Difference between valuations!

alipops1986

Hello All!

Approximately 5 months ago i had a valuation done by Natwest as part of their home owner loan process - the valuation came back at 89,950. I was really unhappy with this but had no proof for them to increase the valuation so withdrew from the mortgage without any costs fortunately.

Now, earlier this week I had a valuation completed by HSBC for their home owner loan and it's come back at 95,000 - much more like what i thought than previously! :T

Just wanted to warn people to consider careful whether the valuation is entirely accurate or rather just valuers being strict in this climate!

eddddy

It's worth bearing in mind that valuations for mortgage purposes are likely to be the value that can be achieved through a distressed sale. i.e. The borrower has defaulted on the mortgage (and probably not got any spare money to keep the property well maintained), the bank has repossessed the property, and wants to sell it quickly to get their money back - possibly even at auction.

This might be a lot less than you could sell the property for through normal channels.

The valuation firms were panicking a couple of years ago, because there was talk that the banks might sue them for negligence if they over valued. e.g. Valuer values a property at say £100K, the bank has to reposess it a short while later, and can only sell it for £75K - so they sue the valuer for being negligent in their valuation to cover their losses. The result being that valuers became far more conservative.

CloudCuckooLand

£5k or 5% either way is not much. Especially with 5 months in between. A couple of distressed sales nearby 6 months ago, then a couple of asking price sales in the last quarter, could easily explain such a minor discrepancy.

opinions4u

6% difference over 5 months?

It's more than possible that the market in a particular locality has changed by that much, so it very possibly isn't a case of valuers being over-cautious.

Interesting that the HSBC valuer has given you a stronger than expected figure. They seem to be the lender, judging by these boards, who get most moans for valuation outcomes.