Mistake on property valuation

Drb

Hi

Here is a brief synopsis of what is going on:
We want to buy 30% of a £300k, 4 bedroom semi-detached new build home in an Exeter village through the local housing association.

This is the deal and there is no alternative to the share available.
We have an average deposit, and after a mortgage application to Nationwide and an application to the housing association, we have been accepted on all fronts.

The valuation took nearly a month to get done and came back with a value of £275k - a 25K difference!
Naturally, our mortgage advisor says he has seen this once in a 30 year career and our sales consultant at the housing association says she has never seen this in a 10 year career in the industry.

Our mortgage advisor then goes to Nationwide who subsequently check with the valuer about what is going on.

The valuation report lists the property as a terraced house. It then goes back to the valuer to clarify, and they have refused to change the original valuation figure of £275. Apparently Nationwide have to accept this figure and now there will be a shortfall on my mortgage.

On the other side, the housing association have pulled their comparables including their valuation criteria and it clearly shows the property should be in the region of £300k.

To a consumer, it seems obvious that if there was a mistake on the report, there should automatically be a call to do a new valuation. How can the valuers be this arrogant and stand in the way of a system that is put in place to help those who cannot buy on the open market, get onto the property ladder.

The ombudsman comes to mind against Nationwide as does the ombudsman against the valuers.

Is there any other action I can take as I'm tired of getting the sh** kicked out of me and my family by fat cat pompous corporates who care about nothing.

Any sensible help would be appreciated.

Thank you
D

eddddy

I guess your main options include:

- Suggest to the HA that they reduce the price to £275k (or near it)

- Apply for a mortgage with a different lender, who uses a different valuation company - and hope they value it at £300k

- Pay the extra £25k out of you savings (but I guess you don't have an extra £25k in savings.)

- Ask Nationwide to reconsider the valuation (but it sounds like you have done that already).

- Walk away


There's not really any ombudsman that can help you with this issue.

Nationwide are essentially saying that, if you fail to pay your mortgage and they have to repossess, their opinion is that they could only sell your share of the property for £275k. You can't force them to change their opinion.

kinger101

So the valuer still thinks the property is worth £275K even though it's semi-detached.

The housing associations valuation is meaningless to the bank. You'll either have to find another lender, or better still, tell the property owner that the valuer is aware it's semi-detached, and has given a figure of £275K.

Even if a similar property was valued at £300K recently, I suspect banks and surveyors are going to be a little more cautious in today's climate.

Drb

@edddy - thanks for the response. Those are the options yes. However, I may only need to come up with £7,500 which is the difference to make up the £90K I need to give to the HA (30% of £300k is £90k while 30% of £275k is £82,500). I'm still purchasing 30% .
Have I got this right?

@kinger101 - Yes, the valuer still thinks its worth £275k even though it is semi detached. An injustice for sure. nobody is prepared to do a second valuation even though there was an obvious mistake. The property owner is aware of the mistake and is in fact helping with the appeal.
Lets be honest, £25K is beyond cautious in any climate.

Thanks for your responses.

gettingtheresometime

Drb wrote: »

@edddy - thanks for the response. Those are the options yes. However, I may only need to come up with £7,500 which is the difference to make up the £90K I need to give to the HA (30% of £300k is £90k while 30% of £275k is £82,500). I'm still purchasing 30% .
Have I got this right?

@kinger101 - Yes, the valuer still thinks its worth £275k even though it is semi detached. An injustice for sure. nobody is prepared to do a second valuation even though there was an obvious mistake. The property owner is aware of the mistake and is in fact helping with the appeal.
Lets be honest, £25K is beyond cautious in any climate.

Thanks for your responses.

The point is, that for whatever reason, the valuer believes the house to be worth £275k not £300k which is what the HA believes it to be worth.

Won't the HA want 30% of £300k?

barbiedoll

I don't think that 25k is "beyond cautious". My sister offered 275k on a house for sale at 281k. When the valuation came in at 250k, she thought all hope was lost. Luckily, she was dealing with a sensible vendor who dropped the price accordingly. This is just outside London and prices are stagnating and/or dropping everywhere. (Don't tell Crashy I said that!)

You could try another lender but the HA may eventually have to suck it up if the same thing happens again. If it's not worth 300k, they'll have a hard time selling for that. Which is good news for you!

Tiners

I just can't get my head around it when buyers get irate at what seem now like ever more frequent down valuations from lenders surveyors.

In what other situation in life would a buyer (of anything) disagree with a professionals qualified valuation and insist they want to pay a higher price for what ever it is they're buying?

Drb

I hear what you're saying Tiners and agree entirely. The point is, there was a mistake on the report. An obvious one and the valuer has refused to do a new valuation. If a new valuation was done and it came back the same, then fine. It's the fact that they're not giving it a fair chance.

getmore4less

I would be more concerned about the HA stance.

Even if the lender says £275k if the HA say 30% is £100k that's what they want and in the future they may be sticklers for any attempt to buy more of the place or worse when you come to sell.

IN the early days the new build premium won't help recover your outlay and if there is HA premium as well as that could be a show stopper for any sale.

ciderboy2009

Drb wrote: »

... there was a mistake on the report. An obvious one and the valuer has refused to do a new valuation.

In the report was it valued as an end terrace?

If so then I can understand their stance - the difference between end terrace & semi detached is minimal.

However, if it was valued as a centre terrace then I would expect a difference in value.

Cakeguts

Has anyone considered that is was valued as a semi detached and then someone made an error typing up the report and put terraced instead of semi?