Lender has disregarded RICS valuation

AdrianC

yvmilne said:

We wanted to sell our Shared Ownership, and the HA stated we had to have it valued by a RICS guy which we paid for, HA agreed and we found a buyer.
Everything progressed as normal but our buyers bank have now done a remote valuation and determined it is worth £10k less.
We have sent them a copy of our RICS (physical survey) report, however they said they can't accept it.

They could. They don't want to.

Your HA - the owner of the other half of the property - accepted the valuation you had done. You and they are both "on the same side.

The buyer's lender are not "on your side". They want to know that they're lending money secured on a decent asset. They want to get a report from somebody who is "on their side". That somebody has a different opinion on the value to your somebody.

That's what valuations are... Opinions.

D.L

Just because you have a piece of paper saying your property is worth £x, you can't force me to lend you the money. In the same way, you can't force a bank to lend you money.

The HA have used the valuation from the RICS report, the bank does it's own valuation. I imagine banks have tightened lending and asked valuations to be more cautious as a result of coronavirus.

Sorry! Probably not what you wanted to hear.

blue_max_3

Surely it is in the interests of the HA to have as high a valuation as it can. So it can own more of the property and charge more rent (assuming you don't own 100%). You likely would get a high valuation. The complete opposite is true for the lender.

yvmilne

We just used an independent RICS person, nothing to do with the HA.

blue_max_3

yvmilne said:

We just used an independent RICS person, nothing to do with the HA.

Sure, but he has nothing to lose by valuing it on the high side. You are happy, The HA is happy. You both may have been less happy if it was low. Indeed, the HA may have wanted to do their own if they deemed it to be too low. 
The lender has an interest in a low valuation. And honestly, shared ownership is pretty niche. You can understand why. 

yvmilne

I get that but I thought these valuations were supposed to be independent as opposed to be geared towards whoever has instructed the survey.

blue_max_3

yvmilne said:

I get that but I thought these valuations were supposed to be independent as opposed to be geared towards whoever has instructed the survey.

Well, you used an independent valuation and they used their own valuer. The sellers only has to please the lender, or at least not get sued for overvaluing. Sentiment is running low at the moment. 

Comms69

yvmilne said:

I get that but I thought these valuations were supposed to be independent as opposed to be geared towards whoever has instructed the survey.

They are broadly independent. However that isnt the point.

The point is that the lender has done a valuation now, not weeks ago; and that is their opinion. They have said a full valuation can be done down the line; and quite correctly pointed out that the value at that point may be lower. 

eddddy

yvmilne said:

Thanks all for comments, I guess it is what it is.  Not sure why the HA insisted on us using RICS to determine a fair selling price if the lender can choose their own price without even viewing the property.  Who I am assuming is also RICS.

RICS members use approved valuation methods, have a code of professional standards etc - but there is still scope for flexibility in valuations. And realistically, the RICS valuer will look after the interests of their client.

• The banks are worried about the uncertainty of the property market
• The banks' valuers will be worried about the uncertainty of the property market, and about being sued by the banks, if they overvalue

The result is likely to be a tendency for banks' valuers to value low.

graphs

You dont seem to be accepting the fact that your property has dropped 10 grand in value in a matter of weeks. Because this is what has happened I'm afraid to say.