How accurate is a valuation?

mufi

It would be considerably more worthwhile if a valuer was not permitted to know the purchase price before valuing.

As we don't need a mortgage, we're going to test this shortly by having a survey/valuation done, having refused to tell the surveyor what we've offered.

muskoka

mufi wrote: »

It would be considerably more worthwhile if a valuer was not permitted to know the purchase price before valuing.

As we don't need a mortgage, we're going to test this shortly by having a survey/valuation done, having refused to tell the surveyor what we've offered.

i'd agree with that barring the valuer will only phone the estate agent or look online to find the asking price

Doozergirl

Orpheo wrote: »

Wrong. From personal experience, I had a survey come back valuing a property at 13K more than the accepted offer.

You shouldn't ever find that on a valuation for a residential mortgage.

Entirely feasible for a independently commissioned survey.

new_home_owner_3

if its a indipendant valuation not done by your mortgage company it may come back higher, however if it is done by your mortgage company all they will put is what is the valaution of what you are paying, as this is all they are interested in.

unless its worth less

QTPie

SimonMrGreenWard wrote: »

No survey will EVER come back valuing a property higher than the amount of your accepted offer.

One of mine did.... Had two surveys done: the mortgage valuation came back spot on what we had offered, the Homebuyers (independent of Mortgage) report suggested that the house was worth £35k more...

But valuations are only guesses - and not an exact science. The house that we ate buying maybe worth that higher valutation on paper, but since it was on the Market (for £5k over that) for 14 months - with no other offers or price drops - I severely doubt it!

QT

lincroft1710

The accuracy of a valuation can only ever be borne out by what the item actually sells for. 2 or 3 valuers could individually value a property at between £95K and £100K, but if the best offer is only £92K then that is what the property is worth because that is what the market is prepared to pay.

Although the items are of considerably lower value, it is interesting watching Cash in the Attic when the expert values an antique at £200 - £300 and it fails to attract a bid higher than £150.

jockosjungle

In a falling market you don't want to be the valuer who is valuing houses to high, what would the point be? The mortgage company want to make sure it is worth what it is being bought for, nothing more and nothing less. Yes a valuer could add 10% on because its worth it, but if the house is repossessed and they cannot sell it for the valuation then the lender is going to be unhappy, so why lose themselves the extra leeway?

They valued our house at £62k which is what we offered, now if they had said it was worth £70k I could be coming back to my lender demanding a better rate due to the better LTV, mortgage lenders won't massively like that

R

MegaMiniMouse

You have to differentiate between 'value' and 'price'

The 'value' of a property is what a buyer would be willing to pay if he/she had the money.

The 'price' of a property usually depends on what a mortgage company is willing to lend.

I have a property for sale which earns me £1200 pcm from 2 lodgers.

The total outgoings on the house are about £600 (the £165,000 mortgage is 'interest only').

The house was 'valued' in July/August 2007 at £195,000.

My personal space consists of a single room with ensuite toilet/shower.

How much would you pay for my house if you only need a single room? How much would a mortgage company lend?

MMM

Orpheo

Doozergirl wrote: »

You shouldn't ever find that on a valuation for a residential mortgage.

Entirely feasible for a independently commissioned survey.

But it happened. Homebuyer's survey and valuation for a residential mortgage.

LittleMissAspie

Orpheo wrote: »

But it happened. Homebuyer's survey for a residential mortgage.

I wish people would stop using the word "survey", it's meaningless and causes confusion. The mortgage company does a valuation, purely to satisfy themselves that they aren't lending too much. It has a vested interest and there's no reason they'd want to value it higher than the accepted price. The Homebuyer's Report and Building Survey are done for the buyer and have nothing to do with the mortgage company. They are independent and probably more accurate. You may have bought it from the mortgage company but the Homebuyer's Report and mortgage valuation are not linked, you don't even need a Homebuyer's Report to buy a house.