Advice on Mortgage Valuation

SallyKate888

Thanks for the advice poppysocks - this forum really is fab, although I am becoming slightly obsessive... ha ha!!!

The seller has not got some bloke going round to cost up the work, so hopeful they will knock something off the price..!!

Hope you get yourself sorted too!!

JayZed

SallyKate, please don't rely just on the quote from the guy the EA and/or vendor are sending round... I would recommend that you get at least two quotes yourself.

Richard_Webster

This practice of having a valuer downvalue the property with the desired mortgage valuation once the work was done whihc is then ignored by the lender was a common feature of mortgage lending until recently. Lenders routinely ignored their valuer's recommendations because they were so anxious to lend the money.

OP could well try to get a price reduction based on the estimates (but not just those provided by EA). She will need to watch it because depending on the LTV ratio of her mortgage, the lender might actually reduce the offer is the price is reduced! Sometimes they don't mind so much if the same result is achieved by an allowance - so the Transfer Deed shows the higher price (and you pay SDLT on it if price over £175K) but you only actually pay the lower figure. Whatever way a deal is done your solicitor will normally have a duty to tell the lender about the "real" price so you need to check this aspect through properly with your lender now.

SallyKate888

I apologise - I am confused. My plan was to get the property price reduced in line with the lower valuation, advise lender, and then amend my mortgage without any change to my % deposit. (I have put 20% down), so if anything I would assume lender would be fine with this - would only be lending a max of 3k less?

OR

Vendor to put right works on property / do recomended checks as per valuation report - which would then mean property should 'theoretically' value up to 95k - again as per valuation report.

We plan on getting estimates of our own to compare versus EA / vendors.

Bit confused re last post? Apologies Richdard - could you reiterate?

sarah77

SallyKate888 wrote: »

Hi All,

Just wondered if anyone could give me some advice on my current situation. I am rather confused !!

Just had mortgage offer through today for the same price as I offered for the property (100k). Anyway after looking through the offer letter and mortgage valuation report, have noted that the surveyor recommends that 3k be held back for remedial works, and actually values the property 3k LOWER than my offer of 100k, in its 'current condition'. Despite this it seems the lender is still prepared to lend us the money and there is a specific term in the offer, that confirms they will not be holding back any of the funds, but that we should get estimates for the work and get these carried out. I have also had this confirmed by my broker. Is this normal?

I have been back to estate agents as obviously as a buyer I don't want to be paying through the nose for the property, and have asked for a 3k reduction on the price. Is this reasonable? I think so, but would welcome opinions.

Also, I was keen to get my solicitor sorted to get searches going etc, but not sure how safe it is to do this until price is confirmed etc...! Don't want to waste cash!


Any advise much appreciated!

Hi,
Our mortgage offer with Abbey is quite similar. The valuation is actually the same amount as we are paying for the house. The valuation says there is a reccommended retention of £1500 (as a condition of the mortgage we need to treat the wood worm in the gagrage, get a new garage door and get the electrics checked) The 1500 is an estimated price that this will cost but it suggests we get our own quotes incase it is more than this. However in the terms and conditions section of the mortgage it says they will not be withholding any of the loan amount and will not ask for proof/receipts of this work being done. IMO It looks like an advisory really.

SallyKate888

Yeah that's how I've took it Sarah - are you looking to reduce your offer with the Vendor?

JayZed

SallyKate, I'm also a bit confused by Richard's post. However, regardless of that, I think you're looking at this the wrong way. You shouldn't be looking to reduce your offer by the 3K that's being held back in the valuation: you should be looking for a reduction in line with the cost of the remedial works that you need to make - that's why you need to get your own independent quotes.

It may be that the remedial works will only cost you a few hundred quid, in which case I wouldn't worry about it. On the other hand, if you find that it's going to cost you £10K to repair the roof, then you're probably going to want to knock some or all of that off the price.

sarah77

SallyKate888 wrote: »

Yeah that's how I've took it Sarah - are you looking to reduce your offer with the Vendor?

No we arent going to change our offer. Its been a long process just getting our mortgage sorted (since beginning of Jan) and so far the vendor has been quite patient. Last week our solicitor got a letter from vendors solicitor saying he's had a higher cash offer and if we dont complete within 2 weeks hes going with the other offer. I know it is likely the vendor is just trying to hurry us along but i love this house and dont want to rock the boat in anyway. Plus most of this work we knew already needed doing...if not more!

SallyKate888

Well that's what I'm tempted to do to be honest... we knew work needed doing too and will, but can't get away from the fact that I feel like I'm being stung out of 3k! Incidentally, in exactly the same boat as my Mortgage is with Abbey too - was a nightmare getting it!

Good luck!!

sarah77

SallyKate888 wrote: »

Well that's what I'm tempted to do to be honest... we knew work needed doing too and will, but can't get away from the fact that I feel like I'm being stung out of 3k! Incidentally, in exactly the same boat as my Mortgage is with Abbey too - was a nightmare getting it!

Good luck!!

Yes...Abbey mortgage was a nightmare, im glad its now sorted. Ive never known stress like it! I guess its a more difficult decision for you to make as your valuation is lower than the offer whereas mine is the same amount and they give at separate slightly higher valuation based on after the work being done. All the best to you too!