Low valuation - mistakes on report

purple321

Got a mortgage valuation report that has valued house lot less. However the report seems to have mistakes but the bank didn't seem that bothered by it! It is a shared ownership new build, finished either last year or end of 2014 but never been lived in - the report says new build - no. But I was under the impression its still a new build because noone has bought it or lived in it even though its not recently built new build so to speak. It says approx year of construction 2007 so way off. It says bath/shower rooms 1 Total int. wc 1 now i'm not sure what int. means (interior?) but there are 2 wc, one bathroom upstairs and one wc with sink downstairs so surely that is wrong?

So basically they are valuing it as a 9 year old not new build with one bathroom when it is a 1 or 2 year old max new build with 2 bathrooms! So surely those things are going to have had an affect on the valuation. Can someone more knowledgeable than me confirm that these are indeed things that need correcting?

G_M

Use the valuation to negotiate a cheaper purchase price.

purple321

Aren't the housing association just going to look at the valuation and say its wrong though cos the details are wrong? They're not going to come down to the supposed value - they value it as 45k for 50% share (90k for whole house) when the asking price is £57,500 (115k for whole house).

davidmcn

The valuer will have valued the flat they viewed - I doubt that any corrections to the year of construction or the number of toilets will cause them to amend the value.

purple321

It's a house not a flat. And i'm not sure how well they viewed it if they missed a whole bathroom. There are houses further down the street that were built in 2007 that have 1 bathroom makes me wonder whether they have actually viewed the house.

JJG

davidmcn wrote: »

The valuer will have valued the flat they viewed - I doubt that any corrections to the year of construction or the number of toilets will cause them to amend the value.

Who says the mortgage valuer actually viewed the flat (sorry house) in the first place?

McTaggus

Valuation will solely be based on the property and what they think its worth, regardless of whether there is a disagreement over whether its new build or not. I have seen several cases where the value attached to a property is substantially lower than that offered / price advertised. In these cases, you have three choices - 1) negotiate the price down so that it still fits your LTV with your mortgage lender / proportion of ownership you want to achieve; 2) save more money to fill the shortfall and fill the gap between your offer and the value, but knowing you will be overpaying on the property value; 3) walk away, and find one that is actually for sale for what its worth.


I know its tough and, having expended money on a valuation, you're both upset and angry by the outcome as you were hoping this could be your chance to make that dream come true. Just remember, the valuation is going to be far more accurate than a Housing Association is going to try to sell to you at - if they're valuing less, then that should be something you pay attention to. You could be stuck without being able to recoup your money if you buy it and it is overvalued. My advice would be to negotiate the price, and if that doesn't work then walk away.


Wishing you the best of luck.


Edited to add: have you asked them if they did a physical valuation (in person) rather than the sometimes employed "drive by with internet research"? Maybe worth just checking.....

davidmcn

JJG wrote: »

Who says the mortgage valuer actually viewed the flat (sorry house) in the first place?

It's quite likely for a purchase, but even if not it will largely be based on comparables for similar sales nearby and the gross floor area rather than how the rooms are configured - sticking a toilet in there isn't going to increase the value by 28% (and anyway I think the abbreviations there are for 1 bathroom and 1 WC).

purple321

McTaggus wrote: »

Valuation will solely be based on the property and what they think its worth, regardless of whether there is a disagreement over whether its new build or not. I have seen several cases where the value attached to a property is substantially lower than that offered / price advertised. In these cases, you have three choices - 1) negotiate the price down so that it still fits your LTV with your mortgage lender / proportion of ownership you want to achieve; 2) save more money to fill the shortfall and fill the gap between your offer and the value, but knowing you will be overpaying on the property value; 3) walk away, and find one that is actually for sale for what its worth.

If they won't budge on the valuation then yes we'll have to hope the housing will accept a lower offer and try to make up the shortfall. Not sure if the proportion of ownership can be negotiated. Is it possible to say we'll pay the asking price but for 65% of the property not 50%??

McTaggus

It depends on the funds you have available. If you can afford to top up the shortfall so the mortgage plus deposit is equal to the original offer amount, but can prove the flat is valued at less, then you might be able to negotiate a higher % of ownership as a result.


If you can't afford to do that, then all you can do is negotiate them down on total value so you net out at the same % ownership you had before.


If you drop your offer, and they drop the % ownership you have in response but keep property value the same, that's a decision only you can take - however, you need to consider if you're willing to make that trade off (as you're the only one who loses out in this scenario, not the HA).

Ms_Sophia

OP - what bank have you applied to for mortgage?