Shared ownership valuation differences between the purchaser and sellers report - help!

ksamkange

I'm currently in the process of purchasing a shared ownership 2 bedroom property, I had my valuation report done by my mortgage lender (HSBC), but valuer has downvalued the property by over £40k. As a first time buyer, I’m concerned with the significant difference between the actual valued price of the property (£255,000) by my lender and the agreed price which was done before the valuation (£296,000 based on 50% shared ownership). If possible please, can someone advise me on what I should do as the sellers valuer valued the property at £300,000 despite the report having several discrepancies of sold properties around the surrounding area.

Thanks,

Cakeguts

Your lender is saying that they will only lend you an amount based on their valuation. This is to protect the lender in case you default don't pay the mortgage and they have to repossess and sell the property.

If you want to buy this particular property and the sellers are not prepared to reduce the price to what your bank will lend you then you have to put down the extra £40k as part of a bigger deposit.

I don't know what would happen if you tried a different lender. If you keep getting the same valuation that is low then you won't be able to afford the property at the price they are asking.

ksamkange

The agency also valued the property at £260,000 which correlates more with my lender's valuation of £255k. There is only one anomaly out of the three valuations made which is the seller's valuation which is worrying as I'm not sure if the seller's report is reliable enough for me to try other lenders...

Cakeguts

ksamkange wrote: »

The agency also valued the property at £260,000 which correlates more with my lender's valuation of £255k. There is only one anomaly out of the three valuations made which is the seller's valuation which is worrying as I'm not sure if the seller's report is reliable enough for me to try other lenders...

So it looks as if the seller is trying to sell this property for a lot more than anyone will ever be able to get a mortgage for. How long has the property been on the market for because sometimes this will give you an indication of the seller having unrealistic expectations?

Do you know if there have been any other offers and sales that have fallen through?

If all else fails you will need to find a different property.

ksamkange

The property has been on the market since January and the seller had already two other offers fallen through - one didn!!!8217;t meet the requirements financially and the last offer before me pulled out according to the agency. I!!!8217;ve tried to renegotiate with the seller to £260k but he still feels that his valuation is right !!!55357;!!!56904;. So you maybe right in terms of me looking for other properties although it!!!8217;s a shame because I did fall in love with the property.

the_quick

When we were selling our SO property we had to provide Housing association with RICS valuation. Just wonder if you seller has done similar - if so that is why he sticks to his price. But it is very strange there is such a huge difference

ksamkange

Thanks, the seller just came back and the RSIC valuation has been revised due to the discrepancies from the first report. The valuation changed from £300,000 to £270,000. However, it still seems the valuation is based on the same principles as the last which continues to worry me that the figure is being manufactured ever so slightly... any advise? The agency valued the property at £260,000 and my lender valued it at £255,000

Cakeguts

Well you and they have two choices. Either they lower the price to match what you can borrow so that you can afford to buy it. Or you walk away and find somewhere else that has a realistic sale price.

The point is that no one is going to be able to buy this property because the lender valuations are all going to come back lower than the sale price so either the seller lowers the price or they don't sell it.