Re-mortgage Valuation

jrs101

Am in the process of trying to remortgage.

What is it with these valuations. How on earth can there be should a spread in valutaion prices? Am wondering now if its worth a punt at £180 quid to get one.

N1ck

if they undervalue a property can you claim the money back from your credit card company, as the lender failed in their duty to value your property at the market level?

lazysaver_2

pinkpinkfizz wrote: »

On the product Key facts document the £199 fee is listed as a booking fee and the amount set as Valuation is FREE

If we're not going ahead with them, then surely there is nothing to book and we can get our £199 back?!

I know I'm cluching at straws and my money is gone....

I think you have a case for the valuation being free. However I imagine one of the terms of the reservation fee is that if the deals falls through because of valuation, they keep the reservation fee.

That has made me think about the free valuation I am getting from Natwest...

Bernard_Coleslaw

ToMonkey wrote: »

They sent someone to do a valuation who valued my 4 bed for 130 the people that did the valuation have got a 2 bed on the corner of the street up for 154.

Having a property 'up for 154' is a big difference to 'sold for 154'. If I was purchasing right now, I'd be offering 85-90% of any sale price just as a starting position. I think lenders are taking the same view - how much would you want to pay for a repo?

uklad_2

Nothing new, i think this might be interesting reading

news.bbc.co.uk/1/hi/programmes/moneybox/7983229.stm

Homebuyers are being prevented from buying many properties because lender valuations are coming in too low, say estate agents.
Mortgage providers routinely commission surveys to ensure the price agreed reflects the property's current value.
A valuation should show what a willing buyer and seller would be prepared to pay on the day of the survey.
But in a falling market estate agents claim surveyors are undervaluing to avoid being sued by lenders.
One buyer, Chris, wanted to purchase a one bedroom flat earlier this year in south east London, which was on the market for £175,000.
To secure his mortgage offer, his lender needed to make its own valuation.
When it came through, it scuppered his plans, as he told BBC Radio 4's Money Box: "The survey came back at £140,000, which we found astonishing."
Chris believes the low valuation was a result of his surveyor looking at the price similar repossessed properties were selling for at auction.
'Temptation'
There are strict rules for how surveyors are supposed to value properties, which is what a willing buyer and seller are prepared to pay on the open market.
Barry Hall represents the Royal Institution of Chartered Surveyors on issues regarding residential valuations.
He agreed that surveyors are not supposed to base a valuation on the price repossessed properties reach at auction, and added: "When the market is difficult, there's a temptation to be cautious, if not overly cautious. That's a temptation to be avoided."
If the property is repossessed and the lender is forced to sell below its purchase price, it can sue the valuer for negligence.
Peter Bolton King, from the National Association of Estate Agents, fears that in order to play safe, some surveyors are ignoring the principle of the willing buyer and seller.
"To my mind there's no excuse for taking the absolute worst case scenario, and then knocking something else off it as well," he said.
Money Box asked three of the biggest lenders whether they had tightened their valuation procedures.
Whilst Halifax and Abbey said they had not, Nationwide said it had.
All three insisted they still ask for valuations based on the open market, not on forced sales.
But Michael Coogan, director general of the Council for Mortgage Lenders, admitted there are cases when banks are forced to do this.
"Some flats have lost a lot of value, and they're concerned that the only resale value you'd get is through a forced sale," he told the programme.
However, some surveyors firmly reject suggestions that they are too cautious when valuing and this is in any way affecting sales.
Chris Shaw, managing director of surveyors and valuers Countrywide, said many sellers still have unrealistic expectations of what their property is worth.
"People still tend to look at the asking price of unsold properties nearby and base their expectations on these figures instead of known sales. Houses that are priced correctly are selling," he said.
BBC Radio 4's Money Box was broadcast on Saturday, 4 April 2009 at 1204 BST.

SaveMeTheMoney

I think it is pretty clear that this is what lender's valuers are doing and it is further adding woes to the already depressed housing market.

dunstonh

SaveMeTheMoney wrote: »

I think it is pretty clear that this is what lender's valuers are doing and it is further adding woes to the already depressed housing market.

You mean that professional valuers are being accused by estate agents of unrealistic valuations?

Its pretty well known that estate agents are over valuing properties by as much as 20% on the expectation that they will knocked down somewhat. To then expect a professional valuer to go with the estate agent's valuation is unrealistic. Also, you have to realise that the valuer is going to value on the basis of a falling market and quicker sale. A totally different criteria to that which an estate agent is working to.

Its not the valuers who are fault.

beecher

For those panicking about remortgaging, why not ask your existing lender what they can offer you first of all?

Jacka87

dunstonh you say that the valuers are not too blame and that estate agents are overvalueing.

Well I would agree that its in the estate agents interest to have a booming property market but there is no way that you can argue that valuers and lenders are not undervalueing, deliberate or not. If similar houses in an area sell for value x, then how can values then place a value less than x if th ehouse is similar. I appreciate that there may be some subtle differences between houses but from what the OP stated there are a number of properties sold for around the same value and his evaluation from the lender is well below that!

I am trying to remortgage at the moment, my flat was bought for 135k last year. I have read that in that time property prices have fallen by between 8-11%. So that would mean a property value of just over 120k on the worst case? However my property was a repossesion and the real property value at the time was around 150, based on a similar sale in the same building. So if you took the 11% from 150 you would be looking at basically no reduction in value, a couple of grand at max. Yet the lender reckons I am defo only kicking 120? Btw if you look at all the sales in my building there has only been one sale below the price of mine that was not defo a repo, however it might have been I just dont know. It sold for 125 recently. Though I would like to point out, its 6 floors down from me so does not have fantastic views, nor is it as secure being so close to street level. On top of that I have a designated parking space of which that flat didnt, and a parking space was sold within the building 6 months ago, asking price 17k! So that alone would mean that my property would be valued at 125+17=142k? Now I am not seriouslly suhggesting my flat has went up in value in real terms, just that I got it as a repo at reduced price. Yet lenders dont want to accept that!

Sorry for long post, just thought you where missing some of the key points!

dunstonh

there is no way that you can argue that valuers and lenders are not undervalueing, deliberate or not.

They are valuing on a criteria of sale in a falling market. That will by default give a lower valuation than estate agent in most cases.

The problem is that values are always an opinion. There is no price tag to tell you and there is different criteria used to ascertain a price. A valuer could give different values to a property depending on the criteria given to him to price it on. Quick sale in a falling market is always going to come in under what you expect.

I am trying to remortgage at the moment, my flat was bought for 135k last year. I have read that in that time property prices have fallen by between 8-11%. So that would mean a property value of just over 120k on the worst case? However my property was a repossesion and the real property value at the time was around 150, based on a similar sale in the same building. So if you took the 11% from 150 you would be looking at basically no reduction in value, a couple of grand at max. Yet the lender reckons I am defo only kicking 120?

Flats always fall more than houses when prices drop. So, you cant apply an average to flats. New builds fall more as well. New build flats are the worst.