Home Valuation Horror Stories - Help?

flickeringmuse

Hi guys,

I've been hearing horror stories about mortgage lenders undervaluing houses by a large amount. The home valuation is going to be carried out on the property we're hoping to buy and I'm getting increasingly worried that they're going to undervalue it, meaning we potentially lose it. I think the house is well worth the money, considering we've seen similar properties in the area for a lot more money.

Are lenders undervaluing properties a common thing?

dryhat

If the valuation comes in lower than the asking price that is a good thing not a bad thing.

Why would you want the valuation to be high?
Having a bigger mortgage doesn't make you richer you know.

Mallotum_X

Its more common for sellers to over value...

flickeringmuse

No I mean the property we're buying may be undervalued, meaning we wouldn't have enough money to afford the house.

And yes, I'm well aware a bigger mortgage doesn't make a person richer.

googler

If they undervalue it, that means you renegotiate the price to the lower figure, and that's better for you.

If the seller rejects this, all you need do is point out that if your surveyor is undervaluing it, it's very likely that if they reject your offer and move on to another buyer, that their surveyor and others will likely undervalue it too .....

dryhat

flickeringmuse wrote: »

No I mean the property we're buying may be undervalued, meaning we wouldn't have enough money to afford the house.

And yes, I'm well aware a bigger mortgage doesn't make a person richer.

If the house you are buying is valued lower than the asking price, how will you then not be able to afford it?

googler

flickeringmuse wrote: »

No I mean the property we're buying may be undervalued, meaning we wouldn't have enough money to afford the house.

Don't follow - surely the lower it is valued, the easier it will be for you to afford it? If you have the deposit in hand for a mortgage at a higher figure, you have even more of a deposit when the house is valued lower?

flickeringmuse

googler wrote: »

Don't follow - surely the lower it is valued, the easier it will be for you to afford it? If you have the deposit in hand for a mortgage at a higher figure, you have even more of a deposit when the house is valued lower?

Yes but what if the vendors don't agree that the house is worth less?

yippeekiyay

The valuation is usually about right. However, surveyors aren't magicians, they will put a value on the house in the same way anyone else will (previously sold prices etc). In some instances they overlook things (especially if they don't know the area well) and get it wildly wrong.

antrobus

flickeringmuse wrote: »

....I've been hearing horror stories about mortgage lenders undervaluing houses by a large amount....

Mortgage lenders don't value houses. They pay other people to do it for them.

flickeringmuse wrote: »

..... I think the house is well worth the money, considering we've seen similar properties in the area for a lot more money.....

Yes, but you're going to use someone else's money to buy it. So don't be surprised by the fact that the someone else concerned will ask for an independent view on the matter.

dryhat

flickeringmuse wrote: »

Yes but what if the vendors don't agree that the house is worth less?

Then they can hold on and hope another valuer sees things differently.

Think of the low valuation (if it even happens) as a good thing and in the meantime keep looking at other houses and don't get fixated on just one.