surveyors deliberately undervaluing property... is there no regulation on this?

overit_2

I know there have been other posts relating to this but this has now happened to us twice in the space of a week. Firstly on the property we are buying... new build valued as second hand which despite our having three meetings with the mortgage company before going ahead we were never advised of. 'Luckily' they have agreed that if we go onto a different product at a higher rate of interest (surprise surpise) they will lend us the money after all.

This week our buyers mortage company has under valued our property stating 'the purchase price is considered to be high and is not supported by evidence of sales of comparible properties in the area' which is bizarre as next door sold in 2008 for the exact amount we have accepted. We also remortgaged last year with no problem yet her lender has lopped £12k off. Because we have already taken a hit on the property we are buying to keep things moving this will scupper the sale.

Bearing in mind the sale of next door, our re-mortgaging and our estate agent supplying details of three other properties they are refusing to reconsider. Is there anything we can do or do we have to just walk?

Thanks.

poppysarah

2008 was quite a different time to this.

Shouldn't a new build valued at SH be cheaper?

Cheaper is a good thing. Not if you've remortgaged to the hilt though.

terrierlady

i dont think there a building soc who dont value new build as second hand its been that way for at least the last six months, down valuations are part of our every day life, valuers are scared stiff of the current market and are covering their backs who could blame them?

Cannon_Fodder

Let me make sure I have this straight...

You are buying somewhere, new build, that got "down-valued".

The buyers of your place, have now had a valuation that has been "down-valued".


This might sound dumb - so why doesn't this add up to everyone able to afford both houses more easily, and why don't the two of you present it to the developers of the new build (they will be used to it) and say "unless you want this chain to collapse, you will have to re-negotiate..."

Win-win, except for developers!

Has it occured to anyone, that maybe the valuers are right, and all the individuals who want best money for their houses are not able to be unbiased, so could be wrong...?

Fire_Fox

Maybe the bank hasn't undervalued, you have overvalued? One house doesn't make a property market, the surveyor will have looked at the entire local market for his valuation!

henrik1971

The default position of many people looking to trade up or move in general is an over-optimistic view of the value of their own property, fuelled by unrealistic speculations on its value by estate agents who have ulterior motives for doing this.

Valuers are being more conservative these days because a frightening number are facing possible claims on their PI insurance from mortgage lenders accusing them of over-valuing in the good times. These allegations may or may not be true, but a lot of the time, there was an element of making the valuation "fit". In other words ascribing a value that could justify the loan being requested. A bit of a dicey game to get into.

Remember that there is a multitude of evidence everywhere (especially in the case of new-build apartments, and new houses) that people overpaid at the height of the boom (say 2004-2007). A friend of mine who is a panel valuer tells me horror stories of properties he's valued following repossession proceedings where the 2009 value can often be 50-60% of the (for instance) 2006 value.

In your case, the 2008 sale of next door may have been initiated several months before the sale actually completed, which backdates the true valuation date even further, and as mentioned by a previous poster, the market is very different today.

Have you thought about paying a couple of hundred quid for your own valuation by a chartered surveyor? It might not get the lender to change their mind, but it would be additional evidence. Also it might be worth querying whether the valuation in hand was produced with the assistance of AVM (automated valuation model). If there have been some lower value sales in the vicinity recently which you don't know about or haven't mentioned, these could have impacted the estimated value of your property. If you haven't already checked a site like nethouseprices to see all the recent sold prices in your area, I would recommend doing so.

edgex

so
you, not a valuer, have come up with a value for a property
a valuer, who is a valuer, has come up with a different value

& your saying that the valuer is wrong
:rotfl:

Milliewilly

I thought prices were stronger now than 2008?

I don't agree that Valuers should down value property because they *might* get sued in the future or are getting sued now for the boom / bust.

If properties don't drop can the vendors sue the mortgage valuer who has cost them £££££'s by downvaluing their house in a few years time? No. They want it all ways.

Surveyors can and do get it wrong. I would say a comparable from 2008 is on the low side as properties have recovered - 2008 was the lowest point.

Don't forget Banks rarely send a LOCAL surveyor so they rely on sold prices and estate agents advice just like the man in the street can get off the internet.

There are people on here who think 'oh saves me money' when in reality it has no effect as the sale either fails altogether or the whole chain drops to compensate. The person at the bottom of the chain may think they've got a bargain but their purchase price will be used as a valuation base in the future so its all swings and roundabouts.

I can give examples of valuers this year valuing houses at less than it would cost for the land they are built on on a 40% LTV!!

henrik1971

Milliewilly wrote: »

I thought prices were stronger now than 2008?

There are some areas where prices have recovered slightly, but even then it refers more to asking prices than sold prices. Its very difficult to generalise, but outside of London and the south east, values are struggling in many areas.

I don't agree that Valuers should down value property because they *might* get sued in the future or are getting sued now for the boom / bust.

I don't think they are down-valuing. Remember, there is no such thing as a right or wrong valuation. It is all down to an informed opinion and they are simply being realistic and reflecting market conditions

If properties don't drop can the vendors sue the mortgage valuer who has cost them £££££'s by downvaluing their house in a few years time? No. They want it all ways.

Valuers aren't anticipating what may happen. They're valuing at that particular moment in time. Also, a vendor can ask whatever price they want for their house and they have a choice to sell or not sell at any given price. The best indication of what the 'true' value is, is what someone is prepared to pay.

Surveyors can and do get it wrong. I would say a comparable from 2008 is on the low side as properties have recovered - 2008 was the lowest point

Agreed (except for the 2008 thing). Surveyors can get it wrong on occasion. They are fallible. There will always be a risk in relying on one opinion of value only However, if two or three surveyors independently of each other reach a similar value for a property, its highly likely to be a very good indication of value.

Don't forget Banks rarely send a LOCAL surveyor so they rely on sold prices and estate agents advice just like the man in the street can get off the internet.

I think there's truth in what you say. However, the surveyor they send, if he or she isn't local, will likely confer with a a colleague who has good local knowledge. Also remember the survey visit itself is purely an information gathering exercise.

There are people on here who think 'oh saves me money' when in reality it has no effect as the sale either fails altogether or the whole chain drops to compensate. The person at the bottom of the chain may think they've got a bargain but their purchase price will be used as a valuation base in the future so its all swings and roundabouts.

I can give examples of valuers this year valuing houses at less than it would cost for the land they are built on on a 40% LTV!!

Me too. Then again values a few years ago were getting out of hand. The best (or worst I suppose) example were new build one-bed flats in my locality. How can a 400 square foot leasehold property with no outside space, a terrible service charge in an area no sensible person would want to live, ever be worth that much? £50 - £60k is much more realistic.

CloudCuckooLand

Milliewilly wrote: »

I thought prices were stronger now than 2008?
2008 was the lowest point.
they rely on sold prices

[IMG]http://www1.landregistry.gov.uk/houseprices/housepriceindex/report/default.asp?g=1&gt=1&a=E&W-ALL&ac=London&s=01 October 2007&e=01 October 2009&t=4[/IMG]

You would need to be clearer about which bit of 2008 is being compared.

Sold prices are not stronger than 2008, they may just be getting back to being the same as the tail-end of 2008, on average.

London is ahead of that average. Other places, naturally to constitute an average, are behind that average.

Nationwide's positive moves earlier in 2009 for "approvals" are not valid for valuations, as you say yourself it is sold prices they rely on.

SingleSue

We are still dropping down here so sold prices in my area are def not higher than 2008!

Our peak was April 2008 though, we started dropping a fair while after a lot of other places.