Help with Mortage Valuation please

maddie67

We are in the process of selling our home and buying another which is a new build property. We already have a mortgage with Santander which we were to transfer over to the new property. All has been going smoothly, until a couple of days ago.

I received a letter from Santander, expecting it to be our new mortgage offer I was shocked when the letter said the valuation on the new property was 20k less than the purchase price! I have spoken to the builder who advised me that they had another 2 valuations done last week, one was on a house exactly the same as ours and both came in at the asking price, so obviously the builder isnt going to reduce the price by 20k. Builder has offered to send both the other valuations to Santander with a view to them reviewing their valuation.

I have spoken to Santander numerous times today and feel like Im hitting my head against a brick wall! They point blank refuse to look at the valuations on the other properties and will not change the outcome of their original valuation. We can appeal against the valuation at a cost of £330 and they will send a surveyor out again.

The other thing is, the property was advertised as leasehold but we are buying the freehold and the property contract etc clearly states the property is freehold. The valuation report states the property is leasehold, which I feel would not give a correct valuation anyway, but Santander refuse to take this into account as well, they say the difference is negligable.

Can anyone offer me any advice at all on this, before I crack up?? We are tied in with them and face a penalty of 5k if we go to another lender, which I am looking into, but as we have a purchaser waiting to move into our property, I want to try and avoid starting all over again with applications etc.

Has anyone ever appealed against a mortgage valuation? Is it likely that Santander will come back with the same valuation? I have no doubt in my mind that the property is definately worth the asking price (we had already negotiated a reduction before applying for the mortgage)

Sorry this is so long!

nearlynew

sounds as if santander has done you a big favour.

why would you want the valuation to be higher and have a bigger mortgage?

kmmr

I successfully got A&L (which is Santander now) to redo a survey by sending a letter with a range of local sales, extra details of renovation plans (this was a further loan) and they sent out the valuer again. He still wasn't generous, but at least enough for me to get the loan.

I suspect they used e-surv, who are notoriously tight on valuations, to the point of idiocy.

I suggest you write a letter, include the other valuation and details. Put in all the relevant, unemotional, information about the property, and respectfully ask them to re-consider their valuation. If this doesn't work, then ask them to get the surveyor to explain why the one your are purchasing is different to the one already valued at £20k higher.

But, I emphasize, be polite and write, don't call. Don't say - "your valuer is an idiot, look at these comparatives" - just suggest that perhaps the valuer misunderstood a few important issues, such as the freehold, and it would be fair for him to come and have another look. In our case we got the same valuer again, so it could have been pretty uncomfortable if we had been abusive about his work before!

A letter is a lot harder to ignore than a call. And it only takes a few hours to write and collate the information (get some sale information from land registry if you can) and the letter is there the next day. So no major delays in the grand scheme of things.

Eric1

maddie67 wrote: »

I have no doubt in my mind that the property is definately worth the asking price (we had already negotiated a reduction before applying for the mortgage)

your own valuation may be correct for September 2010, but Santander has to take long-term risks into account. I suspect your equity is not big enough to cover the risks.

nearlynew

why would you want the house to be more expensive?

vixenlouis

I had the same, I purchased a new build recently, the valuation camein 20k under there asking price. I spoke to the builder and split the difference, so got 10k off the asking price.

Might be worth trying. I guess it depends on whether you want the house or not?

maddie67

Its not a case of wanting the valuation to be higher, is a case of wanting the valuation to be correct - if that makes sense. The house is worth the purchase price - we arent looking to get the house cheaper, and two other houses on the site were valued by other surveyors this week, one of them is exactly the same as our house, the other is smaller, both have been valued at the purchase price. The smaller house was actually valued higher than ours!

Believe me, if I had any doubt as to the house being worth the purchase price, we would never have made an offer on it and I would have been chasing the builder for a 20k discount if I thought the surveyor had a point. Santander will not budge unless we pay £330 for another survey, by a surveyor of their choosing. The ironic thing is I was told today it would cost £295 for this but she let slip that the price is based on the value of the property, she then came back and told me for our property it would be £330 when I quizzed her, and pointed out they were insisting it was worth less, she said she meant the prices were based on purchase price!

Eric1

maddie67 wrote: »

Believe me, if I had any doubt as to the house being worth the purchase price, we would never have made an offer on it and I would have been chasing the builder for a 20k discount if I thought the surveyor had a point.

That is absolutely fine as long as you can guarantee, with your own money, that the house will be worth the purchase price next year, if you need to sell, or you will cover the difference.

Doctor_Gloom

maddie67 wrote: »

The house is worth the purchase price - !

The bank obviously doesn't think so. And as its their money you're looking to buy the property with, its their opinion that counts. I can't see why the bank would deliberately want to undervalue it. They're actually doing you a favour by stopping you getting into negative equity.

nearlynew

maddie67 wrote: »

Its not a case of wanting the valuation to be higher, is a case of wanting the valuation to be correct - if that makes sense. The house is worth the purchase price - we arent looking to get the house cheaper, and two other houses on the site were valued by other surveyors this week, one of them is exactly the same as our house, the other is smaller, both have been valued at the purchase price. The smaller house was actually valued higher than ours!

Believe me, if I had any doubt as to the house being worth the purchase price, we would never have made an offer on it and I would have been chasing the builder for a 20k discount if I thought the surveyor had a point. Santander will not budge unless we pay £330 for another survey, by a surveyor of their choosing. The ironic thing is I was told today it would cost £295 for this but she let slip that the price is based on the value of the property, she then came back and told me for our property it would be £330 when I quizzed her, and pointed out they were insisting it was worth less, she said she meant the prices were based on purchase price!

I'm afraid you are being played.

The other houses that you say have been "valued" at the same or higher haven't been sold yet have they?

maddie67

kmmr wrote: »

I successfully got A&L (which is Santander now) to redo a survey by sending a letter with a range of local sales, extra details of renovation plans (this was a further loan) and they sent out the valuer again. He still wasn't generous, but at least enough for me to get the loan.

I suspect they used e-surv, who are notoriously tight on valuations, to the point of idiocy.

I suggest you write a letter, include the other valuation and details. Put in all the relevant, unemotional, information about the property, and respectfully ask them to re-consider their valuation. If this doesn't work, then ask them to get the surveyor to explain why the one your are purchasing is different to the one already valued at £20k higher.

But, I emphasize, be polite and write, don't call. Don't say - "your valuer is an idiot, look at these comparatives" - just suggest that perhaps the valuer misunderstood a few important issues, such as the freehold, and it would be fair for him to come and have another look. In our case we got the same valuer again, so it could have been pretty uncomfortable if we had been abusive about his work before!

A letter is a lot harder to ignore than a call. And it only takes a few hours to write and collate the information (get some sale information from land registry if you can) and the letter is there the next day. So no major delays in the grand scheme of things.

Thank you KMMR - and it was e-serv. They are insisting they will only review if we pay the £330, despite the surveyors error on the freehold/leasehold. Im happy to do this, just worried they will come back with the same. Have asked them to speak to the surveyor, they have sent an email to the relevant department but say it can take up to 5 days for a response.

Have asked them why they will not even take a look at the other 2 valuations and maybe review our application, they said that they do not come up with their valuations by using information from other peoples/properties figures. The only way they will review it is by following their procedures - ie, us paying them for the other survey.