Surveyor Undervaluation

sandyacreuk

Hi,

Cutting a long story short. I need to unlock equity in the form of a second charge, from my property, as the perfect option to resolve short term financial difficulties.

Marketing valuations from several estate agents, all the on-line pricing tools and price index sites state almost the same value. A perfect amount to get finances back in order. However, my Mortgage company surveyor has priced my property at nearly £100K less!!!.

I've found local, recent property sales as comparable and submitted them, but the Mortgage Company just asks the original surveyor his opinion, and guess what? Of course, he stands his grounds.

They also refuse to accept private surveyors reports.

This is a diabolical situation, where all evidence states there is equity, but I cannot get a second charge as the undervaluation results in a wildly inaccurate LTV.

Any thoughts / advice?

amnblog

It is rare for a valuation appeal to be successful. if effect you are asking a professional valuer who puts prices on local property every week of the year to admit they are wrong.

I suspect you need to re-think your expectations and calculations.

Thrugelmir

sandyacreuk wrote: »

Cutting a long story short. I need to unlock equity in the form of a second charge, from my property, as the perfect option to resolve short term financial difficulties.

Then the valuation performed on behalf of your current lender may not be your only issue.

While a £100k sounds a lot. What this in relation to the properties selling price at the optimum level.

sandyacreuk

The difference represents approx 30% of the expected value of the property - £100K difference, quite simply, cannot be right.

Responses defending the valuation are weak too, and I can counter each one (as I have done).

It would appear that his word is the last, regardless of outstanding evidence to the contrary.

Goldiegirl

The valuer was doing a valuation for mortgage purposes, not a market valuation. A market valuation is the price you'd use if you put the property on the market, and is likely to be a 'full' figure. A figure that you'd use to start with, but might agree to a lower offer.

A valuation for mortgage purposes is what the lender might expect to sell the property for in the event of of repossession, and is likely to be a conservative figure.

Also, homeowners are often optimistic about the value of their own house.

When I worked for a lender, from time to time the valuer agreed to amend his valuation if compelling evidence was provided to support a higher valuation figure.

As you say, he has the last word, so if he won't change the figure, he can't be forced to do so.

sandyacreuk

GoldieGirl - The RICS definition of "Market Value" is;-

MARKET VALUE (MV)
The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.

The report carried out is a standard (2 pager) Market Value Report.

If the surveyor has priced the property in terms of a recovery value for the bank, then it should have said so surely. I cannot see how an MVR can mean two different things. One thing is for sure, the valuation does not match with RICS definition. I would therefore conclude either this is a mistake or illegal.

Of course, Estate Agents will overprice, and thats taken into account. Even with say £10,000 discount to an agreed price, the valuation difference is still huge.

To frustrate me even further, the overall lending would still be subject to LTV of 80%. So my mortgage plus the second charge is still quite a way off what the agents expect to sell for.

somethingcorporate

Can you not remortgage elsewhere?

Thrugelmir

sandyacreuk wrote: »

If the surveyor has priced the property in terms of a recovery value for the bank, then it should have said so surely.

The valuation has not been prepared for you but for the purposes of the lender. The surveyor could therefore have been instructed to value on the basis of "X". As the purpose of your application is not a mortgage to purchase but a release of equity for other purposes. Which must be a factor in the underwriters mind when processing the application.

dimbo61

The last two properties sold on my estate went for £270/275K
I had my property valued by 2 RICS surveyors over the last two years in 2010 and 2012 and both said £250K in 2010 and £270K in 2012.
So my own lender told me six weeks ago it was worth £227K on there deck top valuation.
We paid £245K in 2005
Go Figure !!

amnblog

sandyacreuk wrote: »

It would appear that his word is the last.

Correct

This is not about what your property may sell for or not sell for.

It is about the lender being confident that there is sufficient security based on their requirements.

kingstreet

Is this valuation being done for a second charge/secured loan, rather than a mortgage?

In which case the basis of valuation may be different.

Google "90 day" and "forced sale" valuations.