Natwest Mortgage Undervalue £30k!!

brit1234

cyberion wrote: »

The asking price is £205000. All was going well, until Natwest did a survey and undervalued the house by £30,000, so they wont give us the mortgage.

This site has 50+ houses, all of which have sold for the asking price of £205k, some of these have been mortgaged by Natwest.

How is it possible for this to be so far out of sync with the rest of the other houses?

Hi, got your quote the wrong way round. Your portential house is £30,000 overvalued, not being undervalued by the banks.

As for the properties being sold for £205,000, thats a trick which developers have been doing for last decade. They sell a property through a gift deposit, or more commonly shared ownership or shared equity. The buyer never pays the full price hovever the developer logs the full price on the land registry. That way they can use it as a bench mark to say properties of that type sell for the higher price. Lenders are wise to this now and oftern give lower valuations than the developer wants. After all they are short of money and don't want to overlend on something which will fall in value.

dopester

cyberion wrote: »

How is it possible for this to be so far out of sync with the rest of the other houses?

What a bank may be willing to lend may be very different today than it was yesterday or last week or last month - as new variables come into play. Such as hung parliament for one, the Greek Euro/debt crisis, and many others to come. House prices/values are subject to rapid changes. It's up to the banks and lenders what they want to lend - people are going to learn that impacts hard on prices above their own wishful thinking.

Your neighbours who did pay £205K are probably snogging negative equity right now, and I suspect it's only the beginning.

property.advert

Why does everyone assume the valuer is right ? I have had valuers value a property worth £300k at £209k before. They are ultra cautious these days and do not want Nat West suing their !!!! off for over valuing.

I think you need another valuation. First though go to estate agents to get prices of similar properties and see how they have performed over the last 12 months. Get a valuation to sell your potential property.

Don't just back down to the bank nor accept what they say.

Wickedkitten

property.advert wrote: »

Why does everyone assume the valuer is right ? I have had valuers value a property worth £300k at £209k before. They are ultra cautious these days and do not want Nat West suing their !!!! off for over valuing.

I think you need another valuation. First though go to estate agents to get prices of similar properties and see how they have performed over the last 12 months. Get a valuation to sell your potential property.

Don't just back down to the bank nor accept what they say.

Why would anyone sane want to spend 300k buying a house that someone has only valued for 209?

jonewer

ghostbusters wrote: »

I would think a lower than expected evaluation by the bank strengthens the negotiation position of the buyer..

Yes, it does.

Of course it would be wonderful if you could negaotiate £30k off, but I dont think thats likely to happen.

The vendor is likely to refuse to drop the price by that amount meaning that the buyer cant get a mortgage and they have wasted many weeks and hundreds of pounds trying to a buy a place for a price they were comfortable with but now cant proceed and have to start from square one.

brit1234

property.advert wrote: »

Why does everyone assume the valuer is right ?

Because developers/buildershave been over valueing properties drastically over the last decade and still are doing it. You may of heard of this little credit crunch which brought the country/world to the knees. All caused by people over valuing property and creating more exotic ways for people to borrow.

Remember it is the tax payer who bought the dodgy mortgage debt off the banks. We are now going to have job loses, public sector cuts and tax rises to cover it.

Sorry property advert but you are wrong.

Orignal poster haggle them down in price if you want the property. Don't overpay or you will be straight into negative equity.

dopester

jonewer wrote: »

Yes, it does.

Of course it would be wonderful if you could negaotiate £30k off, but I dont think thats likely to happen.

The vendor is likely to refuse to drop the price by that amount meaning that the buyer cant get a mortgage and they have wasted many weeks and hundreds of pounds trying to a buy a place for a price they were comfortable with but now cant proceed and have to start from square one.

Whine-whine-whine about having wasted money and time on the lead-up to buying. If you've not 100% secured the money you need to buy, in order to proceed, and find out the banks won't lend you what you want - that is your own reckless loss, in my opinion. Swallow it down.

You don't think sellers/developers will lower by £30K... but something has got to give, if you can't find enough lenders will to lend (even at premium mortgage rates) at what sellers and developers want for their properties.

Values were pushed up by ever more annual credit expansion to those who wanted to borrow more to buy houses... so ever tighter credit expansion means values fall in my opinion. Not everyone can refuse to sell - some people have to move/sell - even developers have to cut the price if the lending market won't extend credit to support old-world values in a changing marketplace.

What they going to do? Hold on to empty new-builds waiting for impossible asking prices for many months and years - probably seeing values fall even further as credit conditions worsen?

Valuers face 2,000 court cases over off plan property prices
05 May, 2010

Thousands of cases are in the court pipelines against property valuers accused of getting the prices wrong when telling mortgage lenders how much off plan and new build properties were worth.

Banks and building societies took 25 cases before the High Court in the past 12 months – seemingly not many until compared with just a single case heard in the previous five years.

Many valuation firms are thought to be in financial problems as a result of action from lenders who felt properties were overvalued.

Some are thought to be near collapse with the partners facing ruin.

Borrowers have walked away from loan deals or faced repossession, leaving lenders to sell their property on at a significant loss as house prices plummeted in the recession.

David Dalby, director of the RICS Residential Professional Group, has told the media that: “A large number of potential claims are being notified to our members, unsupported by evidence of negligence, but where the lender has taken possession and has suffered a loss.”

Mr Dalby indicated that more than 2,000 claims against valuers are waiting to go before the courts.

Many of the valuations involved valuing off-plan developments of flats in city centres up and down the country where developers offered gift deposits and other incentives like carpets and furnishings that made valuing the property complicated.

The Financial Services Authority and courts are also dealing with mortgage fraud cases valued at millions relating to off plan and new build purchases.

Mortgage lenders are thought to be chasing valuers for compensation as many are covered by professional indemnity insurance that settle claims out of court.

jonewer

dopester wrote: »

Whine-whine-whine about having wasted money and time on the lead-up to buying. If you've not 100% secured the money you need to buy, in order to proceed, and find out the banks won't lend you what you want - that is your own reckless loss, in my opinion. Swallow it down.

You don't think sellers/developers will lower by £30K... but something has got to give, if you can't find enough lenders will to lend (even at premium mortgage rates) at what sellers and developers want for their properties.

Values were pushed up by ever more annual credit expansion to those who wanted to borrow more to buy houses... so ever tighter credit expansion means values fall in my opinion. Not everyone can refuse to sell - some people have to move/sell - even developers have to cut the price if the lending market won't extend credit to support old-world values in a changing marketplace.

What they going to do? Hold on to empty new-builds waiting for impossible asking prices for many months and years - probably seeing values fall even further as credit conditions worsen?

Yes, I'm well aware of the HPC dogma, thank you very much.

I'm just explaining why it is that prospective buyers arent always leaping with joy when the house they're trying to buy doesnt pass valuation.

madeupname1

cyberion wrote: »

Hi, We are first time buyers, buying a new home which wont be completed until July.

The asking price is £205000. All was going well, until Natwest did a survey and undervalued the house by £30,000, so they wont give us the mortgage.

This site has 50+ houses, all of which have sold for the asking price of £205k, some of these have been mortgaged by Natwest.

How is it possible for this to be so far out of sync with the rest of the other houses?

We have appealed, should i be worried? is this such a massive difference that actually it was a mistake made by the survey company?

Any advice welcome!!

The valuer will be valuing the house on a different basis from you/the developer. The purpose of the valuation from NatWest's perspective is to determine how much they could sell the house for in the event that you did not keep up your mortgage payments. In that event, the house value will always be lower because they will sell it quick (which usually means cheap). That said, sometimes valuers can be over cautious and you may be able to get the valuation up by a bit, but probably not by £30,000. I would use this to try to negotiate the price down (but an appeal may also be worthwhile to move the value up a bit).

_Andy_

Customer: Hello Mr Valuer, here's £300 (say), as you are a professional, could you please tell me how much this house is worth as I'd like to buy it?
Valuer: Certainly, it's worth £175k - by the way, it will probably devalue pretty quickly anyway.
Customer: Ah, rubbish - I'd like to pay tens of thousands more
Valuer: Why did you ask and pay for my opinion then?
Customer: Dunno! C'mon please value it for more?
Valuer: So you want to pay tens of thousands more than what it's worth?
Customer: Yes please!!

I'm guessing the OP takes a £1 loaf of bread up to the till to Tesco and refuses to pay anything less than £2.