LTV - Is it really "Value" or "Price"

grumiofoundation

lacalladine said:

But, the market appraisal valuation is still £202k, even if the only offer is £188k, doesn't mean the value is £188k

If the only offer is 188k its worth 188k. 

lacalladine

I see your point, but I'm no property valuation expert, if a surveyor says it is worth £200k but the vendor accepts £188k, does that mean the neighbour would also accept £188k?

davidmcn

lacalladine said:

I see your point, but I'm no property valuation expert, if a surveyor says it is worth £200k but the vendor accepts £188k, does that mean the neighbour would also accept £188k?

A surveyor's unlikely to say it's worth £200k immediately after an identical property has been sold for £188k.

lacalladine

but that's the point, the last 4 sales went for >£200k so his estimate reflected recent sales and like properties on the same street. This was all before I offered £188k, When I found I could get a mortgage up to £200k I clearly tried to negotiate and got the vendor down to £188k, even though the house is valued at £200k. I just can't see the logic in the bank saying that because 1 house sold for less, that devalues other properties. The vendor had a specific situation that meant she wanted a quick sale, nothing to do with the actual value of the house.

Kt87

Lacalladine - I think you answered your own question in your first comment. The home was reduced and they accepted a lower offer, therefore your sale price is what the home was worth. I could have my home on for whatever sum I like but ultimately any property is worth what someone is willing to pay. Take a short mortgage deal and when you remortgage your value may increase.

davidmcn

lacalladine said:

I just can't see the logic in the bank saying that because 1 house sold for less, that devalues other properties.

The logic is that the most recent sale is a better indicator of what's happening with current values than the older sales. You've acknowledged yourself that COVID-19 is affecting buyers' appetites to pay more than you've offered, and I presume that those other sales (and the original valuation) are all pre-COVID?

Anyway, it doesn't really matter whether you agree with, or even understand, the logic, those are the rules which lenders use, so you're going to have to live with them.