Halifax valuation criteria?

divlaw

Hello all,

New home buyer here.

I'm a little concerned about the criteria Halifax use to determine the valuation of a house. I

s the previous sold price of that particular property taken into consideration? I am concerned as the house I am looking to buy was sold for a very low price (as compared to similar houses on the same street) in 2007, but since was fully refurbished and now the price of the house should be the same as other houses on the street.

If the Halifax valuation only takes into consideration the price of houses in that postcode with similar characteristics (2 bedroom terraced house), then I don't think I will have a problem. If, however, the price history of this house I am looking to purchase is the main criteria for assessing the value of the house, then I am royally screwed.

I used the Halifax how price calculator on the website, using the previous sold price from 2007, and the value of the property is reduced by 20%. This means the fact that this house was sold for below its value in 2007 is not taken into consideration.

When the surveyor looks at previous valuation of the property do they only look at the actual sold price? That seems a little unfair as there could be a number of reasons for a sale below market value in the past.

I will get the results of the valuation in the coming weeks, I am just a little anxious.

Many thanks for any advice and sharing your experiences.

Div

brit1234

divlaw wrote: »

I used the Halifax how price calculator on the website, using the previous sold price from 2007, and the value of the property is reduced by 20%. This means the fact that this house was sold for below its value in 2007 is not taken into consideration.

2007 was the peak of the housing bubble so should be lower by about 20% unless you are central London.

If your valuation comes under your offer haggle a reduction. After all you don't want to overpay especially in a falling market.

divlaw

I understand that the value of properties has declined by 20% since 2007.

My problem is the price paid in 2007 was itself very low compared to what I think should have been its actual value. I looked at other almost identical houses on the same street which sold for considerably higher prices.

So the -20% is applied to the sold price, not what should have been its actual value in 2007.

bluedrop

brit1234 wrote: »

2007 was the peak of the housing bubble so should be lower by about 20% unless you are central London.

If your valuation comes under your offer haggle a reduction. After all you don't want to overpay especially in a falling market.

There is something so wrong....either nationwide/ Halifax indices are rubbish or people have gone mad. The numbers never match up here in bromley...look at this property
http://www.rightmove.co.uk/property-for-sale/property-22842708.html

Sold in 2006 for £250k....now asking £339k???

Halifax valuation says £230k....nationwide says £264k....
I am just so confused...zoopla says £323k!!

If I decide to buy this property, how will the bank do the valuation? Based on indices???

brit1234

What prices have surrounding properties sold for in 2012 not 2007?

You seem intent to overpay.

bluedrop wrote: »

There is something so wrong....either nationwide/ Halifax indices are rubbish or people have gone mad. The numbers never match up here in bromley...look at this property
http://www.rightmove.co.uk/property-for-sale/property-22842708.html

Sold in 2006 for £250k....now asking £339k???

Halifax valuation says £230k....nationwide says £264k....
I am just so confused...zoopla says £323k!!

If I decide to buy this property, how will the bank do the valuation? Based on indices???

Asking prices are 33% higher than actual selling prices ie
Av selling price £160k
Av asking price £240k

Plus zoopla valuations are the biggest joke in the industry.

divlaw

Last sale on that street was in 2008, for £90k. Other sales on that street in 2005 - 2008 were for around £100k.

But the house I am looking at was sold for £60k in 2007 even though it is really no different from the other houses on that street and it is very good condition.

So if the valuation is based on previous sold prices on that street, then I have no worries. If the valuation is based on the previous sold price of the house I am looking to buy then the valuation will be very low indeed.

£100k - 20% = £80k

£60k - 20% = £48k

Which is why I am worried about Halifax's valuation method

bluedrop

brit1234 wrote: »

What prices have surrounding properties sold for in 2012 not 2007?

You seem intent to overpay.



Asking prices are 33% higher than actual selling prices ie
Av selling price £160k
Av asking price £240k

Plus zoopla valuations are the biggest joke in the industry.

None sold yet in 2012 in that road....last sold was in jul 2011 for £300k....still this one is asking for £40k over it? I don't understand why....

I've decided to forget about this property.....hope I can find a sensibly priced one soon!

bluedrop

Oops! Sorry to hijack ur thread Divlaw!

divlaw

bluedrop wrote: »

Oops! Sorry to hijack ur thread Divlaw!

No worries, consider my thread your thread

brit1234

divlaw wrote: »

Last sale on that street was in 2008, for £90k. Other sales on that street in 2005 - 2008 were for around £100k.

Do your research, we have a huge host of tools at our dispossal. Look at other streets close by with similar style properties which sold in late 2011 and 2012. That will be your best indication.

Don't go on asking prices at all.

divlaw

OK. Thanks for your advice, mate.

I have been looking into this for a while, doing background research. I have noticed a price decline in the area in the last couple of years. A house on a street nearby sold for near £80k in 2011. So there has been a decline.

But the 2007 price paid for the house I am looking to buy is an anomaly as it sold for considerably less than other comparable houses.

Now if Halifax do a valuation that takes into consideration the average sold prices for comparable houses in the area in 2011/2 then I am not too worried.

It is only the previous sold price of this particular house that could screw me.

I have already had purchase price reduced, but the seller is not willing to go any lower as very similar houses are selling for higher prices on the same street and neighbouring streets.