Valuers running scared

dunstonh

I asked the IFA and she said that all the valuations are coming back lower than expected and she thinks they are just being over cautious.

As she is an IFA and not a mortgage adviser (and thefore meaning she is an investments adviser), ask her her much property investment funds have dropped in value since July. You will find 8-15% should be the answer for bricks and mortar funds.

Then ask her why she thinks residential property pricing is just being cautious when every indicator out there shows houses prices "should" drop.

socrates

To answer a few questions - the properties are inside London - NOT new builds.

I have a good mind to stick one of them on the market just to show the lender what the true value is - in my area houses like this one sell very quickly - the valuer was from about twenty miles away and just does not have enough specialised knowledge of the area.

Either way as someone said earlier its going to be all about the lending not the prices!

poppy10_2

socrates wrote: »

I have a good mind to stick one of them on the market just to show the lender what the true value is

What price was your valuation? And what was the Bank's estimate?

C32AMG

socrates wrote: »

To answer a few questions - the properties are inside London - NOT new builds.

I have a good mind to stick one of them on the market just to show the lender what the true value is - in my area houses like this one sell very quickly - the valuer was from about twenty miles away and just does not have enough specialised knowledge of the area.

Either way as someone said earlier its going to be all about the lending not the prices!

Did you not read my post?

As professional valuers, we deal with a very large area. Often going up to 100 miles from our office. Regardless of whether or not we know the local area, the report will be backed up with evidence supplied by local estate agents, land registry etc.

An EA 'needs' to know the local area in order to provide a market appraisal, a professional valuer does not need to know the local area as his value will be based on evidence, rather than prior knowledge.

socrates

Some people on here have a very condescending attitude - just because you have a few letters after your name does not mean you have the monopoly on the truth.

Now let me tell you - my area is dominated by Asians - as soon as a For Sale sign goes up people knock on your door and offer the full asking price (as long as it is market rate) - these are called specialised buyers.

There was a case where one of my neighbours was moving abroad his Asian neighbours knew he was leaving and asked to buy the house - he said he needed to rent it for two years more to balance his books. They offered him the full asking price plus two years rent @ £15k pa. These individuals are cash rich and unlike me do not need to rely on valuers or lenders who want to flip a coin that will always be heads I lose tails they win.

Now I know what you are going to say - the mortgage valuation is done on the basis of what a property would sell for if I defaulted and they had to sell a repo. However I still challenge that valuer to find a property on the market equivalent to mine for the price quoted - my conservative valuations from Agents was £400k for a quick sale - his valuation for mortgage purposes was £350k!

Also there are not any properties for sale in the immediate vicinity that are similar houses even with an asking price of £25k more.

dunstonh

Socrates, you appear to think that you know more than everyone else so why bother asking us all in the first place?

The only reason a lower valuation than you want would be a problem is if you are borrowing to the limits. If you are really going to the limits on borrowing at this time then a valueer under instruction from a lender is totally correct giving a realistic valuation based on current market conditions where the trend is prices going down and not up.

Perhaps you are in denial of current market conditions and the probability of seeing a 7-30% reduction in house prices over the next 5 years. A long period of growth can make inexperienced investors believe they are experts and invincible.

Dan_Collins_2

socrates wrote: »

Some people on here have a very condescending attitude - just because you have a few letters after your name does not mean you have the monopoly on the truth.

Now let me tell you - my area is dominated by Asians - as soon as a For Sale sign goes up people knock on your door and offer the full asking price (as long as it is market rate) - these are called specialised buyers.

There was a case where one of my neighbours was moving abroad his Asian neighbours knew he was leaving and asked to buy the house - he said he needed to rent it for two years more to balance his books. They offered him the full asking price plus two years rent @ £15k pa. These individuals are cash rich and unlike me do not need to rely on valuers or lenders who want to flip a coin that will always be heads I lose tails they win.

Now I know what you are going to say - the mortgage valuation is done on the basis of what a property would sell for if I defaulted and they had to sell a repo. However I still challenge that valuer to find a property on the market equivalent to mine for the price quoted - my conservative valuations from Agents was £400k for a quick sale - his valuation for mortgage purposes was £350k!

Also there are not any properties for sale in the immediate vicinity that are similar houses even with an asking price of £25k more.

OK OK, So your property has been downvalued and the truth is not what you want to hear or what you want it to be. We are trying to help, you asked the question and as a mortgage broker you issue is being brought up in my office almost daily, we are on the front line and are only trying to offer you our experiance.

Now, in london or not the valuation will be based on properties sold and not what the EA's have property on the market. He will use property sold within as close an area as possible. London is a strange place, I have seen property go for over the asking price in the last few months and in other areas I have had property struggle. Go on Rightmove and look at sold prices not at EA's market values. If you can find evidence to support your case then you can put it forward, I bet you cant!

Good luck!

DaggaDagga

socrates wrote: »

Now let me tell you - my area is dominated by Asians - as soon as a For Sale sign goes up people knock on your door and offer the full asking price (as long as it is market rate) - these are called specialised buyers.

That may well be the case but, as you've said yourself, they will only pay the "market rate". That "market rate" is probably now lower than it once was. Why is this so difficult to understand?

I'd be very interested to know why you need to extend the mortgage - surely you're not buying houses at the moment are you?

Some sobering reading from today's Guardian for those intoxicated on house price rises:

http://www.guardian.co.uk/business/2007/dec/03/houseprices.marketturmoil

You didn't jump off the gravy train early enough. You always need to sell to a greater fool. Fools can't get mortgages any more though.

Conrad

I find almost everyone over values thier own property. Only last month a couple told me a neigbours home sold for £293000 and was'nt in as good condition as thiers (sigh - not heard that one before!), yet a remortgage valuation has come in at £260000.

Think about all those wannabe singers on X Factor - to a Man they think they have something special yet 99.9% are nothing special. The same principle applies with property or for that matter people over estimating their kids football ability / intelligence / looks - human nature I guess!

Conrad

DaggaDagga wrote: »

That may well be the case but, as you've said yourself, they will only pay the "market rate". That "market rate" is probably now lower than it once was. Why is this so difficult to understand?

I'd be very interested to know why you need to extend the mortgage - surely you're not buying houses at the moment are you?

Some sobering reading from today's Guardian for those intoxicated on house price rises:

http://www.guardian.co.uk/business/2007/dec/03/houseprices.marketturmoil

You didn't jump off the gravy train early enough. You always need to sell to a greater fool. Fools can't get mortgages any more though.

I'm in the business and I have sold some of my B2Ls to invest abroad. My B2L clients have thought me mad when I've mentioned over the last couple of years UK B2L is perhaps not such a great investment.

The stock reply I get is "but properdee only goes up, all I do is buy and then wait", to which I think to myself "mmm, so it's a one way bet, an ATN machine just waiting to gush cash all over you is it":rolleyes: .

I note most LLs vastly overestimate thier 'profit'. They for example forget to factor in the cost of borrowing the 15% deposit, the capital gains Tax, Accountants fees, lost time etc etc.

Having said that I am in 2 minds now whether this could now be a buying opportunity given rates could fall soon.