Mortgage valuation lower than agreed sale price - FTB

amnblog

Let us know how you get on Suski.


Useful learning for other forum users.

md87

nubbins wrote: »

They maybe more qualified but definately not necessarily more accurate. I have tested this in having a remortgage valuation coming in at 30k under what I and estate agents thought, I did not go through with the remortgage and sold the property not long after at just under the price what I and the EA thought. They undervalue all the time to cover their backsides.

Agreed. By all means use the lower valuation to attempt to re-negotiate, but if not then decide yourself if you are willing to pay the agreed price. If I had listened to surveyor would not have made thousands in equity in 4 years or so. And those that are saying pull out etc, if you proceed like that its easy to go round in circles, never move or get a property, and throw thousands down the drain for surveys and solicitor costs etc.

adindas

md87 wrote: »

Agreed. By all means use the lower valuation to attempt to re-negotiate, but if not then decide yourself if you are willing to pay the agreed price. If I had listened to surveyor would not have made thousands in equity in 4 years or so. And those that are saying pull out etc, if you proceed like that its easy to go round in circles, never move or get a property, and throw thousands down the drain for surveys and solicitor costs etc.

Very good point.
I have made people aware about this numerous times ....
Unless the surveyors are naive people they will always undervalue the property if they are working for the buyers/lenders.

The intention is to put off the buyers/lenders. If the sale does not get through they will carry no risk at all but they will still get the same amount of fee. So why take unnecessary risk ??? This is of course will need to be balance with professionalism. But professionalism is a subjective matter and so does the valuation.

If I was the buyer I will use my surveyor estimate price as a tool to renegotiate. But if the seller does not budget I will do my own research of the sale price of similar property and take it from there.

shortchanged_2

adindas wrote: »

Very good point.
I have made people aware about this numerous times ....
Unless the surveyors are naive people they will always undervalue the property if they are working for the buyers/lenders.

The intention is to put off the buyers/lenders. If the sale does not get through they will carry no risk at all but they will still get the same amount of fee. So why take unnecessary risk ??? This is of course will need to be balance with professionalism. But professionalism is a subjective matter and so does the valuation.

If I was the buyer I will use my surveyor estimate price as a tool to renegotiate. But if the seller does not budget I will do my own research of the sale price of similar property and take it from there.

Yes, but a lot of people aren't able to make up the difference if the mortgage valuation is lower.

The surveyor is working for the lender and it certainly is not in the lenders interests to overpay for property.

So I'm doubtful that surveyors play games, surely it is in their interests to give an honest valuation. Yes they may well air on the side of caution but that is sensible. I bet the people that are in negative equity are cursing surveyors for the opposite reason. At the end of the day surveyors are not economic forecasters and can only really give a real time valuation and not speculate about future prices.

stator

If the surveyors under valued every property the lender would soon cotton on that they were losing business and find a different surveyor
They do give honest but conservative valuations

suski1

Hello All,

Bit of an update which has resulted in further questions..

I attempted to re-negotiate the price with the seller with no joy. Seller refusing to budge.

I obtained a damp and timber report as per lender requirement and have been told that there is some very minor damp behind one of the units in the kitchen. Nothing like the £2k the valuation quoted.

I have attempted to dispute the valuation by providing lender with list of 15 properties within .5 mile that have sold for asking price and over. I belive the property has been severley undervalued. The comparable properties the lender used were mid terraced, non extended properties - the house I am looking at is a large corner terrace with a downstairs extension.

I am now considering my options - I still want to purchase the property and I'm happy to pay the £155k. How does this work??

I have been told that the undervaluation will not affect my loan (which is £100k) I am now hoping to put down £50k on the £147k which means I need a £97k mortgage. I will then use £8k to mak it up to £155k. Is this allowed? Does it affect the seller? or their EA?

Thanks in advance

LeoTLion

Have you considered getting a surveyor of your own to look at it?