Challenging a valuation

mungobella

I was wondering if anyone could give any advice/insight into our situation. We had an offer accepted on a property a couple of weeks ago for £225,000. The valuation (Countrywide Surveyors, Nationwide mortgage) came back on Monday at £207,000. I am fairly certain the valuation is incorrect, as the house next door, which is exactly the same style, sold for £245,000 in late January, and one round the corner that is very similar sold for £245,000 last October; all the houses in this neighbourhood are 1930s semis (a couple detached), some with fourth bedrooms built over the garage. The only one that's sold for less than £230,000 in the last eight months was clearly an estate property, with massive amounts of work to be done. And, before someone asks: yes, these are sold prices, not offer prices. I've even downloaded some of the land registry title documents.

I am trying to appeal the valuation with Nationwide. According to their form, in order to appeal I need 2 comparable properties in the last 120 days. The house that sold at the end of January is the last comparable in this immediate vicinity. There are a few houses that have sold in the larger neighbourhood, but this cluster of streets tends to be more expensive, as the houses are just a bit nicer and it is a bit closer to the university/city centre. I asked the estate agent if she could find me two comparables in the last 120 days; she gave me a list of three properties that had "sold" but not completed yet. She said she thought Nationwide would accept these, but I'm not so sure.

Is anyone familiar with how these appeals work? Is it worth putting down the next door property, even if it is out-of-bounds, date-wise? I think it is unlikely that the vendor will budge on price, especially if we haven't gone through the appeals process.

Thrugelmir

What was the original asking price of the property ?

sockpuppet

Why are you challenging it if you are the buyer? If the vendor wants a higher valuation then they shoud be the ones pushing the valuer to increase it. You surely dont want to pay more than it is worth? so it is in your interests to let the vendor do all the work and when the valuation does not get increased (they very rarely do) you can negotiate on the price

holly_hobby

SP is on the money ...

The surveyor has valued the property for mortgage purposes at 18k less than the opinion of the estate agent/vendor.

Your mortgage lender will now base their advance upon the valuation of 207k.

This is your opportunity to re-negotiate the purchase price accordingly.

If the vendor won't budge, and you steadfastly want the property, you will need to fund the difference from your own capital.

Be aware though, that if you buy at a figure more than the curent market valuation of 207k, you would technically and initially be in a negative equity situation before you've even unpacked the kettle ... (i.e you paid more than its market value) - which to be fair would only affect you if you sought a remortgage or sale, before the property had a chance to increase in value (which may or may not occur in the short to medium term).

Even if the Vendor is happy to pay for an independent survey (surveyor must be on the lenders panel), and your prospective lender is not duty bound to accept or even consider its findings ... unless it was down valued again of course ....

Best advice .... start the renegotiating ... you need the best deal to protect your own financial interests, not someone else's.

Others will be along with comment

Hope this helps

Holly

robatwork

Submit the valuation to the EA and ask them what they propose to do about it.

Or instruct a new building society who will use another surveyor.

You're in a strong position to get a hefty discount now, why so keen to push the "price" back up?

The_Surveyor

Appeal - the best evidence is the most recent. Provide the evidence of the property that has just gone Under Offer (sale agreed). If you can get confirmation that the property under offer has already been valued up to the sale price better still - Best of all if you can demonstrate that it was the same firm of surveyors that carried out the valuations.

Something that has exchanged or completed is always stronger evidence - than that simply under offer.

Provide all market evidence of Sales completed and Under Offer - but not those currently on the market (this will go straight in the bin - it doesn't prove anything and no one is even going to look at it - trust me on this).

Do not provide evidence of anything more than 6 months old - ideally within the last 3 months.

If your evidence is more recent than that of the valuer/surveyor you should win your case.

Subject to: age, type, location, size and condition of the property. (ie Is there a petrol station or public house next door).

Dave_Ham

I am not so confident, my client experiences suggest that they hardly ever overturn a panel valuation.

Put in on the Estate Agents desk and ask them what they are going to do.

If the vendor will not budge and you absolutely want the house, you will have to do a deal on who pays and apply for another mortgage with another provider.

Good luck

harvey115

I also do not think it would be best to waste all the time to get the decision overturned. It is highly unlikely.

holly_hobby

The_Surveyor wrote: »

Appeal - the best evidence is the most recent. Provide the evidence of the property that has just gone Under Offer (sale agreed). If you can get confirmation that the property under offer has already been valued up to the sale price better still - Best of all if you can demonstrate that it was the same firm of surveyors that carried out the valuations.

Something that has exchanged or completed is always stronger evidence - than that simply under offer.

Provide all market evidence of Sales completed and Under Offer - but not those currently on the market (this will go straight in the bin - it doesn't prove anything and no one is even going to look at it - trust me on this).

Do not provide evidence of anything more than 6 months old - ideally within the last 3 months.

If your evidence is more recent than that of the valuer/surveyor you should win your case.

Subject to: age, type, location, size and condition of the property. (ie Is there a petrol station or public house next door).

I'm not sure if you are aware this is a PURCHASE not a remortgage situation.

The above would be relevant and helpful guidance to the OP if this was a RMG. Of if applied to the Vendor for them to take on board - notwithstanding, the lender does not have to accept the request for subsequent valuation or challenge.

As already said, on a purchase, the original valuation is vary rarely discarded by the lender - unless there is strong evidence that he was negligent in the initial assessment/valuation of the property.

Best advice is for the OP to use downvaluation as a negotiation tool, or accept the valuation and fund the difference from their own capital.

To which the EA should be assisting in the mediation of a deal between the 2 parties.

Hope this helps

Holly

SouthCoast

This is a Money Saving site.

Phil_rich

Dont ask for another valuation! Go back to the EA and tell them you want the price dropped as the mortgage valuation does not stack up. If it doesn't work for you the next person who tries to buy could well get the same answer.

Get on the phone and knock the 18k off.