Property under valued... Should I be worried?

twongo

Greetings all

I have a question - Should I be worried because a mortgage valuation has come 15K under the selling price? (FTB - New Build - HTB).

Will a lower figure effect the HTB?

More so than all this, I don't want to pay over the odds for a property. I think paying a fair price is fair (or am I being naive?)

Would be great to get your feedback.

kingstreet

Yes it will.

You will have to get the builder to agree to the lower purchase price, or they may "encourage" you to apply to another lender so another valuation is done.

The outcome will determine if you need to submit a revised PIF & Res to the HTB Agent, or not.

twongo

Thanks for the prompt reply kingstreet

My mortgage advisor (provided by the builders) stated it's not a problem and they would get another valuation. Would this be through the same bank? Santander in this case.

kingstreet

Unlikely.

You will usually have to apply to a new lender. The builder may offer to pay for a new valuation or some other incentive if your mortgage product is worsening.

Hutch100uk

This is what I am concerned about. I'm waiting on my mortgage being approved and our valuation is currently on hold until it is. I am also buying new build with HTB and keep hearing these horror stories about houses being valued a lot less.

My broker (via Builder) seemed to know which lenders use 'Local Valuers' as he said that some valuers come from outside the area and are more likely to value less.

Ask your broker this question as they should be in the know about these things.

twongo

It gets better...

The mortgage advisor is getting a second valuation and expecting me to foot the bill!!

Surely this is taking the biscuit

HiToAll

twongo wrote: »

It gets better...

The mortgage advisor is getting a second valuation and expecting me to foot the bill!!

Surely this is taking the biscuit

And who should pay for it, you want a second opinion.

kingstreet

What I said in #4.

twongo

So should the builder pay for it? Or do I?

Regarding a second opinion - I would have much prefered to haggle the price of the property - not sure if that's the norm though. Could I do that instead?

kingstreet

There's no "should" it's whatever you can achieve.

I've known builders offer to pay for another valuation when the first one sees a downvaluation but there is no convention or law which dictates that.

If the next valuation is lower, you should expect to be able to negotiate the price. Builders don't like setting a precedent by reducing the price as it reflects in future comparables which surveyors use to base their valuations, but they won't be able to ignore two opinions.

Your broker should be advising you about how this works, they are getting paid for this.