Amended valuation - advice needed

DRP

sheramber wrote: »

If the valuer had come back with the lower valuation in the first place what would you have done?

just a hunch, but i bet if the extra space had never existed the valuer wouldn't have valued it at 10k less.

Given the selling price of what? 2-300k, an innacuracy of 10K is nothing really - i feel for the OP really, as valuation isn't exactly a science...

eddddy

sheramber wrote: »

If the valuer had come back with the lower valuation in the first place what would you have done?

I think the OP's complaint is that the valuer appears to have acted arbitrarily.

When a valuer values a property at the asking price, it generally means the property is worth at least the asking price.

So with or without the loft, the valuer may have valued the flat at the asking price anyway.

But because the valuer was told some time later about the loft (possibly weeks later, and possibly unable to recall much about the flat in question), rather than saying that didn't impact his valuation, he covered himself by arbitrarily reducing the value by £10k.

rainbow_carnage

DRP wrote: »

just a hunch, but i bet if the extra space had never existed the valuer wouldn't have valued it at 10k less.

Given the selling price of what? 2-300k, an innacuracy of 10K is nothing really - i feel for the OP really, as valuation isn't exactly a science...

eddddy wrote: »

I think the OP's complaint is that the valuer appears to have acted arbitrarily.

When a valuer values a property at the asking price, it generally means the property is worth at least the asking price.

So with or without the loft, the valuer may have valued the flat at the asking price anyway.

But because the valuer was told some time later about the loft (possibly weeks later, and possibly unable to recall much about the flat in question), rather than saying that didn't impact his valuation, he covered himself by arbitrarily reducing the value by £10k.

I'm absolutely certain that this is what happened. The asking price was £380,000. It's now been down-valued to £370,000. Had the asking price been £390,000, we may have bought it, anyway. Unlike the valuer, I think it's worth the money. We would've qualified for a larger mortgage, and our deposit would've only gone up by £1,500. Now it's gone up by £8,500.

We're first time buyers. It's taken us a long time to save up this money. We can't just magic-up £8,500. So either we lose the flat and the money that we've already spent on this process, have to find a flat to rent in the next few weeks, and start flat-hunting again in the new year, or we try to borrow the money from relatives. And all because the valuer, who probably spent all of two minutes in the flat, decided to arbitrarily down-value it by £10k.

Pixie5740

If your broker can find you another lender then they might value it at the original valuation amount.

rainbow_carnage

The vendor has agreed to meet us halfway and reduce the price by £5k. Now we only need to increase the deposit by £3.5k, which is doable.

Thank you for the advice and sympathy.

Keely_lewis

There are some sensible fair people out there. Good news all round. Good luck with the rest of your move.

macman

Fair result in the end.
On what basis were you purchasing with the 'possibility' of converting the loft space to a third bedroom though? That will require freeholder consent and of course they will expect a fee accordingly. That would apply whether the loft space was included in the leasehold or not, as such a conversion would still affect the roof and other parts of the freehold?

rainbow_carnage

macman wrote: »

Fair result in the end.
On what basis were you purchasing with the 'possibility' of converting the loft space to a third bedroom though? That will require freeholder consent and of course they will expect a fee accordingly. That would apply whether the loft space was included in the leasehold or not, as such a conversion would still affect the roof and other parts of the freehold?

We have planned and budgeted for the fees, though not for the purchase of the space. We haven't spoken to the freeholder, yet, but we're hoping he'll let us have the space for free in exchange for taking on the cost of maintaining the roof. The freeholder owns the downstairs flat. Right now the cost of all external repairs is split between the two flats. As long as we're doing the conversion, we can sort out the roof and the chimney stack that needs fixing. We'd still have to pay legal fees on both ends to amend the lease, but that's not that expensive.

eddddy

rainbow_carnage wrote: »

...
We haven't spoken to the freeholder, yet, but we're hoping he'll let us have the space for free in exchange for taking on the cost of maintaining the roof.
...

That would have to be a super-naive freeholder to do that.

Normally, I would expect a freeholder to do a calculation like this:

Current value of your 2 bed flat = £380k
Estimated value of the flat with 3 beds = £420k (for example)
Cost of conversion = £10k

i.e. £30k profit to be made.

Therefore, freeholder starts negotiation at £30k for lease of loft. Final agreed price is dependent on who's better at negotiation, and who's more desperate. (I'd guess between £20k and £25k).

But if it's an 'amateur' freeholder, or perhaps somebody desperate for cash, you might get a better deal.

rainbow_carnage

eddddy wrote: »

That would have to be a super-naive freeholder to do that.

Normally, I would expect a freeholder to do a calculation like this:

Current value of your 2 bed flat = £380k
Estimated value of the flat with 3 beds = £420k (for example)
Cost of conversion = £10k

i.e. £30k profit to be made.

Therefore, freeholder starts negotiation at £30k for lease of loft. Final agreed price is dependent on who's better at negotiation, and who's more desperate. (I'd guess between £20k and £25k).

But if it's an 'amateur' freeholder, or perhaps somebody desperate for cash, you might get a better deal.

Your calculations are a bit off.

The cost of a vellux loft conversion is closer to £20k than £10k. It will increase the value of the flat by £30k at most. We need the space for a music room, not a bedroom, so we're not going the dormer + en suite route, which would increase the value of the flat significantly (and cost £30-40k).

Sure, the freeholder could ask for £20k for the space. We can't afford that, so the conversion won't get done. The freeholder will get to keep space that he has no access to and, in the meantime, have to pay several thousand towards roof repairs.

We're not relying on the freeholder's naivety. It's a win-win. He saves money on repairs and doesn't have to listen to my husband's drum practice.