me, if you get what you think is help today, in the years to come you will remember me and wish you had listened.

dunstonh

d80 wrote: »

again, appreciate the advice, but does not help me whatsoever!!!

you may not see it as help but its how things are at the moment.

House prices do not have a price ticket on them. They are valued by opinion and what people are willing to pay. Currently prices are in decline. In a falling market valuations do tend to be more on the cautious side but not by much. In a rising market there will be some benefit the other way.

Most people over price their houses. It appears to be the case here with you.