Mortgage down valued significantly

TheJackah

I'm a first-time buyer. We put an offer on a property for £115,000 and it was accepted. We have gone through the mortgage application process with Skipton Building Society - all checks passed except the valuation, which has down valued the property.

We had an independent valuation done by an estate agent which put it at £110,000 to £120,000.
The seller had a valuation done by their estate agent and it came back at £110,000.

Skipton's valuation has come out at £95,000.

Looking at properties in the area, there's a fairly wide variety of similar properties selling at various prices. One was at £119,000+, some around £110,000, with others at £90,000+.

To me, if two estate agents have valued it at £110k+, Skipton's valuation feels very out of touch. Online valuations also estimated it to be around the £110k to £124k mark.

In this situation, what can I do? Based on the current asking prices for properties, our offer of £115k felt reasonable, there's little to no other similar properties for prices any lower than £100k at the lowest end, but we were happy to negotiate down to the lower-end of £110k if needed, but for Skipton to say £95k is quite surprising.

MWT

TheJackah said:

Looking at properties in the area, there's a fairly wide variety of similar properties selling at various prices. One was at £119,000+, some around £110,000, with others at £90,000+.

If you want to challenge the valuation you'll need to look at the prices that comparable property has sold for recently, rather than what is currently on sale but unsold.

TheJackah

MWT said:

TheJackah said:

Looking at properties in the area, there's a fairly wide variety of similar properties selling at various prices. One was at £119,000+, some around £110,000, with others at £90,000+.

If you want to challenge the valuation you'll need to look at the prices that comparable property has sold for recently, rather than what is currently on sale but unsold.

The examples I quoted are ones that have sold. The estate agent valuation we got was based on those same properties, which is partially how they came to the £110k to £120k figure. It's left me quite perplexed how Skipton's valuation can be so out of balance with the opinion of 2 different estate agents and every online valuation tool I can find... is this normal?

london21

TheJackah said:

I'm a first-time buyer. We put an offer on a property for £115,000 and it was accepted. We have gone through the mortgage application process with Skipton Building Society - all checks passed except the valuation, which has down valued the property.

We had an independent valuation done by an estate agent which put it at £110,000 to £120,000.
The seller had a valuation done by their estate agent and it came back at £110,000.

Skipton's valuation has come out at £95,000.

Looking at properties in the area, there's a fairly wide variety of similar properties selling at various prices. One was at £119,000+, some around £110,000, with others at £90,000+.

To me, if two estate agents have valued it at £110k+, Skipton's valuation feels very out of touch. Online valuations also estimated it to be around the £110k to £124k mark.

In this situation, what can I do? Based on the current asking prices for properties, our offer of £115k felt reasonable, there's little to no other similar properties for prices any lower than £100k at the lowest end, but we were happy to negotiate down to the lower-end of £110k if needed, but for Skipton to say £95k is quite surprising.

Personally I will use the down valuation to negotitate price down. At least we meet half way. 

When bank down values, you have to pay the balance.

Thrugelmir

The lenders primary interest is that the property being adequate security for the money being advanced. After all it's their money at risk not yours. Surveyors normally have a good handle on recent sales prices and broader trends. As will obtain up todate information from a number of EA's. 

K_S

@thejackah Inexplicable down-valuations are not unusual. Valuations are not an exact science unfortunately.

The options you have are to appeal the valuation (if at all possible, I can't recall what Skipton's policy is on this) or try one last time with another lender (that doesn't use Connells) and hope they return the value you need.

TheJackah

K_S said:

@thejackah Inexplicable down-valuations are not unusual. Valuations are not an exact science unfortunately.

The options you have are to appeal the valuation (if at all possible, I can't recall what Skipton's policy is on this) or try one last time with another lender (that doesn't use Connells) and hope they return the value you need.

Thank you. Trying to figure out Skipton’s appeal process, no information available on it. 

The seller said Connells were only there for 10 minutes and didn’t do a thorough check, whereas when they had their own valuation done it took over an hour. Neither the seller nor I think Connells have done this properly. 

ukri

10 minutes is all they’d need tbh. All they are looking for is major issues that’s it. The rest of the valuation is already baked in using information that doesn’t require a physical inspection.

Unpess you have exact conparables no older than 3-6 months, don’t bother with an appeal, it’s a waste of time.

amnblog

Estate Agents 'valuations' are of no relevance.

Properties for sale at xxxx, are of no relevance.

As referred to above by ukri - To challenge a valuation you need to identify three very similar properties (very close) to your target property that have sold in recent months for more. This is hardly ever provable as it is the sold information that the valuers refer to. No sales make it difficult to stick a realistic current value on a property.

Look at it this way, the valuer has just stopped you paying too much for this property. Tell the Agent you will pay £95,000 or walk away.

Skipton_Building_Society_Representative

Hi there! 

I am sorry to hear the property in question has been down-valued. We do have a valuation appeal process and in this you'd have to show us 3 comparable properties in the same area. If you'd like this form, please contact us and we'll be happy to walk you through this. Our contact us page.

I can see there have been other comments from other advisers and it may be worth seeking further advice, if you wish to go down alternative routes. 

Happy to answer any questions you may have in the meantime! 

TheJackah

Skipton_Building_Society_Representative said:

Hi there! 

I am sorry to hear the property in question has been down-valued. We do have a valuation appeal process and in this you'd have to show us 3 comparable properties in the same area. If you'd like this form, please contact us and we'll be happy to walk you through this. Our contact us page.

I can see there have been other comments from other advisers and it may be worth seeking further advice, if you wish to go down alternative routes. 

Happy to answer any questions you may have in the meantime! 

Thank you. Managed to get the appeals form and have completed it and submitted it. Do you know what the turnaround time is for looking into appeals?