House under valued by mortgage lender

Davesnave

Dave&katie wrote: »

As the house is pretty unique to the area it may be difficult

Houses that are 'unique' to an area may be out of place or over-developed.

An example of the former is a lovely detached C18th property where I used to live, which was bought for £1m (probably cash) by a Chinese businessman. While the house would have been worth £1m a few hundred metres away, its situation wasn't the best and the guy sold it within a year or two for only £750k.

An over-developed house is one which has been upgraded and extended well beyond the extent of any neighbours. A lady from Wales came to this forum wondering why the house she'd spent a mint on wasn't selling at over £300k. People here pointed out that nothing else in her area had ever sold for more than £250k, so she was well above the ceiling height for her post code.

I bookmarked that house on Rightmove. After another month or so, it dropped to £250k and sold immediately, so the lady took the advice here in the end.

I'm only giving these two real examples to highlight that the valuation may be closer than you think to a fair price, despite appearing low. In the case of the C18th house, someone got lucky and found a buyer willing to pay over the odds, but as the Welsh lady found, it isn't always the case.

As above, I'd share the valuation with the vendor, go for a second one and take it from there. The vendor might then be more willing to revise their hoped-for figure downwards.

Thrugelmir

Dave&katie wrote: »

Converting a dilapidated workshop into a 1 bedroom annexe with bathroom and kitchen. A loft conversion to create an extra bedroom and ensuite. A new kitchen with range cooker and a large conservatory. Seems to me that would add value.

Not a £100k's worth of value. Spending money doesn't guarantee a return.

googler

Dave&katie wrote: »

Is it worth going to.a different lender then and paying for a new valuation?

Why do you need to involve another lender?

Just ask one or two local surveyors for their valuations, and pay them for their work.

If two or three surveyors come in at £250k, you can say to the seller - "look, you're not going to get £290k unless someone with lots of cash in hand comes along, so ....."

Dave&katie

Thank you for all your input, very helpful.

Funnily enough the house in question is in wales and I understand what you say about over developing a house for the area. The vendor initially had it on 3 years ago for £425,000!!! It seems she may still be over valuing.

I also take what has been said about not involving another lender, and we probably will end up getting another valuation at our own cost and seeing if it correlates with the existing valuation.

Such a horrible situation to be in!!

kinger101

Dave&katie wrote: »

Thank you for all your input, very helpful.

Funnily enough the house in question is in wales and I understand what you say about over developing a house for the area. The vendor initially had it on 3 years ago for £425,000!!! It seems she may still be over valuing.

I also take what has been said about not involving another lender, and we probably will end up getting another valuation at our own cost and seeing if it correlates with the existing valuation.

Such a horrible situation to be in!!

Is there a point to another valuation if the lender won't accept it even if it is higher, or the vendor still won't renegotiate is it falls short? Can it provide a way forward?

glentoran99

Dave&katie wrote: »

Thank you for all your input, very helpful.

Funnily enough the house in question is in wales and I understand what you say about over developing a house for the area. The vendor initially had it on 3 years ago for £425,000!!! It seems she may still be over valuing.

I also take what has been said about not involving another lender, and we probably will end up getting another valuation at our own cost and seeing if it correlates with the existing valuation.

Such a horrible situation to be in!!

Shes not overvaluing though if both you and another person are willing to pay whats shes asking

Dave&katie

We can only pay what the mortgage companies will lend us though.

I think another valuation would make her reconsider, unless there is a cash buyer who is willing to pay that much she will need to reconsider her price. Also if we had another valuation that valued it higher then we would consider another lender.

KRB2725

I would get another valuation done with another lender. If you pay for one yourself and it values at £290, then you are going to have to pay for a third when you are then presumably going to go to another lender anyway.

If a second lender values at £250k, then the vendor is far more likely to realise that they is going to find it difficult to sell to someone who needs a mortgage (unless they have a large deposit). I would be more inclined to reduce on a second valuation from a lender than one instructed by the prospective purchaser.

POPPYOSCAR

I do have to wonder just how some lenders arrive at their valuations.


We recently took out a new fixed rate on a property and they were looking at loan to valuation.


They had it down as £240,000 when we queried it they put it up to £320,000.


It has been valued by an EA at between £425 - 450,000.


What would HMRC value it at for CGT - £450,000 probably!!


Op I hope you find a resolution.

Dave&katie

Thanks again for your replies, makes sense with going with a different lender for a second valuation if we would only have to get a third if it is worth £290k.