If I don't agree with property valuation

Ms_Sophia

Hello,
I've just had a chat with a person doing a valuation of the property we're buying. He's informed me that the ING bank (to which we applied) requires to value the new build property as "second-hand". When I've asked what his definition of second-hand is he says "An old property in a bad condition". ???? :mad:
I was trying to tell him that ING is rather looking what "resell value" of the new build would be in a few years (this is what ING told me over phone). This would not equate to "old property in a bad condition", as in few years time the new build property would be still in a good condition, with the same fixtures & fittings and the only difference is that it would be in the "lived-in" condition. But not old and in a bad condition.

But he was adamant that he was going to value it "much lower" according to his understanding of "second-hand" property. He's also told me several times that I should have not applied to ING Direct, but should've applied to Woolwich or Santander, that this was my mistake. Also said "he doesn't know now how to value this property because it is new but he is asked to value it as second-hand, so it's hypothetical valuation, and it's very difficult for him..." etc. etc. always coming back to his recurring idea that I should have not applied to ING...

Is it normal?

He's mentioned that he's going to value it 10% below agreed purchase price, i.e. ~£380k (~45k below). :mad:

I've called to ING then, asking them if they instruct the surveyors to value new builds as second-hand. They say they instruct them to establish their "resell value" - which doesn't mean 20 years old and in a bad condition.

Clearly this surveyor has acted completely unprofessionaly (if only for the fact he was constantly making put-down comments about ING).

If I do not agree with his valuation what my options are?

P.S. Sorry about the rant but am being very upset

TonyMMM

Once you buy the property, it becomes second-hand for any future sale .... and the "new"" premium has gone, so most valuers would take much the same view ...i.e. whatever you pay for the property, it is going to be worth less the day after.

The valuer is working for ING in this case, not you (although you will be paying for it), and is looking to protect their investment. Your options will be:

1) Challenge the valuation ...but you will need a lot of evidence to have even the slightest chance of success.

2) Use the lower valuation to negotiate down the price.

3) Try another lender and hope for a higher valuation (not very likely).

4) Fund the difference yourself.

5) Walk away from the deal.

I'd go for option 2

ILW

If they had to force a sale, how do they know the property would be in good condition?

How much deposit are you putting down?

holly_hobby

I am so sorry for the way in which the valuer has acted .... and can understand your frustration.

However, moving on .. the only option, if you want to stay with ING, is to request a re-value by a separate valuer (if they have one that also covers the same area). Citing your reasons why you feel this necessary to to the underwriter/processing team.

You could also pay for an independent valuation (if ING have a panel of valuers they use (ask them), best to try and use a company on their list, which means that they should accept the valuation - or at least prompt a re-consideration of the initial valuation from surveyor no 1 depending on what it comes in at ).

If the valuer has no idea how to value the property, he should be contacting local estate agents for comparables - to give him something to work from. (this is normal industry practice).

Other than that ...if you can't have any of the above achieved - you may have to change lender .. although there is NO gte that their valuation will meet your needs. Best to ask them before submission if they have any particular rules regarding valuing new builds.

Halifax valuers are notorous for conservative/down valuing, and was someone we always avoided if the ltv was tight on an application - but they may have changed in recent yrs.

Hope this helps

Holly

Ms_Sophia

ILW wrote: »

If they had to force a sale, how do they know the property would be in good condition?

Are you saying that in case the valuation is being done on a standard property (not new build) - the surveyors do not look at the overall state of the property at all? i.e. they only look at the location, overall size of the flat/rooms and that's it? and the condition the property is in at the moment when it's being valued does not make any difference?

Sorry but it does not sound right. But using the logic you've mentioned they should not take into account the current condition of any property because in a few years time the condition can and will change.

kzfocus

I've recently applied to ING Direct for a remortgage on my property. The surveyor valued it £20,000 less than what an identical property to mine sold six months ago. This means I don't reach the required LTV. Mine is fully refurbished and in good condition. I am appealing the decision with their underwriting team. I'm not sure whether its the surveyor opinion or whether ING are reinterpretating the survey themselves in order to provide a lower value.

Ms_Sophia

TonyMMM wrote: »

Once you buy the property, it becomes second-hand for any future sale .... and the "new"" premium has gone, so most valuers would take much the same view ...i.e. whatever you pay for the property, it is going to be worth less the day after.

The valuer is working for ING in this case, not you (although you will be paying for it), and is looking to protect their investment. Your options will be:

1) Challenge the valuation ...but you will need a lot of evidence to have even the slightest chance of success.

2) Use the lower valuation to negotiate down the price.

3) Try another lender and hope for a higher valuation (not very likely).

4) Fund the difference yourself.

5) Walk away from the deal.

I'd go for option 2

Option 2 - This is a very sought after area in London. The building is 19 flats only and 17 of them were sold in first 2 weeks since coming to the market. We already negotiated the price down. So I don't think a valuation of £XXX done by the bank as 2nd hand property can be a good argument to negotiate a price further down.

Option 3 - I'm not sure why you'd think this. As I can see from this forum there are banks that value new builds as new builds and not as 2nd hand. So there should be a chance with other banks. I would only lose a valuation fee, is it right?

Thanks for your suggestions anyway.

dunstonh

New builds have always lost around 10-15% on first sale ignoring market conditions. So, a 10% reduction falls right where you would expect it to be.

Clearly this surveyor has acted completely unprofessionaly (if only for the fact he was constantly making put-down comments about ING).

I dont see that. He appears to be applying common sense and the norm.

Ms_Sophia

ILW wrote: »

How much deposit are you putting down?

My LTV is 60%. Does it make a difference, for this particular issue?

Ms_Sophia

dunstonh wrote: »

New builds have always lost around 10-15% on first sale ignoring market conditions. So, a 10% reduction falls right where you would expect it to be.



I dont see that. He appears to be applying common sense and the norm.

Acting uprofessionally is not about how he values the property. It's about how he acted and what he was saying. He was acting on behalf of ING and was constantly saying that I made a mistake having applied to ING. That he doesn't know how to value the property. That 2nd hand property means he must value it as if it was 20 years old and in a bad condition.
And new builds have not ALWAYS "lost around 10-15% on first sale ignoring market conditions". This depends on the area. We've seen a number of properties which were bought as new builds 2-4 years ago, and they are now on the market at much higher price than their purchase price was. And they are being sold very quickly too! While in other regions of the UK prices may be falling, in London and areas like Wimbledon, Clapham etc. they have not that much. Moreover, they manage to increase.

handytips

Ms Sophia
What you have to remember is this. The surveyor is acting on behalf of the lender, and the lender will instruct the surveyor as to how they want it valued. I suggest you may have been told incorrect advice by ING. What you have to remember the person you talked to at the lender in all likelihood may not have been qualified to give any sort of advice. I think the surveyour was basically suggesting other lenders may be more helpful. Once again i suspect that your case is one where the client is hooked in by the interest rate on offer. Go to a broker they will sort this out for you. If you wont do that there is one Lender on the high street that will value the property the way you want it to be valued. But then again i dont get paid for giving out Free advice.