house undervalued.

myright

A friend of mine has try to obtain a mortgage. The bank did a scheme 1 survey. The house was undervalued by 15k.

What can my friend do? Can he contest this? If so how?

ACG

Ask what the lenders procedure is to appeal the decision - usually it is to find 3 similar properties that have sold within 6 months that back up what your purchase price is.

However they could renegotiate the pruchase price?

Landofwood

Your friend overvalued it by 15k.

Unless I'm mistaken and your friend is better qualified at valuing houses than a surveyor.

dunstonh

The house was undervalued by 15k.

Houses dont have a price tag. They are priced by opinion. New Houses cost more and estate agents typically over value a house based on expectation that people will knock the price down. So, it could be your friend has over valued it.

safestored4

The lenders are putting their money at risk, and are perfectly entitled to accept the valuation of the professional hard headed surveyer rather than that of the misty eyed prospective buyer. He can ask for the matter to be reconsidered, there is no right to contest their decision.

Thrugelmir

myright wrote: »

What can my friend do? Can he contest this? If so how?

What feedback did the surveyor give?

What LTV mortgage is being applied for? The higher the % the more likely a conservative valuation.

pjread

Also what's the purchase price - 15k valuation difference should concern you off a 100k purchase, but maybe it'd be valid to "not really care" on a £1m purchase.

Unless in the latter category with the cash to cover the decrease in available lending & in love with the property, I'd be pushing back with "The survey came back at X, so that's all I can get finance based on. Would you be ok to proceed based on that price?". I expect it's more likely than not any other potential buyer would hit the same issue.