Mortgage valuations and comparables

RM_2013

We have sold our property STC and awaiting a mortgage valuation and homebuyers survey which is being carried out Tues as instructed through our buyers lenders.
our house was priced competitively in accordance with similar houses on the market nearby but then reduced the initial asking price by £10k as hadn’t had many viewings and finally accepted an offer just under new asking price but very nervous about possible down values (the house we are hoping to buy was down valued £10k - we did offer over asking so we’ve taken this on the chin given it was our choice to offer offer and vendor wouldn’t budge on price) 

My main question is comparables.  I know there is a delay in land registry being updated. 2 houses in the same road have been listed as sold on land registry in the last few months - one is similar to ours but semi detached - we are link detached on a bigger plot. That one is listed as having sold for £18k less than ours (4 months ago).  Another house which has never been up for sale so assume it was a transaction done privately was £79k cheaper!! There’s no way this is a true comparison as you wouldn’t get that type/size of house for that price on the open market.

my question is would they take this at face value or question the value for the lower priced property?

also if there aren’t many other houses on same street/same style would the search area be expanded? There are also houses that sold for a cheaper price but generally all are either smaller or in a less desirable location so prices tend to be lower in these areas.

not sure how much local knowledge is applied when the comparables are done.

can anyone advise me on this please? 

 Thank you 

Sarah1Mitty2

They will take a broad view of the wider market and interest rate risk, mortgage availability/affordability has changed massively since 4 months ago. maybe the cheaper house had damp or subsidence or something?

RM_2013

Sarah1Mitty2 said:

They will take a broad view of the wider market and interest rate risk, mortgage availability/affordability has changed massively since 4 months ago. maybe the cheaper house had damp or subsidence or something?

Thank you.  The cheaper house still has the same people living in it that have lived there for a few years.  The house looks very run down from the outside and I don’t think it was actually sold on the open market.  Maybe a family transaction? 

user1977

You haven't given us the actual prices, so we don't have the context for what £10k or £79k actually means in percentage terms.

But anyway, comparables are of transactions on the open market - if something wasn't advertised and is way off what ought to be the value then I would expect surveyors to assume there was something else going on (e.g. being transferred between partners/family members) and they would ignore it.

RM_2013

user1977 said:

You haven't given us the actual prices, so we don't have the context for what £10k or £79k actually means in percentage terms.

But anyway, comparables are of transactions on the open market - if something wasn't advertised and is way off what ought to be the value then I would expect surveyors to assume there was something else going on (e.g. being transferred between partners/family members) and they would ignore it.

Our house is a 3 bed link detached 1970’s build on a large plot.  Initially advertised at £270k but we reduced to £260k and buyers offered £258k

the semi detached sold in May for £240k - identical house but on a smaller plot and the other house is listed as sold for £179000 but clearly shows that the archived listing is several years ago 

The house we are buying was offers over £270k and we offered £280k (went to final offers) and it’s been valued by our lenders at £270k

Weve already taken a £10k hit on what we had budgeted for so a further downvalue on our house could make it all collapse 

user1977

Did you find comparables to back up the prices you've accepted/offered?

RM_2013

For the house we are selling no not really as it varies widely.  The closest I could find was the semi detached sold for £240k in May.  I couldn’t seem to find a link detached, in similar area age and style to compare. Lots of semi detached for cheaper (less desirable areas)  or detached for much more but nothing I could directly compare it to.

The one we are buying it is what it is.  We love the house it’s worth £280k to us as we get an extra bedroom plus bigger bedrooms and 2 extra toilets which we need with 2 teenagers in the house!
the compromise is that it’s a townhouse so smaller garden/parking etc but we couldn’t justify the jump of around £40k extra for a 4 bed detached so it was a compromise we were willing to take

i guess it’s a waiting game.  It’s out of my hands anyway - I need to stop second guessing everything 🤣

Sarah1Mitty2

RM_2013 said:

Sarah1Mitty2 said:

They will take a broad view of the wider market and interest rate risk, mortgage availability/affordability has changed massively since 4 months ago. maybe the cheaper house had damp or subsidence or something?

Thank you.  The cheaper house still has the same people living in it that have lived there for a few years.  The house looks very run down from the outside and I don’t think it was actually sold on the open market.  Maybe a family transaction? 

Maybe, but more likely the price from a  few years ago, the lender will be looking at market conditions now and recent sold prices.