Question about the valuation

krockroc

We've had got the survey/valuation back from Nationwide and they say the house we want to buy is worth the agreed sale price of 475k. My wife still thinks we are over paying considering the current housing market. I said to her that the Nationwide wouldn't have valued it at 475k if it wasn't worth that much as (apparently) Nationwide are one of the more cautious lenders. I'm just wondering if the LTV ratio comes into play here? We have a 60% deposit. Would Nationwide be more lenient due to a higher deposit? If it was only a 10% deposit do you think they may look at the value with more scrutiny? Thnaks for your help in advance – I just want some reassurance that they will have valued it (without prejudice) at the correct price.

TonyMMM

There is no "correct price" , it is worth whatever someone is wiling to pay for it .... all the Nationwide are doing is satisfying themselves it represents sufficient collateral against their loan. With you putting up 60%, the chance of them not being able to recover their money should they have to repossess is pretty slim, so you may be right that they would look more closely at a different LTV situation - but that doesn't have any relevance to you.

You could employ a surveyor independently to give you a valuation if you're having second thoughts ... but they would still be giving their opinion ... not a correct price. The only real price they could give you probably is the actual rebuild cost of the house - but that only really comes into play for insurance matters anyway.

If you think you are overpaying - drop your offer and see what response the seller gives, but be prepared to walk away.

TEDDYRUKSPIN

It seems that the both of you believe the house is not worth the current price in the market.

Just to mention, even if Nationwide came back and told you it is only worth £450k, for example. The seller may not even drop it to that price.

Your only option now is to try another mortgage lender and see what valuation the house is worth. Alternative, is to go back in and bid a much lower price.

The above valuation will stand with the company.

krockroc

what's the best site to use for local house price info other than net house prices?

opinions4u

Right Move has a section that shows sale price by property going back several years.

If you didn't want to pay £475k, why on earth did you offer to? While it's not illegal to renegotiate price at this stage, it's poor form unless a specific defect has been identified.

In answer to your original question, I personally believe that valuers are far more cautious on loans that have a high LTV as they are at greater risk of being liable for a lender's losses further down the line.

krockroc

We had an independent full structural survey done yesterday and the surveyor noticed some problems with the roof. It's a 1930's property and the roof has no felt. Apart from this he said it would need a new roof in the near future which would be quite expensive. I'm not a roof expert so was unable to determine this during my initial viewings.

We were thrown a bit by the property next door. In May 2006 it sold for 545k. A couple of months later it sold for 620k. We presumed it was an investor who bought it and did it up a little bit and sold it at a profit. The surveyor yesterday said it sounded like a mortgage scam and it could be unrealistic of the area. I have no way of finding this out (at least I don't think I have).