Lender's valuation has stated i'm paying too much...

779

I have just paid over £500 upfront fee to a mortgage lender, non-refundable valuation and product fee.

They have told me that I am paying £13k too much for the property.

Another guy who wanted to buy to let the property put in an offer only £3k less than myself, - which was the main reason why I believed the property was worth what they are stating. Other, similar properties have sold for similar money also.

The EA has sent supporting evidence to the lender of other similar properties which have sold for similar values, and has told me that it's 50/50 whether they'll change their valuation.

If they dont, I'll either have to renegotiate with the seller, or pull-out I guess?

I'm very worried, 1 that i'll lose the £500 that I have paid to the mortgage company, and 2, that maybe I am being ripped off.

Are mortgage valuations usually pretty accurate?

Is this common??

TonyMMM

Any valuation is only an opinion, albeit one based on the professional experience of the valuer, comparative sales etc.

Offer £13k less, and if they refuse walk away, there are plenty of other properties out there. Personally I'd rather lose the £500 than think I was paying £13k too much, but that's your call.

Your mortgage will be based on the valuation anyway, so if you do want to proceed you will have to find the extra £13k from somewhere.

Any other buyer needing finance is likely to have a similar problem.

kingstreet

779 wrote: »

i'll lose the £500 that I have paid to the mortgage company

No. If you change the application to a new property you should be able to continue, subject to the payment of another valuation fee, of course.

On the general point, although the surveyor is acting for the lender, paying over the odds for a property may not be in your best interests either.

Caveat_Mortgagor

The value of any property is not determined by how much the buyer and seller agree upon.

It is worth exactly how much the vendor is willing and able to pay. If you are borrowing, there is often a difference between what you are willing to pay and what you can actually pay.

The same may well be true of the other bidder.

If the other bidder is also reliant on a lender valuing the property as much as he does, then it may just be that the vendor will have to accept a much lower price

If so, effectively the lender will effectively set the price. You need to position yourself to take advantage should this eventuality arise.

779

As I say, the EA have submitted supported evidence to show that the property is worth what we have agreed. I have also asked for the same information to be sent to me.

I am going to ask the EA tomorrow whether they have actually contacted the vendor to tell him this news........- I would like him to maybe prepare his thoughts if I am not able to continue at our currently agreed price.

My problem is that the other bidder was a buy-to-let'er, and has 100% cash, - so if he's still around (and the bank doesn't change their mind about the valuation, then the seller isn't going to lower his price much, and that will be my £500+ down the swaney)

I have a 30% deposit, which actually will probably shield the bank from problems should they arise, - of course however, I dont want to be ripped off... - but from the properties that I have seen over the past few months, and the fact that a buy-to-let'er offered only 3k under me, I thought the price was fair.

olias

I thought it was well known that in the current markey lenders valuers were deliberately under valuing properties to give the lender more leeway if they have to re-posess in the future.

Olias

TonyMMM

779 wrote: »

As I say, the EA have submitted supported evidence to show that the property is worth what we have agreed. I have also asked for the same information to be sent to me..

The EA is working for the vendor, not you ....their job is to get the highest price (and fees) not necessarily the "right" price

779 wrote: »

My problem is that the other bidder was a buy-to-let'er, and has 100% cash.

Then let him have it ..... find another property.

kingstreet

779 wrote: »

My problem is that the other bidder was a buy-to-let'er, and has 100% cash

The estate agent told you that?

Why do you think they did that?

He may have cash (unlikely in the current market, most landlords are asset rich and cash poor) but he'll have a valuation/survey just like you and if the surveyor downvalues it, he'll be back for a reduction just like you.

hazyjo

Are you sure the other buyer even existed? Wouldn't be the first time an EA had invented a buyer (shock, horror!). In fact, I'm getting somewhat fed up with hearing 'suddenly another buyer's come forward and I've been told if I up my offer by however many thousand (usually not many), I should secure the purchase'. If they were 100% cash, no chain, BTL, I'd have thought the vendor would have gone with them anyway for the sake of £3k.

I'd definitely just try dropping them the £13k and consider walking away if they won't drop. I definitely would not believe the EA's 'proof' that it's worth the £13k extra. They could just as easily find 'proof' that it's worth £20k less than you're paying.

Good luck.

Jx

779

Thanks very much for everyone's thoughts.... - sometimes when you're in the thick of it, and emotionally attached, it's difficult to think objectively!

779

The situation at the moment is that the Estate Agents have submitted supporting evidence that the property is worth what I have agreed. I have looked at the evidence submitted, - it consists of 4 properties, dating back to January 2011. I can only wonder that other similar properties have been sold which are not comparable...

I have looked further at sold prices, and I have found similar properties which have indeed sold at about 13k less than what I have agreed.

I have been guided by the Estate Agent that this was a good price, in fact, lower than what was expected to achieve. I have used the EA's Mortgage Advisor who advised me to go ahead with this, - and now, I stand to look over £500 because the property is worth 13k less than what I was going to pay for it.

Have I got any come back on the agent? If i went ahead with this sale, i could potentially lose 13k, - if i stay where I am, i look over £500

Shall I contact these people?? yourdispute co uk

????