What variables are considered in a valuation/how do they make their decision?

onthemend88

Hi everyone

Getting very nervous now as we are putting in our mortgage application this week (Precise or Kensington) and will be putting down a 5% deposit and using the HTB scheme of 20%. The house we are buying is a new build 4 bedroom detached property which has been built by a smaller, local developer and is costing £249,000. 

I am getting worried about the valuation being instructed (if we even get to that stage, fingers and toes crossed) because in the area that I live, there are not a lot of properties that will compare to ours (and the others being built). The only properties I have been able to find that have sold/up for sale in our area (detached, 4 bedrooms), have roughly sold/on sale for £280,000. 

What kind of variables do the valuation officers look for when they make their decision on what they deem the property is valued at? 

For some reason, I am just worried that we might get undervalued - I don't know why but I am just getting panicked...first time buyer nerves I think! 

minimike2

hellomortgage said:

 Its pretty uncommon for a new build to be downvalued by the surveyor.  

Yeah, no, it really isn't pretty uncommon. I've seen more downvaluations on newbuilds in my 17 years in the field than I've had hot dinners. 
Also, OP, it isn't being "undervalued". At the end of the day, it's worth what someone will pay in the eyes of a consumer, but to a lender it is seen without the emotional connection which a buyer makes. Ultimately you just have to wait to see what the report says.

onthemend88

@minimike2

Thank you I completely agree with you. I just want to go into this with eyes wide open and try and have a plan B if it is not valued at the price we are happy to pay for it - it is very difficult when there is an emotional connection though  

Do you know what they look at to decide the value of the property? Would they look at 'similar ' properties and take that into consideration? 

Thrugelmir

The surveyor will assess if the property provides adequate security to the lender for the monies being advanced. That's the bottom line. As it's their money you are spending not yours. 

MovingForwards

The property itself, condition and size.
What comes with it eg drive, garage, street parking, garden.
The area.
Recent similar property sales in the location and wider location if no local ones.
How the property market is in that area.

We all worry about being undervalued when it comes to the survey, but we also know how much the property is worth to us.

If its valued different to what you have offered, you either look at another lender, try and negotiate or walk away.

onthemend88

MovingForwards said:

The property itself, condition and size.
What comes with it eg drive, garage, street parking, garden.
The area.
Recent similar property sales in the location and wider location if no local ones.
How the property market is in that area.

We all worry about being undervalued when it comes to the survey, but we also know how much the property is worth to us.

If its valued different to what you have offered, you either look at another lender, try and negotiate or walk away.

Thank you for taking the time to respond, your is very helpful