Valuation- What do they look for?

shakey999

Okay, so we've had an offer accepted for a spacious 3 bed house £7000 less than the asking price. The property is a repo and we have been moving fast to reach the exchange of contracts. The valuations in a couple of days.

The property will need a lot of work, and my mum has generously offered to gift us some money to fix. There are no carpets/underlay, some windows need replacing, no furniture, all rooms need a paintjob, kitchen needs units. Bathroom needs some work but has toilet/sink and bath tub. There is a very very small amount of mold in the corner of one bedroom, most likely surface.

Out of these things, what will devalue the property, or is it all these things. Secondly, what if the valuation comes 5k lower than price accepted, what are my choices?

Thanks, we are new to this.

Dave_the_Ginger_Cat

All will decrease the value as they make it less marketable, and harder to shift in a sluggish market. Not sure you'll get a high loan to value against this unless it's truly superficial

The only warning sign I saw in your description was the kitchen. To get a mortgage, you'll need a functioning kitchen, so a sink and fittings for a cooker. You don't need units, but it helps!

If the valuation comes in lower, you can negotate with the seller. It's the lower of the val and purchase price which the lender will take into account. If you agree a higher price than the val, go careful and truly consider how much you want it - it's going to be a lot of work

holly_hobby

Superficial things such as dated decor, no fitted kitchen, no central heating, no carpets and a 1970s bathroom won't result in a retention - but you won't get a top valuation due to its dated interior.

The property however must be in a habital and therefore mortgageable conditon, so we are looking for signs of any ongoing structual movement or roof damage, damp & timber issues (of which the mould you mention will require investigating), a functioning kitchen and bathroom (ie working plumming, bathroom sanitary ware and kitchen sink & cooker points), sound electrics (ie not outdated).

If the valuation comes in lower than the agreed purchase price, then you can use this to renegotiate the purchase price.

If it comes in with a partial retention, for non-essential works, then either the vendor completes the works pre completion, and you have the property re-inspected OR you fund the retention amount yourself and choose whether you wish you have the works completed and reinspected within 6 mths of completion, to have the retention moneys released.

A full retention, says what it is on the tin, the lender will not release any monies, until the noted essential works have been completed and re-inpsected. In this case you would need to fund entire pch fron your own funds, again within 6 mths have works completed to apply for drawdown of retained funds. OR, you have the vendor complete the essential works pre completion, re-inspected and then proceed to completion as normal.

Hope this helps

Holly