Lender Valuation if higher or lower?

tara2013

I have a shared ownership flat and I am planning to staircase to buy rest of shares in the flat.

My flat was valued by a chartered surveyor and the valuation was bit higher what I was expecting (or the sold prices of similar properties in my area).

I challenged that valuation but the surveyor did not change the valuation.

I then instructed another chartered surveyor and they have valued the property 10K lower than the valuation done by first surveyor (about 7.5% lower).

My landlord which is a housing association has also accepted the new valuation.

I need mortgage to buy rest of shares in the flat. My understanding is the mortage provider will also instruct another valuation and I am concern what will happen if the lender valuation is lower or higher than the offered/accepted price of the property?

I think my mortgage company will employ the same surveyor who valued my property first time.

tara2013

Any help please...........

tara2013

help please

Guest101

You have a case to be concerned, but unfortunately your lender will make the final decision. You could try multiple lenders (though this will cost you) and see if any valuation meets your second one. But the lender will go with their valuer everytime, sorry.

kingstreet

If the valuation is higher, the lender will use the "purchase price" as that is the lower of the two figures.

If the valuation is lower, you go back to the HA and see if they will reduce, as it's just one qualified surveyor's opinion over another's...

tara2013

If I understand it correctly...

If the lender valuation comes higher then effectively there is no concern as lender will go with the offered/purchase price?

If it is lower then I can further negotiate the price?

Windsorcastle

Surely the crucial thing is that the HA has accepted the lower valuation, which is what they will base the cost of your staircasing shares on? So it shouldn't matter what your mortgage company says. Wasn't the point of challenging the first valuation that you didn't want the property overvalued, which would then make your shares more expensive?

I have an equity loan on my property from a HA which I am also seeking to repay now I am selling up. I had to pay the surveyor to do a valuation but of course they are working for the HA so it is most likely that they will overvalue - therefore the HA overestimates how much your property is worth and hence how much you owe them.

So, well done for getting the lower valuation accepted, but the HA don't need to know what your mortgage lender values it at, do they?

monty-doggy

My understanding is the mortgage company wouldn't value it more than you offer.

tara2013

I challenged the first valuation with comparable evidence that it is over valued but it was not accepted.

My local estate agents also pointed out this is bit higher valuation.

Then I paid for another valuation and it was 10K lower the first one.

I am not sure if vendor have access to lender valuation.

kingstreet

Only if you provide it to them.

If it's lower than the price you've agreed, they have the option to renegotiate with you but there is no guarantee they will reduce the price.