Timing of a property valuation when getting a mortgage

Hackling

Good evening all,

Hopefully somebody can help me.

I am the joint owner of a property following the death of my grandmother. The other joint owner and executor of the will has arranged to sell the property which is close to completion. The proceeds will then be distributed to beneficiaries of the will (myself and the executor).

The property was valued 2 years ago and the valuation at that date is the purchase price for the purchaser who had a mortgage application approved in January 2014.

I am concerned that the value of the property has increased over the last 2 years and that an unfair purchase price is being used. Incidentally, the purchaser is his son.

My question is as follows: When the purchaser had his mortgage application approved, would the mortgage company (Halifax) have valued the property again or would they simply just lend the amount that the purchaser requested?

Many thanks

davidmcn

Hackling wrote: »

My question is as follows: When the purchaser had his mortgage application approved, would the mortgage company (Halifax) have valued the property again or would they simply just lend the amount that the purchaser requested?

Lenders (almost) always work from an up to date valuation.

Okydoky25

The valuation would be to make sure it is worth what they want to borrow. They don't care if it is worth more only less.

You say close to completion. Have contracts exchanged? If not get your own valuation.

Hackling

No, contracts have not been exchanged yet.

I did ask for another valuation to be done but they have just carried on using the old valuation and are trying to push it all through quickly. No doubt they are aware that property prices have increased.

Okydoky25

I would seek legal advise and fast. I would assume the sale can't complete without your agreement tho?

Hackling

I believe the sale can complete without my authority as I am not the executor of the will, only a beneficiary. I do believe I can contest the sale though which could stop it going through.

The property is in Milton Keynes and was valued at £115,000 2 years ago. I am not sure how much the value will have increased since but it all counts.

Okydoky25

Have you checked recent sale prices for similar properties in the area?

Hackling

Not a lot has sold nearby recently although a bit of online research shows that property values in the area have increased by nearly 8% over the last 2 years.

I am thinking of giving the CAB a call tomorrow.

davidmcn

Okydoky25 wrote: »

The valuation would be to make sure it is worth what they want to borrow. They don't care if it is worth more only less.

Only if there were banks happy to risk 100% mortgages these days!

The mortgage valuation will tell them the valuer's opinion of the open market value, irrespective of the amount being lent. It would do no harm for the OP to ask for a copy of the Halifax's valuation, since the purchaser should have one with the mortgage offer. Although the OP won't strictly speaking be able to rely on it, it will be as good an indication as any of the value, unless they want to commission their own valuation (or try to persuade the executor to do so).

kingstreet

The lender's surveyor does not actually value the property.

He merely agrees or disagrees the agreed purchase price represents reasonable value that the lender could recover in the event of repossession and that the property is suitable security for the amount being borrowed.

An Executor is obliged to obtain the best possible value for an asset of the estate. If he is selling the asset to his relative, there would appear to be a serious conflict of interest here.

Hackling

These are really helpful answers. Thanks

Would getting legal advice be my best bet now? I am not sure, that as a beneficiary, I have the power to force another valuation to be carried out.