Nationwide Undervaluation

ReadySteadyPop

RelievedSheff said:

If the flat is still worth £285k to you then put the extra towards it.

If not, renegotiate or walk away.

Good advice, but be prepared to make a loss if you do sell it later.

[Deleted User]

As this is a money saving forum, people tend to interpret lender "undervaluations" as amounting to a trump card "true value" and an opportunity to negotiate discount.

However, a personal experience where 3 valuers produced 3 different valuations for the same property has shaped my view on professional valuation. It's not a science. Your original offer price could be said to be what's it's worth.

ReadySteadyPop

[Deleted User] said:

As this is a money saving forum, people tend to interpret lender "undervaluations" as amounting to a trump card "true value" and an opportunity to negotiate discount.

However, a personal experience where 3 valuers produced 3 different valuations for the same property has shaped my view on professional valuation. It's not a science. Your original offer price could be said to be what's it's worth.

If people are depending on a mortgage loan though to purchase the property they have to follow the lender.

AskAsk

banks valuation isn't always market value as they will want to be on cautious side to protect themselves.  If you think the flat is worth £285k and you have the cash to cover it, then go for it.  finding your dream home isn't easy so don't let lender valuations deter you if you think it is a good property for that price.

but if you think there are better properties on the market then pull out and get another one.  so it all boils down to whether you still think this is a good buy at £285k and how much you want it.

kinger101

The Nationwide figure is a valuation, not an undervaluation.  Ultimately, the property is worth what someone is is both willing and able to pay, but if you rely on mortgage, this will certain impact the amount you're able to pay.

From the lender's perspective, they want to be sure there's adequate equity in the property if they're forced to take possession of the property.  Personally, I'd be somewhat concerned that Nationwide's surveyor has come in at a valuation much lower than what I'm paying.  I could probably swallow a few percent, but this is approaching ten.  

The vendor not negotiating further isn't a good reason to pay that price.  

dander

I've heard of a lot of "undervaluations" at the moment. However, when I applied for a mortgage recently with a low LTV, I was very surprised how quickly the loan was agreed, with no time for even a drive-by valuation to have occurred, let alone a valuation survey. What I take from this is that mortgage lender valuations are really about risk management, rather than the value of a property. Nationwide are currently reporting falling house prices, plus the interest rates and cost of living rises mean affordability is tougher for FTBs, so I expect Nationwide are being extremely cautious about high LTVs, so giving relatively pessimistic valuations in these circumstances. 

DE_612183

@jellycat1997 has only one post and has not come back - obviously they didn't like the responses or just went ahead with what they were going to do anyway.

We will never know.

It's a shame people don't come back and let those who have taken the time to give advise at least show some respect and tell us whether our advise was helpful or not.

ReadySteadyPop

dander said:

I've heard of a lot of "undervaluations" at the moment. However, when I applied for a mortgage recently with a low LTV, I was very surprised how quickly the loan was agreed, with no time for even a drive-by valuation to have occurred, let alone a valuation survey. What I take from this is that mortgage lender valuations are really about risk management, rather than the value of a property. Nationwide are currently reporting falling house prices, plus the interest rates and cost of living rises mean affordability is tougher for FTBs, so I expect Nationwide are being extremely cautious about high LTVs, so giving relatively pessimistic valuations in these circumstances. 

Very few properties would have an intrinsic value that could be fully separated from these things?