Mortgage house valuation nightmare

MAFERGAL

Our dream house had been on the market for 6 months, the asking price £320,000. It was reduced down to £280,000. We put 2 offers on the property, the second of 278,000 was accepted and everything was going smooth and on track for a fast completion until the mortgage valuation.

It came back valuing the property at £235,000 which both the estate agent and vendor would not accept, basically saying this was wrong. This valuation was conducted by an independant valuer who went inside the house as part of the valuation etc.

We really want the house and would love to get it at the valued price but we do understand the vendors point of view as they purchased it for £230,000 in 2006 and since then have almost doubled the size of the house with the addition of an extra large living room, 2 bedrooms and an en-suite. They have also refitted the kitchen and main batroom. Not taking this massive improvement into account the Zoopla estimate is down £10,000 from their purchase price to £220,000

We have asked for the valuation to be 'justified' (not sure if that's the correct terminology) as the valuer stated 'priced high compared to other properties in the area', but we have looked and that doesn't appear to be the case. Unless he is comparing it to other 2/3 bedroom properties in the area (this is now 5 bedroom).

If this valuation is justified, the estate agents want another valuation done but the vendors wont agree to pay anything towards this. The estate agent also suggested we change mortgage providor? This confused us as it's not us that has been refused but the property and it was an independant valuer, not the building societies.

Our dilemma is this, we pay another £400 for a valuation that comes back in the same region and the vendors refuse to sell at that price. If the estate agent has over valued the property, they have forced us into this position and we will be almost £2000 down (solicitors fees, mortgage fees, 2x valuations) with nothing to show for it, through no fault of our own.

We have offered £249,999 to the estate agent but they were very flippant and it was clear they had no intention of passing this information on to the vendors.

If we pay for a second valuation and the sale falls through because the vendors will not sell at the valued price (or our offer of £249,999), do we have any rights with regards to gettting the valuation fees/part of refunded? If the estate agent has over valued the property then it's impossible to get a mortgage for the asking price (75% LTV) and we never had a chance of getting the mortgage.

At the same time, how likely is it that the valuer has got this wrong and made a mistake? It's a 5 bed property, 2 are on the ground floor in an annex with a seperate shower room. So could he have dismissed these bedrooms and compared it to 3 bed properties in the area?

Any advice greatly appreciated on this messy situation.

nrsql

Could be that the property has been improved beyond the expected cap for the area.
Doesn't help but I think it's up to you what you want to do. The vendor refusing to contribute to a survey might mean they suspect what the result will be.

Yorkie1

Assuming the valuation was done by the lender's valuer, I'd have thought they are unlikely to accept a second valuer's opinion - although it might be worth contacting them to ask. There's no point in paying out for a new valuation if it will make no difference to your lender.

The reason the EA is suggesting you change mortgage company is because a different lender might use a different valuer - no guarantees though, and why should you be further out of pocket (probably with mortgage application fees) because of this?

The usual response on here is that the valuer is doing you a favour as the buyer, by preventing you from unwittingly paying more for the house than it's worth.

I suspect you will find that your lender will not accept another valuation, and will only offer to lend you 75% of the revised value, leaving you to decide whether to make up the balance between their offer and what you have agreed to pay - or to chance your arm with a different lender (with no guarantee of a different outcome).

To answer your specific question, no you won't get any money back if the EA has got the initial asking price so wrong.

brit1234

Maybe the seller way overpaid for the house when they bought it in 2006.

MAFERGAL

Thanks for your responses. It was an independant valuation, not the lenders own. When I spoke to them re. the justification and concerns of the valuation they said I could have another independant valuation done at an additional cost of £400.00

DVardysShadow

MAFERGAL wrote: »

...
We really want the house and would love to get it at the valued price but we do understand the vendors point of view as they purchased it for £230,000 in 2006 and since then have almost doubled the size of the house with the addition of an extra large living room, 2 bedrooms and an en-suite. They have also refitted the kitchen and main batroom. Not taking this massive improvement into account the Zoopla estimate is down £10,000 from their purchase price to £220,000.

.....

At the same time, how likely is it that the valuer has got this wrong and made a mistake? It's a 5 bed property, 2 are on the ground floor in an annex with a seperate shower room. So could he have dismissed these bedrooms and compared it to 3 bed properties in the area?

It looks to me like your valuer has just looked at zoopla or a similar site and taken the value off that rather than undertaking a true valuation. Having said that, an extension from 3 to 5 beds is nearly an extension too far and will never be the equivalent of a house which was 5 beds from the start. And while a 5 bed will attract a premium over surrounding 3 beds, there is a ceiling for a locality which an extension to 4 beds will nearly match.

I suggest you discreetly arrange viewings with another agent of true 5 beds to get the point about this one probably not matching up. 2 of the bedrooms being downstairs will definitely knock this property back from a true 5 bed. I think it might be more accurately considered as a 4 bed with an extra reception or study.

MAFERGAL wrote: »

... We have asked for the valuation to be 'justified' (not sure if that's the correct terminology) as the valuer stated 'priced high compared to other properties in the area', but we have looked and that doesn't appear to be the case. Unless he is comparing it to other 2/3 bedroom properties in the area (this is now 5 bedroom).

If this valuation is justified, the estate agents want another valuation done but the vendors wont agree to pay anything towards this. The estate agent also suggested we change mortgage providor? This confused us as it's not us that has been refused but the property and it was an independant valuer, not the building societies.

Our dilemma is this, we pay another £400 for a valuation that comes back in the same region and the vendors refuse to sell at that price. If the estate agent has over valued the property, they have forced us into this position and we will be almost £2000 down (solicitors fees, mortgage fees, 2x valuations) with nothing to show for it, through no fault of our own.

If the initial valuation was wrong, of course you should be paying for the new valuation, because it was your valuers who got it wrong .... the vendor has no need of the valuation - it is your problem, because you need it in order to borrow the money. Other potential buyers may not need a higher valuation to be upheld because they may have enough funds.

MAFERGAL wrote: »

Our dilemma is this, we pay another £400 for a valuation that comes back in the same region and the vendors refuse to sell at that price. If the estate agent has over valued the property, they have forced us into this position and we will be almost £2000 down (solicitors fees, mortgage fees, 2x valuations) with nothing to show for it, through no fault of our own.

Your vendors don't have to take a blind bit of notice of your valuation. Being £2000 down is entirely your own responsibility. You could have had the place valued before you offered and made your decision then, which would have left you just owing a valuation fee- and this could have been money well spent. It does not wash to blame the Estate Agent. Their job is to get the best price for the seller. So if you ro your professional advisers thought the price was too high, you could have offered lower.

cattie

First of all don't take any notice of Zoopla valuations. In most cases they are way out and seem to have plucked figures from thin air.

Does the valuer you used know the area that the house is in thoroughly? As if he is from out of the area, it could be more of a guesstimate.

A few years ago I was selling quite a unique property, so very difficult for a valuer to find comparibles. I felt house was very competively priced and it sold very quickly. Anyway, buyers valuer came back with a valuation of £10k under agreed price.:eek:

Buyer was distraught as she dearly wanted the house and obviously I wasn't willing to drop my price by a further £10k as I felt a different surveyor would value very differently. Anyway, buyer's parents came up with the extra £10k as they too felt the house was worth the price that I'd accepted at. So everything turned out right.

I see your problem as being if you can't come up with more money, the vendors will put house back on market. A different valuer could come up with a sum much near the asking price. I know some ea's overvalue, but not usually by that much on a mid priced house, as they at least do know the local market. If it were me I'd be more than willing to pay for the 2nd valuation if I really wanted to try to buy the house.

propertyman

As posted above, this is known as the "biggest house in the road".

While it might offer the same accommodation as a similar house in a road with houses of that size nearby, and has the advantage of the extension being recently built and a modern spec, it rarely attains a similar value as those other properties.

I suspect that an error is more likely the expectation of the owner and the listing by the EA, that it should be priced in line with the other road, not where it actually is.

1: Look at other 5 beds in the area as to price

2: If you can proceed without the full loan then get a second valuation from a local experienced chartered surveyor.

MiniSis

I've just bought a 2/3 bed terraced house and am paying £140,000 for it. It needs work and will be worth a little more. Next door is also up for sale but they have turned it into a 4 bed house with a lift conversion. Problem is they've literally sliced 1 bedroom in half to make 2 bedrooms you can just fit a double bed in and nothing else. So it's really only a 2 bed. It went on at £190k and has just been reduced to £185k. Not worth that in a million years!!! Vendors expectations are too high. They've tried to concert a 2 bed mid terrace into some massive family home and it's failed. Seems similar to your story!!

ruggedtoast

This is the problem some of my family has. They've spent years converting their 2 bed into a much larger 3 bed but the valuations just arent coming in at much more than the other 2 beds on the estate.

They were actually quite shocked with the values they were given because they were looking on Rightmove at "true" 3 bed properties in other streets and thought theirs would be the same.

MAFERGAL

MiniSis wrote: »

I've just bought a 2/3 bed terraced house and am paying £140,000 for it. It needs work and will be worth a little more. Next door is also up for sale but they have turned it into a 4 bed house with a lift conversion. Problem is they've literally sliced 1 bedroom in half to make 2 bedrooms you can just fit a double bed in and nothing else. So it's really only a 2 bed. It went on at £190k and has just been reduced to £185k. Not worth that in a million years!!! Vendors expectations are too high. They've tried to concert a 2 bed mid terrace into some massive family home and it's failed. Seems similar to your story!!

Thanks for your response. I understand what you mean but I think this is a little different. I feel the house is worth what I offered. I've spent a year researching and looking at houses (so I've seen plenty where extra rooms have been created from cupboards etc. I wouldn't have made the offer unless I thought it was a good deal for me.

The vendors have made existing rooms bigger if anything. The smallest room is 3.7m x 3.1m, the other rooms are all large double rooms.