Homebuyer Report

jrsga

Hello

I had a HBR report carried out recently on a house I am trying to buy.

Is it sheer coincidence that the house has been valued excatly the same price as the offer that was accepted?

How accurate is this? How closely does the valuer work with the lender?

Is the valuers opinion more respected than an Estate Agent? In my opinion yes, they do it for a living and surely one would trust his/her opinion more than an estate agent?

If the lender knows the property is worth far more (this case LTV is 30%) than it is lending they are not really that bothered are they?

thanks

Chanes

Most properties I've bought have agreed with the price we were paying for it. Exactly the price too.

G_M

The Valuer works for the lender. His job is to reassure the lender that lending on the property is a safe risk. He knows how much is being lent and how much is being paid.

If he thinks the lender's money is safe (ie if the property were repossessed the lender could get their money back) he will value the property at the sale price. This is what commonly happens.

If he thinks there is a risk (ie the property is worth less than the sale price so the lender might not get their money back) he'll value it below the sale price.

It is very rare (almost never) for the property to be valued above the sale price (since the lender does not care - they'll get their money back and that's all that they want to know.

So this is not a true valuation (you could pay a surveyor for one if you wished). It is a mortgage valuation. Not the same thing!

jrsga

thanks for replying.

This seems immoral in that you say it commonly happens. Firstly what is the point of putting a "valuation" figure on there if it is not accurate - One is paying 500-600 for an HBR.

So you are saying you have to pay for a surveyor to get a TRUE valuation?

jjlandlord

The value of a property is the price someone is willing to pay for it and that the owner is willing to accept.

At the moment that is the price that you and the seller agreed. As long as the surveyor does not think that this is not an outrageous price or unless he finds a serious issue, it is therefore the new value of the property.

No, for a mortgage valuation the surveyor will not really value the property as such but check whether it is good security for the loan.

Surrey_EA

jrsga wrote: »

thanks for replying.

This seems immoral in that you say it commonly happens. Firstly what is the point of putting a "valuation" figure on there if it is not accurate - One is paying 500-600 for an HBR.

So you are saying you have to pay for a surveyor to get a TRUE valuation?

What G_M says is entirely correct.

I'm not sure why you would consider it immoral. The mortgage valuation is really for the lender, not the purchaser.

A homebuyer report covers far more than just an assessment of the property value.

Establishing the value of the property is very much art, rather than a science, a combination of what a buyer wishes to pay, a seller wishes to accept and how much a bank is willing to lend.