Another Valuation Too Low

Novascape

Hi All,

Hope you can help with some advice!

I have put forward an offer of 150k for a 3 bed semi and based the mortagage with the halifax on a deposit of 37.5k after a mortagage of 112.5k (giving me a LTV of 75%).

The valuation has now come back as the property only worth 120K and I think this is wrong for the area as you can't get a 2 bed flat for that price.

I really want the house and the seller will not sell for less than the 150K so my question is round the mortagage front.

Does my 37.5K still count as the deposit as the bank I think want me to put a 10% deposit down on the 120K and my extra 30K does not count for anything?

From what I understand after a brief phone call with my adviser:

30K Does not count at all to the mortagage (Bit I would put down between 120k to make up to 150K

Only the 7.5K counts as part of a deposit and I would need to make up 4.5K to get a 10% deposit down?

Help!!!

betmunch

You understand correctly.

The lender will use the lower of the purchase price or the valuation when determining the LTV of the loan they are giving you.

If you or your advisor can provide comparable sales showing the property is worth £150K then you have a very very slim chance to get the valuer to change his value, but they are notoriously stubborn!

Good luck if you try

beecher

You need to renegotiate with the vendor - paying more than 20% over valuation isn't wise. If the seller won't sell for less than £150k, then they're not going to be able to sell at all!

If you are determined to go ahead, you would only be able to get a mortgage of £108k for an LTV of 90% so would have to find the other £42k as you said.

SouthCoast

The valuation is for the benefit of the mortgage lender/taxpayer.

Novascape

Thanks doesn't really help me as the taxpayer! when they under value a property using figures from 2005 which stop me affording the mortgage!.

Who has 50K to put down as a deposit now a day's

Spoke to the valuer earlier and he stated the valuation was based on houses in the imediate area and the only ones I can find that have been sold since 2005 are terraced or a flat that is next to a pub with a 2am licence.

This does not equal a true valuation to me for a 3 bed semi!!

There must be some way to complain and get it redone.

Radiantsoul

Novascape wrote: »

Hi All,

Hope you can help with some advice!

I have put forward an offer of 150k for a 3 bed semi and based the mortagage with the halifax on a deposit of 37.5k after a mortagage of 112.5k (giving me a LTV of 75%).

The valuation has now come back as the property only worth 120K and I think this is wrong for the area as you can't get a 2 bed flat for that price.

I really want the house and the seller will not sell for less than the 150K so my question is round the mortagage front.

Does my 37.5K still count as the deposit as the bank I think want me to put a 10% deposit down on the 120K and my extra 30K does not count for anything?

From what I understand after a brief phone call with my adviser:

30K Does not count at all to the mortagage (Bit I would put down between 120k to make up to 150K

Only the 7.5K counts as part of a deposit and I would need to make up 4.5K to get a 10% deposit down?

Help!!!

How long has the property been on the market? If I were you I would lower your offer to closer to the valuation.
It is surprising that a valuation could be so wrong. You could ask a few local estate agents(not the one you are dealing with for an opinion).

Novascape

House was not on the market I am doing a private sale. But we got a estate agent friend to do a valuation which was 155K.

Spoke to her today and another one and they all have issues with the valuer in question pricing things too low. Caused them no end of problems and they all want to kill him!!

I've had to go back to the seller and ask for them to accept a lower offer which I'm expecting them to refuse. Leaving me with no choice but to pull out.

geoffky

prices are now back to 2003 levels.....you have been done a massive favour..they have stopped you OVERPAYING for a house....thank them..

Novascape

Err thanks, I've heard a lot about this paying to much for a house etc. But I have to disagree.

You would pay for what you want and this house was perfect for me, with the gardens and location that I wanted.

If this falls through I will be at a dead end and would either have to buy a flat (Doesn't help when I want a garden) or move somewhere else I don't want, which would mean moving my kid to another school. Or rent out of the 2 overpriced properties available in the area which is dead money.

You tell me where the massive favour is? when I have no other solution (and personally believe the valuation is too low)

dylansmum

Do you have to have the mortgage with the halifax? Anyone else able to value it? Or is this too much time and cost?

Did you have a full survey done? I had one on my own house with remortage purposes in mind as haven't had mine valued for eons. I wanted a yardstick; estate agents valued it about 15K more - but I was shocked with the survey report (i had thought it would be less than what the surveyor reckoned)

Estate agents' valuations are never the same as the banks' valuations, though - especailly right now. A friend of mine had three estate agents value her house in Feb - they came in at 150, 135 and 121. They went for middle one and sold last week - at 120K - all bank giving mortgage would value it at; but they suspected as much and are happy with price. Are you sure flats are selling for the price you say - not what sellers are aksing, but what they are getting?

Houses are only 'worth' what the market sets - i.e. the banks and stock market. And banks are twitchy about LTV and equity issues.

Hope you can sort it.

Novascape

I'm a bit screwed on the mortgage front! all of the banks etc that would give me the money I need all use the same surveyer and he would come back with the same amount.

Spoke to the Halifax and they said yes I could get an indepentent servey done but they would just take it back to the original person and ask him if he would like to change his figure! can't see that happening.