ltv, what exactly is the value??

CLAPTON

ollski wrote: »

I understand that but there are surely certain variables. Suppose the vendors had an offer of 260k but from someone who was part of a chain and they decided that even though my offer was 30k less the lack of a chain and speed of purchase was worth that loss. Surely that doesn't mean the value of the property is 230?

the point is there is no such thing as 'genuine value' .. basically it all depends upon the circumstances at the time

blueberrypie

ollski wrote: »

I understand that but there are surely certain variables. Suppose the vendors had an offer of 260k but from someone who was part of a chain and they decided that even though my offer was 30k less the lack of a chain and speed of purchase was worth that loss. Surely that doesn't mean the value of the property is 230?

An offer of £260k from someone who can't complete the purchase is meaningless. The only figure that has any meaning at all is the one that you actually sell for. Again, if the house was worth £260k, it would sell for £260k - there would be more than one purchaser interested at that price.

There's a fab house near me - with a bit of minor work it would be perfect for my family - and it's slightly over-priced. I could certainly go today and make an offer of the asking-price, but my offer would be conditional on selling my own house, and in order to afford that other house, I'd have to sell my own house for a certain minimum. Now I know that certain minimum is more than I'd likely get for my current house. So my offer on that fab house would be of absolutely no value at all. That house has been "sale agreed" three times in the last year - but none of the sales actually went through. No lender is going to lend on the basis of a price that a house *might* achieve in the right circumstances - they're going to lend on the basis of the price that the house *will* achieve today.

beecher2

ollski wrote: »

I understand that but there are surely certain variables. Suppose the vendors had an offer of 260k but from someone who was part of a chain and they decided that even though my offer was 30k less the lack of a chain and speed of purchase was worth that loss. Surely that doesn't mean the value of the property is 230?

Of course it means the value of the property is £230k - the value's the amount the house sells for, not some notional value. LTV has always been calculated using whatever is lowest between the valuation and the purchase price.