Getting 'valuation' of a unique property
Discussion
brrapp said:
Valuers aren't magicians, they can't produce a valuation out of thin air. They have to rely on 1) previous valuations for that property with an index-linked update, 2) valuations of similar properties nearby, 3) valuations of similar properties elsewhere with an adjustment for area.
In the absence of the first of the above, the mortgage valuer will have used a combination of the second two to find his valuation.
Now that there has been a valuation made for this house, every valuer from now on will use the easiest method, number 1 from above. I wouldn't bother paying for another valuation yourself, whoever you get to do it, it'll be based on the existing valuation that you already have.
Really useful, thanks. I'm not sure there have been previous valuations for the property, as I'm not sure how far down the line the previous prospective purchasers got. Since they didn't sell their house, I'd not be surprised if they didn't get the mortgage agreed / property valued. And the last recorded sale of the 'building' was for a small fraction of the asking price now it has been converted (<15%) in only a few years.In the absence of the first of the above, the mortgage valuer will have used a combination of the second two to find his valuation.
Now that there has been a valuation made for this house, every valuer from now on will use the easiest method, number 1 from above. I wouldn't bother paying for another valuation yourself, whoever you get to do it, it'll be based on the existing valuation that you already have.
Even on my last thread, when someone did some digging and found the property online, I'm sure some people said 'nice, but slightly over-priced'. That was our gut feeling too, so we negotiated lower - but if mortgage (not Estate Agent) valuations put this into question, it is something we need to consider.
timetex said:
Unless you really ARE suggesting we go ahead and buy it anyway? Everybody makes offers subject to being able to get a mortgage on a property, surely!
Everyone makes offers subject to a survey which finds things that can't be seen and would devalue the property to the extent that you couldn't secure a mortgage on it. That is somewhat different to making an offer, and then once accepted, trying to decide whether you've done the right thing, or should pull out, or whether a random internet forum thinks the house is worth what you are intending to pay.
There is substantial chance once you have made an accepted offer that the vendor will be committing to financial outlay on the strength of what you have said. If your vendor read this thread they would probably stop moving forward and rightly so.
I drove past the house in question a few days ago. It's unique - there's nothing like it in the area to my knowledge and the type of place you'd buy rather more with your heart and not so much with your head.
Bottom line is its worth what its worth to you - you can't make robust comparisons with similar property in the area because there isn't any or look at £ per M2 because that only really works on identikit housing estates or even decide if its going to be a good investment because nobody knows.
We viewed several character and period houses a little north of that area a couple of years ago and knowingly overpaid to secure exactly the house we wanted rather than trying to screw every penny out of the best possible deal on paper. Sometimes that's what you have to do to get what you want and pushing too hard will leave you with nothing but a pile of bills from surveyors and solicitors as well as a house you're trying to sell that'll eventually get tainted because it's been on the market for a long time making prospective buyers start to wonder why it's not sold yet.
Nobody can make the decision for you no matter how many valuations you can get your hands on and at the end of the day all they are are best guesses with no guarantees. It's your money you're spending but IMO it's a lovely house in a equally lovely village and area.
Life's too short and all that...
Bottom line is its worth what its worth to you - you can't make robust comparisons with similar property in the area because there isn't any or look at £ per M2 because that only really works on identikit housing estates or even decide if its going to be a good investment because nobody knows.
We viewed several character and period houses a little north of that area a couple of years ago and knowingly overpaid to secure exactly the house we wanted rather than trying to screw every penny out of the best possible deal on paper. Sometimes that's what you have to do to get what you want and pushing too hard will leave you with nothing but a pile of bills from surveyors and solicitors as well as a house you're trying to sell that'll eventually get tainted because it's been on the market for a long time making prospective buyers start to wonder why it's not sold yet.
Nobody can make the decision for you no matter how many valuations you can get your hands on and at the end of the day all they are are best guesses with no guarantees. It's your money you're spending but IMO it's a lovely house in a equally lovely village and area.
Life's too short and all that...
julian64 said:
Everyone makes offers subject to a survey which finds things that can't be seen and would devalue the property to the extent that you couldn't secure a mortgage on it.
That is somewhat different to making an offer, and then once accepted, trying to decide whether you've done the right thing, or should pull out, or whether a random internet forum thinks the house is worth what you are intending to pay.
There is substantial chance once you have made an accepted offer that the vendor will be committing to financial outlay on the strength of what you have said. If your vendor read this thread they would probably stop moving forward and rightly so.
The vendor will be well aware from their Estate Agent that the valuation hasn't quite gone according to plan. So if they read this thread, I doubt it would contain any surprises...That is somewhat different to making an offer, and then once accepted, trying to decide whether you've done the right thing, or should pull out, or whether a random internet forum thinks the house is worth what you are intending to pay.
There is substantial chance once you have made an accepted offer that the vendor will be committing to financial outlay on the strength of what you have said. If your vendor read this thread they would probably stop moving forward and rightly so.
Part of the reason the mortgage company send a valuer round (valuer, NOT surveyor) is to verify that the property is a sound basis for their investment. If they don't agree with the numbers discussed between the vendor / purchaser, I'm afraid that has a clear impact on the viability of the purchase, since it has an impact on our ability to finance the purchase. Even if there's nothing structurally wrong with it, the valuation can (and should) make a difference. Or at least, make the purchaser double-check things.
As someone else has said, future valuations will also be based on this one, so if we didn't buy it, the next buyers (who need a mortgage) would have a similar issue, and so on and so on.
We sighed with relief when the mortgage valuation was done on behalf of our own buyers, and came back with no issues. That basically 'agrees' that our house is in the right financial ballpark. If the same isn't true of the house we're buying, we would obviously have to reconsider whether it was the right decision to move forward.
I can't believe you honestly think that, if the valuer comes back with a lower amount, and the mortgage company won't produce an offer as a result, that we should absolutely and without question still go ahead with the purchase at the originally negotiated price. That's madness!
Of course people commit money once they receive an offer on their house - but until contracts are exchanged, everything that anyone does is done 'at risk'. Its not ideal. It is a royal pain in the arse sometimes. But at least until your buyer has their mortgage offer approved and in place, you (as a vendor) really should be treading carefully. The same goes the other way. Until we exchange contracts, the vendor could change their mind at any moment - so I'm not rushing out to buy new furniture just yet!
We aren't talking about a semi-detached in a row of similar houses, with a resale history to fall back on, or a new build with sq-footage calculations all neatly worked out by the Estate Agent - the point of this thread was because this is a unique property with no sale history and little (that I could understand as a layman) in terms of comparative properties on which to make a value-judgment.
I started it because I'm getting the feeling that the valuer does have an issue with value, so asked how to get independent advice. I wasn't actually asking a random internet forum whether it was worth what we are intending to pay. To some people it would be, to others it wouldn't. Either way its a moot point as its just other lay people's opinion, whereas I'm hopeful a proper valuer will have some science and maths and research to back up his/her opinion.
Jaguar steve said:
I drove past the house in question a few days ago. It's unique - there's nothing like it in the area to my knowledge and the type of place you'd buy rather more with your heart and not so much with your head.
Bottom line is its worth what its worth to you - you can't make robust comparisons with similar property in the area because there isn't any or look at £ per M2 because that only really works on identikit housing estates or even decide if its going to be a good investment because nobody knows.
We viewed several character and period houses a little north of that area a couple of years ago and knowingly overpaid to secure exactly the house we wanted rather than trying to screw every penny out of the best possible deal on paper. Sometimes that's what you have to do to get what you want and pushing too hard will leave you with nothing but a pile of bills from surveyors and solicitors as well as a house you're trying to sell that'll eventually get tainted because it's been on the market for a long time making prospective buyers start to wonder why it's not sold yet.
Nobody can make the decision for you no matter how many valuations you can get your hands on and at the end of the day all they are are best guesses with no guarantees. It's your money you're spending but IMO it's a lovely house in a equally lovely village and area.
Life's too short and all that...
Nicely summed up... Bottom line is its worth what its worth to you - you can't make robust comparisons with similar property in the area because there isn't any or look at £ per M2 because that only really works on identikit housing estates or even decide if its going to be a good investment because nobody knows.
We viewed several character and period houses a little north of that area a couple of years ago and knowingly overpaid to secure exactly the house we wanted rather than trying to screw every penny out of the best possible deal on paper. Sometimes that's what you have to do to get what you want and pushing too hard will leave you with nothing but a pile of bills from surveyors and solicitors as well as a house you're trying to sell that'll eventually get tainted because it's been on the market for a long time making prospective buyers start to wonder why it's not sold yet.
Nobody can make the decision for you no matter how many valuations you can get your hands on and at the end of the day all they are are best guesses with no guarantees. It's your money you're spending but IMO it's a lovely house in a equally lovely village and area.
Life's too short and all that...
That's exactly the way I'm trying to look at it, and to be honest I wouldn't be surprised if a valuer came back with such a broad spread (with the purchase price somewhere within it) that their valuation was utterly meaningless anyway - at least in terms of validating that it is a sound financial commitment.
Personally, if the conversation between valuer and mortgage company is such that they'll make an offer, then I'll be appeased.
As someone who many years ago used to be an Estate Agent and has bought and sold a unique property myself, a couple of things to bear in mind (you haven't mentioned any figures so going with examples).
1) Mortgage valuations regularly come back as a % under the purchase price. In fact, in all my time selling houses, 90% had this. The valuer will always err on the side of caution and is never going to say it is worth more than the price agreed. There is no science or magic formula for this, it is his opinion on the day in question, nothing more.
2) Resell ability is what you are actually worried about, easiest way to check this (and as a consequence work out if you are happy paying what you have already agreed) is search on all properties of the same criteria within a 5 miles radius, so for example 4 bed detached. See where yours sits on the list and adjust the price up and down depending on size, land, area, character etc and then see if your the property stacks up against the competition.
If nothing else tickles your fancy in the same bracket, you have your answer
1) Mortgage valuations regularly come back as a % under the purchase price. In fact, in all my time selling houses, 90% had this. The valuer will always err on the side of caution and is never going to say it is worth more than the price agreed. There is no science or magic formula for this, it is his opinion on the day in question, nothing more.
2) Resell ability is what you are actually worried about, easiest way to check this (and as a consequence work out if you are happy paying what you have already agreed) is search on all properties of the same criteria within a 5 miles radius, so for example 4 bed detached. See where yours sits on the list and adjust the price up and down depending on size, land, area, character etc and then see if your the property stacks up against the competition.
If nothing else tickles your fancy in the same bracket, you have your answer
Edited by Herbs on Wednesday 29th March 10:30
Edited by Herbs on Wednesday 29th March 10:31
Vocal Minority said:
Character properties come into their own when you will love it and live there for year upon year upon year and lavish attention and love on it and make it a home, think about what it is worth to you, not it's value. If you think you'll get bored in 3-5 years, maybe something more conventional and easier to move on would be better.
This seemed like good advice.From what the OP has said he'd be paying a slight premium on a cost/m2 basis. It's an odd thing but every time you buy a property you are the person who, at that time, will pay more than anyone else so the immediate value to others will always be less...
As a RICS member I see little point in getting another valuation. A property is worth what a willing buyer is prepared to pay a willing seller for it. Therefore once you buy it that becomes the price.
A valuer who may be concerned about being sued in the event the valuation is wrong may value it at less than that price to reflect the limited market but that doesn't mean it is worth less.
If you are happy with the price just get on with the deal, if you want to reduce your offer do so, but I see no real benefit to another valuation.
A valuer who may be concerned about being sued in the event the valuation is wrong may value it at less than that price to reflect the limited market but that doesn't mean it is worth less.
If you are happy with the price just get on with the deal, if you want to reduce your offer do so, but I see no real benefit to another valuation.
I think it's almost binary with a 'unique' property. It may sell quickly (if the right buyer sees it as it goes on the market) or it may sell (very) slowly (because the right buyer doesn't come along for some time). You can't predict which it will be at an undefined point in the future. I think as a buyer of a 'unique' property you have to accept that.
Ultimately, as long as the value for what it is bears comparison with properties providing similar in the area I think you have to trust your own judgment and accept that there should be a similar buyer out there in future.
We bought something relatively unique in Shropshire where it is much more expensive relative to the average than your property is for North Essex. We've accepted it could easily take a year to sell if the right buyer doesn't see it / isn't in a position to move when we come to sell. However, for us, for now, it is the right property and we've taken that chance.
Ultimately, as long as the value for what it is bears comparison with properties providing similar in the area I think you have to trust your own judgment and accept that there should be a similar buyer out there in future.
We bought something relatively unique in Shropshire where it is much more expensive relative to the average than your property is for North Essex. We've accepted it could easily take a year to sell if the right buyer doesn't see it / isn't in a position to move when we come to sell. However, for us, for now, it is the right property and we've taken that chance.
Chrisgr31 said:
As a RICS member I see little point in getting another valuation. A property is worth what a willing buyer is prepared to pay a willing seller for it. Therefore once you buy it that becomes the price.
A valuer who may be concerned about being sued in the event the valuation is wrong may value it at less than that price to reflect the limited market but that doesn't mean it is worth less.
If you are happy with the price just get on with the deal, if you want to reduce your offer do so, but I see no real benefit to another valuation.
This tells you all you need to know, in my experience.A valuer who may be concerned about being sued in the event the valuation is wrong may value it at less than that price to reflect the limited market but that doesn't mean it is worth less.
If you are happy with the price just get on with the deal, if you want to reduce your offer do so, but I see no real benefit to another valuation.
brrapp said:
Valuers aren't magicians, they have to rely on 1) previous valuations for that property with an index-linked update, 2) valuations of similar properties nearby, 3) valuations of similar properties elsewhere with an adjustment for area.
^^^ThisI sold a house that I built and it was a new build in an 1950's area as well as being a 5 bed with a single garage (it was a narrow plot)
Consequently the valuations I had were all over the place.
Simply put something is worth what someone will pay and with Church conversions or homes with spectacular views it simply isn't a numbers exercise.
Well... it seems the wheels fell off in a rather spectacular fashion yesterday, when I received the following quote from the valuer, via the mortgage broker:
"After a review of the information provided by the selling agent regarding viewings etc I can confirm that I am still
unable to recommend the property suitable security. Whilst the conversion has been carried out to a superb standard
there is a limited market for such conversions, especially due to the proximity of the graveyard. We are of the opinion
that the property appeals to a niche market and that the property would therefore not appeal to the whole market"
So the mortgage provider will not lend on the property at any price!
"After a review of the information provided by the selling agent regarding viewings etc I can confirm that I am still
unable to recommend the property suitable security. Whilst the conversion has been carried out to a superb standard
there is a limited market for such conversions, especially due to the proximity of the graveyard. We are of the opinion
that the property appeals to a niche market and that the property would therefore not appeal to the whole market"
So the mortgage provider will not lend on the property at any price!
TA14 said:
Time for a new broker and mortgage company.
With respect, I'm not sure that would help.Assuming the valuer is independent of the mortgage company (and he's certainly independent of the mortgage broker!) then the issue is with neither the mortgage company or the broker! It is the valuer who is recommending that the mortgage company do not lend on the property.
I don't know whether the valuer IS independent of the mortgage company, that's something I'll be asking this morning... but if what others have already said on this thread is true (and I've no reason to doubt it) then the easiest way for the next 'valuer' to reach a value is by using any previous valuations as a starting point.
So whilst there almost certainly will be lenders who will lend on the property, there's no guarantee that this recommendation won't taint other people's view either. Or not be a view shared by other valuers.
It isn't like we were going balls-deep for a mortgage anyway. It was less than 50% LTV, so the bank's exposure, whilst not negligible, was always less than ours. I could even have envisaged a scenario whereby the valuer came back with a lower figure to reflect the 'risk' of a slow resale - but to recommend refusing to lend on it at all was a big shock.
Time to speak to broker and Estate Agent and see what they say.
My initial response is that that's a load of b
ks, but then I remembered that my wife wouldn't let us look at a couple of converted churches because of the risk of ghosts.
I'm guessing high-street lender that has plenty of other people to lend to? Go to a specialist and see if you get on.
Before I got to your last post, I was going to suggest that you don't need another valuation, though you may need another valuer. The question to ask isn't how much is this worth, but how much would you have to discount it if you needed to move in a reasonable time-frame? You'd be looking to tempt buyers lower down the ladder to jump up for your property by moving it into their price range and competing with worse properties that don't have close proximity to dead people. Maybe a valuer can help with that, maybe you just need to find the sold prices for other stuff nearby that's less and judge the point someone would choose to jump to your property.
ks, but then I remembered that my wife wouldn't let us look at a couple of converted churches because of the risk of ghosts.I'm guessing high-street lender that has plenty of other people to lend to? Go to a specialist and see if you get on.
Before I got to your last post, I was going to suggest that you don't need another valuation, though you may need another valuer. The question to ask isn't how much is this worth, but how much would you have to discount it if you needed to move in a reasonable time-frame? You'd be looking to tempt buyers lower down the ladder to jump up for your property by moving it into their price range and competing with worse properties that don't have close proximity to dead people. Maybe a valuer can help with that, maybe you just need to find the sold prices for other stuff nearby that's less and judge the point someone would choose to jump to your property.
timetex said:
Well... it seems the wheels fell off in a rather spectacular fashion yesterday, when I received the following quote from the valuer, via the mortgage broker:
"After a review of the information provided by the selling agent regarding viewings etc I can confirm that I am still
unable to recommend the property suitable security. Whilst the conversion has been carried out to a superb standard
there is a limited market for such conversions, especially due to the proximity of the graveyard. We are of the opinion
that the property appeals to a niche market and that the property would therefore not appeal to the whole market"
So the mortgage provider will not lend on the property at any price!
I'd find this very off putting, even if you get sorted, you'll be conscious of a potential resale nightmare. "After a review of the information provided by the selling agent regarding viewings etc I can confirm that I am still
unable to recommend the property suitable security. Whilst the conversion has been carried out to a superb standard
there is a limited market for such conversions, especially due to the proximity of the graveyard. We are of the opinion
that the property appeals to a niche market and that the property would therefore not appeal to the whole market"
So the mortgage provider will not lend on the property at any price!
PositronicRay said:
I'd find this very off putting, even if you get sorted, you'll be conscious of a potential resale nightmare.
That's very much the situation we find ourselves in.Even if we scrape around and find someone prepared to lend, an already limited market of potential buyers is now reduced further to exclude 'purchasers who want to use a High Street lender'.
Of course all of this is moot if we don't want/need to sell again, but if there's another property squeeze on the way (whether ripples from the London market, or Brexit-based) then it is the character homes which stay around longest and are the toughest to sell. People want 'safe' at that point.
timetex said:
Even if we scrape around and find someone prepared to lend, an already limited market of potential buyers is now reduced further to exclude 'purchasers who want to use a High Street lender'.
On the bright side you're not any worse off than you ever were it's just that you understand it better now. Whilst the exact location of this church will make it unique, it's rare but not unique - just like a TVR. And as with a TVR some insurance companies won't quote there are specialists who survive for this market. Converted churches are rare as a % of the market but there are plenty of them you just need someone who is used to working in that market (and your broker should have known all of this) as well as recognising that if you want to shift it quickly you'll take a bigger than average hit, just like a TVR So how much do you want it? (Just li...paulrockliffe said:
My initial response is that that's a load of bks, but then I remembered that my wife wouldn't let us look at a couple of converted churches because of the risk of ghosts.
I'm guessing high-street lender that has plenty of other people to lend to? Go to a specialist and see if you get on.
Before I got to your last post, I was going to suggest that you don't need another valuation, though you may need another valuer. The question to ask isn't how much is this worth, but how much would you have to discount it if you needed to move in a reasonable time-frame? You'd be looking to tempt buyers lower down the ladder to jump up for your property by moving it into their price range and competing with worse properties that don't have close proximity to dead people. Maybe a valuer can help with that, maybe you just need to find the sold prices for other stuff nearby that's less and judge the point someone would choose to jump to your property.
So the last paragraph makes total sense to me, and is exactly what I was thinking. However it seems to be black and white in the Valuer's eyes - he's not valued it lower, but has recommended that they don't lend at all.ks, but then I remembered that my wife wouldn't let us look at a couple of converted churches because of the risk of ghosts.I'm guessing high-street lender that has plenty of other people to lend to? Go to a specialist and see if you get on.
Before I got to your last post, I was going to suggest that you don't need another valuation, though you may need another valuer. The question to ask isn't how much is this worth, but how much would you have to discount it if you needed to move in a reasonable time-frame? You'd be looking to tempt buyers lower down the ladder to jump up for your property by moving it into their price range and competing with worse properties that don't have close proximity to dead people. Maybe a valuer can help with that, maybe you just need to find the sold prices for other stuff nearby that's less and judge the point someone would choose to jump to your property.
The logic seems right - but perhaps there's a self-fulfilling prophecy with valuers putting lower values on properties for these 'marketability' reasons. If a valuer said a property is worth £1m, but only £800k if you wanted a quick sale (to tempt buyers from lower down the ladder) then this would immediately revalue the property at £800k, and you'd then need to tempt buyers from even lower, etc. etc.
God knows.
timetex said:
The logic seems right - but perhaps there's a self-fulfilling prophecy with valuers putting lower values on properties for these 'marketability' reasons. If a valuer said a property is worth £1m, but only £800k if you wanted a quick sale (to tempt buyers from lower down the ladder) then this would immediately revalue the property at £800k, and you'd then need to tempt buyers from even lower, etc. etc.
God knows.
No, the valuer has to value for a sale between a willing seller and a willing buyer. In your example he would have to value at £1M with a footnote that if a quick sale is required the discount needed to be given may be a higher % than for a more conventional property. (Otherwise, as you point out, you'd end up with the property being valued at £1.)God knows.
Gassing Station | Homes, Gardens and DIY | Top of Page | What's New | My Stuff