Understanding lender valuation process

morgs99

Hello,
I’m a ftb with my husband. We have had an offer accepted on a house, and DIP with nationwide has been approved at 90% ltv subject to valuation. I’ve been reading a lot about the potential for a down valuation and had a question that I can’t find an answer for - hopefully someone can help me out.
do mortgage valuations have a tolerance on them? Say the valuation comes back at within 3% of the agreed sale price, what happens then?

davidmcn

Sort of, in that if the figure the surveyor was thinking of is within a few percent of the sale price then they'll probably just go with the price. But they will have their limits - if say they would have valued it at 8% below they might try to be helpful and push it a bit further up, but still stop at say 3% short of the price. Not much point speculating though!

morgs99

Thank you, that’s really helpful! From your response, I’m assuming the surveyors see our agreed asking price? I’m nervous as there really isn’t anything comparable in the local market as it’s a 3 bed detached plus 1 bed annexe so I don’t know if the annexe will add much to the survey value.

thaddy

For a Nationwide valuation through Countrywide, the surveyor will have the purchase price to hand.

Thrugelmir

The surveyor needs to judge whether the property offers good security for the monies being advanced. This will take into account the marketability of the property should there be a need for a forced sale. 

SMR710

Just be aware that properties with an annex can throw up their own issues with lenders, particularly if it means there are 2 kitchens. Some lenders dont like to lend against them.