Undervaluation

Ed-1

Is there a way to revise an estimated valuation after submitting a remortgage application?

A relative has undervalued their property and the surveyor has simply rubber stamped the valuation.

Lotak

Usually the lender will perform their own valuation.

It really does matter what the LTV is on the estimated value of the property.
As an example, if you have an LTV of 50% with the undervalued estimate, it won't matter if you get it revalued, since 40% and 50% LTV will be in the same LTV band. If the LTV is 71% (say), then you'll want it revalued as you'll drop a band.

What is the LTV of the property at the undervalued figure?

Ed-1

Lotak wrote: »

Usually the lender will perform their own valuation.

It really does matter what the LTV is on the estimated value of the property.
As an example, if you have an LTV of 50% with the undervalued estimate, it won't matter if you get it revalued, since 40% and 50% LTV will be in the same LTV band. If the LTV is 71% (say), then you'll want it revalued as you'll drop a band.

What is the LTV of the property at the undervalued figure?

The lender sent a surveyor round but they just rubber stamped the undervalued estimate that the applicant provided.

3 estate agents have all valued it £13-18k higher.

The LTV with the undervalued estimate is 85%. The LTV with the mean estate agent valuation is 73%.

As the property is being remortgaged to raise capital to purchase another property, it also affects the amount that can be borrowed too.

kingstreet

Hang on.

The applicant put on the application the estimated value and loan amount and submitted it.

The valuation has come back same as what was on the form and now they can't borrow enough?

Did they suddenly realise they needed to borrow more?

Estate agent "valuations" are not the same as those provided by a surveyor and far from rubber-stamping, the surveyor seems to have pitched the value about right.

Ed-1

kingstreet wrote: »

Hang on.

The applicant put on the application the estimated value and loan amount and submitted it.

The valuation has come back same as what was on the form and now they can't borrow enough?

Did they suddenly realise they needed to borrow more?

Estate agent "valuations" are not the same as those provided by a surveyor and far from rubber-stamping, the surveyor seems to have pitched the value about right.

The applicant used an estimate off Zoopla which uprates the previous selling price.

It's clearly not pitched right when you see that every comparable sale in the area is considerably more and this property has a bigger garden, loft space and lots of parking. The money from the remortgage is being used to purchase a buy to let. At the time of application an offer hadn't been accepted.

kingstreet

So are we looking at EA marketing appraisals, or actual comparables; the recent sale prices of similar property in the vicinity?

A surveyor will usually not exceed the estimated value if that provides the mortgage the applicant requires. It isn't designed to be an open-market value, but confirmation the property is suitable security for the mortgage requested.

Sorry to ask again, but is the reason this has become an issue because the requested loan amount is insufficient?

If it is, you are going to have to go back to the lender and ask for it to be altered, or apply to another lender and hope the higher figure is accepted.

Ed-1

kingstreet wrote: »

So are we looking at EA marketing appraisals, or actual comparables; the recent sale prices of similar property in the vicinity?

The latter - it was an estate agent visit but these were detailed in the report.

kingstreet wrote: »

Sorry to ask again, but is the reason this has become an issue because the requested loan amount is insufficient?

That, and the fact that the interest rate if the more accurate valuation is used is around half a percent lower.

It may be a case of having to resubmit the application to the same lender from scratch.

Farmerbob

I don’t think youll need to resubmit the full application. But you’ll need a stronger argument to challenge the valuation figure than EA estimates. Zoopla is only useful for finding out actual sale prices in the area rather than their “estimated” valuation, we always steer customers at work from using the estimation as its most of the time unrealistic. If it’s true and there is comparables then add that to your appeal but it’ll need to be stronger than the EA says it’s worth more.

Ed-1

Farmerbob wrote: »

I don’t think youll need to resubmit the full application. But you’ll need a stronger argument to challenge the valuation figure than EA estimates. Zoopla is only useful for finding out actual sale prices in the area rather than their “estimated” valuation, we always steer customers at work from using the estimation as its most of the time unrealistic. If it’s true and there is comparables then add that to your appeal but it’ll need to be stronger than the EA says it’s worth more.

The estate agent valuation report (although not a surveyor's report) did have evidence of how they arrived at their valuation using comparable sales.