Mortgage lender has down valued potential property purchase
Discussion
We've been using a recommended broker for our mortgage application process.
He's been great & i can't fault him, or his work ethic.
We had our offer accepted on a house, slightly under the ask, great!
We passed all the credit checks & things were going very smoothly, until i received an email yesterday from Nationwide saying that the property we were set to purchase was down valued by £15,000 post valuation.
I asked to see a copy of the surveyors report, however as it was a 'free' service (i know it'll be added into the mortgage somewhere), that they won't give me/the broker a copy.
The broker asked if it was anything wrong with the property, or it's condition for the down valuation, or work that needs doing, there was nothing to report other than 'we value the property at this much'.
We are pretty gutted to say the least & felt that what we had accepted was pretty much bang on for the area, i've relayed the above info to the EA, who was also pretty shocked (but they would be).
The property is in tip-top condition, fantastic condition throughout, new everything & immaculately decorated, with recent full re-wire & a new roof.
We're at a bit of a cross-roads what to do, either we raise our deposit amount (this is not an option as we don't physically have any access to any more money for this).
Or the seller comes down £15k - i also cannot see this.
The only question i'm left wondering is could the surveyor have got it so wrong? - My brain is saying, a few thousand here or there, maybe, but not £15k!
Comparison wise, there's only been 2 houses sold on the road in the past 12-18 months:
One of them is of a similar sort of size, but, not in as good condition throughout, or outside, which sold for £10k less than the one we were buying was valued at.
The other was a 4 bed that sold for nearly £45k more than the one that we offered on was valued at by the mortgage lender, again, in similar condition to the one we offered on.
The house is within the catchment area for the best local primary school & best local secondary school also, as well as having good transport links etc.
Whilst it is an ideal first home for us & we love it, we're also realists, but i was wondering if people on PH had any experiences/advise on this as it's our first property purchase.
He's been great & i can't fault him, or his work ethic.
We had our offer accepted on a house, slightly under the ask, great!
We passed all the credit checks & things were going very smoothly, until i received an email yesterday from Nationwide saying that the property we were set to purchase was down valued by £15,000 post valuation.
I asked to see a copy of the surveyors report, however as it was a 'free' service (i know it'll be added into the mortgage somewhere), that they won't give me/the broker a copy.
The broker asked if it was anything wrong with the property, or it's condition for the down valuation, or work that needs doing, there was nothing to report other than 'we value the property at this much'.
We are pretty gutted to say the least & felt that what we had accepted was pretty much bang on for the area, i've relayed the above info to the EA, who was also pretty shocked (but they would be).
The property is in tip-top condition, fantastic condition throughout, new everything & immaculately decorated, with recent full re-wire & a new roof.
We're at a bit of a cross-roads what to do, either we raise our deposit amount (this is not an option as we don't physically have any access to any more money for this).
Or the seller comes down £15k - i also cannot see this.
The only question i'm left wondering is could the surveyor have got it so wrong? - My brain is saying, a few thousand here or there, maybe, but not £15k!
Comparison wise, there's only been 2 houses sold on the road in the past 12-18 months:
One of them is of a similar sort of size, but, not in as good condition throughout, or outside, which sold for £10k less than the one we were buying was valued at.
The other was a 4 bed that sold for nearly £45k more than the one that we offered on was valued at by the mortgage lender, again, in similar condition to the one we offered on.
The house is within the catchment area for the best local primary school & best local secondary school also, as well as having good transport links etc.
Whilst it is an ideal first home for us & we love it, we're also realists, but i was wondering if people on PH had any experiences/advise on this as it's our first property purchase.
Get an independent valuation done and see what they say, yes it will cost a couple of hundred but if its the house you want then its worth it.
Depends on the valuation swell I've heard of them just doing a drive by to get a valuation & at the end of the day its opinion on value. Unless they did a bigger valuation/survey and found issues with the property but they should tell you if thats the case.
Depends on the valuation swell I've heard of them just doing a drive by to get a valuation & at the end of the day its opinion on value. Unless they did a bigger valuation/survey and found issues with the property but they should tell you if thats the case.
Based on the couple of occasions I've had input from a surveyor re a house, I judge them as just a bunch of ignorant, over qualified crooks. The last one decided, after the house, built like a battleship, has stood perfectly still for 50yrs, it might be liable to subsidence!! There are 800 exactly the same house on my estate, not one of them has moved a mm since being built. After some investigation, he made the claim because the soil has a high clay content. But forgot to see that the dam house is on a 24" sold raft foundation. When my sister bought her house, the surveyor noted rising damp in a wall. The wall in question had a stain pattern looked odd for that, a few questions to a neighbour, revealed why. The cistern in the loft over flowed for a few days, before the absent tenants returned to turn it off! Hence the water stain on the wall!
Dan_M5 said:
Get an independent valuation done and see what they say, yes it will cost a couple of hundred but if its the house you want then its worth it.
Depends on the valuation swell I've heard of them just doing a drive by to get a valuation & at the end of the day its opinion on value. Unless they did a bigger valuation/survey and found issues with the property but they should tell you if thats the case.
The surveyor actually went in the house, this i do know.Depends on the valuation swell I've heard of them just doing a drive by to get a valuation & at the end of the day its opinion on value. Unless they did a bigger valuation/survey and found issues with the property but they should tell you if thats the case.
I'm happy to pay a couple of hundred to get an independent valuation, but won't the lenders just poo-poo it given that theirs was so much lower?
There isn't really any comparible data other than the 2 i'd mentioned that i can find.
The financial institution that you are currently trying to mortgage through are not the only possibilities. I would be putting the feelers out elsewhere if I were the broker. I had a situation once where a broker found a mortgage and it was all going swimmingly until the bank asked for evidence of a certain lease length which was higher than on their original offer and therefore conflicted with their agreement in principle. Found another bank within hours via the broker panel and went with them instead.
Increasing your deposit wouldn't necessarily help in this situation anyway. The mortgage company may still decline to lend on it, as they need to protect their investment and be able to resell the property if they repossess it. A house which values significantly less than the agreed price could indicate that it needs to be dropped further in order to sell it...
Nobody has yet mentioned talking to the EA and vendor about reducing your offer. You could be in a strong negotiating position, even though the valuer hasn't given specific reasons.
Nobody has yet mentioned talking to the EA and vendor about reducing your offer. You could be in a strong negotiating position, even though the valuer hasn't given specific reasons.
timetex said:
Increasing your deposit wouldn't necessarily help in this situation anyway. The mortgage company may still decline to lend on it, as they need to protect their investment and be able to resell the property if they repossess it. A house which values significantly less than the agreed price could indicate that it needs to be dropped further in order to sell it...
Nobody has yet mentioned talking to the EA and vendor about reducing your offer. You could be in a strong negotiating position, even though the valuer hasn't given specific reasons.
I've an email from the lender basically stating that we need to put in a bigger deposit, it says their surveyor values the property at £185k and they will not move on that valuation.Nobody has yet mentioned talking to the EA and vendor about reducing your offer. You could be in a strong negotiating position, even though the valuer hasn't given specific reasons.
I have just spoken with the EA, he has confirmed what the lenders have said & said maybe a compromise combining the following: we increase deposit, the vendor reduces their accepting offer & they reduce their fees.
I did say we came up on the offer once already & there isn't anymore money available for a bigger deposit.
It appears the vendor is trying to get the house they're buyind reduced (the house they're buying is a a refurbed house currently empty).
The EA did say and i quote 'i must admit i didn't think we'd have an issue with this one'. What that means i don't know.
I guess this comes down to 1 thing, which is how much the vendor needs to be able to move to where they want too & i know they're super keen to buy the property they want.
i had an interesting incident when purchasing my current house.
Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Bandit said:
i had an interesting incident when purchasing my current house.
Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
If it's a terrace then rebuild price is usually 2/3 times property value because if they have to rebuild your house they usually have to rebuild the houses on either side.Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Bandit said:
i had an interesting incident when purchasing my current house.
Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Unless it is a detached house that is not unusual because it takes other houses or flats with it when it goes Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Bandit said:
i had an interesting incident when purchasing my current house.
Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Depends where in the country it is.Surveyor valued the house for what we paid/needed so all good there but then insisted that the house be insured for more than it was valued at as the rebuild cost would have been significantly higher than the house was worth ....go figure !
Build prices are relatively level nationally. In some areas, there's massive amounts of value in the buildable plot - so rebuild values can be a chunk below sale values. In other areas, sale values are lower than rebuild costs - before, as pointed out, costs of repairing all the other bits around that got scorched...
Nationwide offered a 'free' survey as part of the finance product, they under no circumstances will share it as it's a 'free' product.
I did say to my broker about getting an independent valuation & he said not to bother, there won't be a £15k fluctuation in it.
I also spoke with my dad who had a word with a friend of his who sells property (all be it commercial), he has also made some calls & said the property is over valued by the EA in the first place & suspects it's what the sellers need to buy the property they need.
i subsequently have had a meeting with the EA & they've said the sellers are desperate to sell to us, but have no conceded that it was over valued, although they won't actually fully admit it in those words.
I've told them our lender won't lend on the agreed price unless we almost double our deposit, which is just not possible.
The EA have also contacted the EA of the property our vendors were purchasing to see if they can get any movement on the price which they cannot, they also claim to have another party interested in the property.
The only option left is now for the vendors of our property to be able to find the difference they need to purchase the new place from relatives, which will mean they can sell to us at the valued price, although i would say its 99% now not happening!
We're pretty gutted to say the least!
Although, rather that than be in the red portentially a few months down the line!
I did say to my broker about getting an independent valuation & he said not to bother, there won't be a £15k fluctuation in it.
I also spoke with my dad who had a word with a friend of his who sells property (all be it commercial), he has also made some calls & said the property is over valued by the EA in the first place & suspects it's what the sellers need to buy the property they need.
i subsequently have had a meeting with the EA & they've said the sellers are desperate to sell to us, but have no conceded that it was over valued, although they won't actually fully admit it in those words.
I've told them our lender won't lend on the agreed price unless we almost double our deposit, which is just not possible.
The EA have also contacted the EA of the property our vendors were purchasing to see if they can get any movement on the price which they cannot, they also claim to have another party interested in the property.
The only option left is now for the vendors of our property to be able to find the difference they need to purchase the new place from relatives, which will mean they can sell to us at the valued price, although i would say its 99% now not happening!
We're pretty gutted to say the least!
Although, rather that than be in the red portentially a few months down the line!
Your vendor must realise that if they sell the property to anyone else who will be using a mortgage, the same situation is likely.
Whilst I wouldn't usually suggest letting a valuation affect the price paid, it sounds like it is up to the vendor to either accept the lower price or justify their valuation to the valuer/lender. The former is more straightforward if they can absorb the lower price.
Slightly O/T but I re-mortgaged my home last year. The lender-appointed valuer actually visited, which I found surprising, but then astonishingly, agreed the valuation with me before he left, which was convenient!
Whilst I wouldn't usually suggest letting a valuation affect the price paid, it sounds like it is up to the vendor to either accept the lower price or justify their valuation to the valuer/lender. The former is more straightforward if they can absorb the lower price.
Slightly O/T but I re-mortgaged my home last year. The lender-appointed valuer actually visited, which I found surprising, but then astonishingly, agreed the valuation with me before he left, which was convenient!
theguvernor15 said:
We're pretty gutted to say the least!
Although, rather that than be in the red portentially a few months down the line!
If you have set your hearts on the place and you are going to live their for years then I would seek out another mortgage lender and be honest with them up front about the situation. If its 15k on a 200k house then thats only 7% and if you are there for many years that may be insignificant in the end. I would try that before ending up in a situation where you might regret not buying it.Although, rather that than be in the red portentially a few months down the line!
Have you spoken to our resident mortgage broker on here Sarnie?
sideways sid said:
Your vendor must realise that if they sell the property to anyone else who will be using a mortgage, the same situation is likely.
Whilst I wouldn't usually suggest letting a valuation affect the price paid, it sounds like it is up to the vendor to either accept the lower price or justify their valuation to the valuer/lender. The former is more straightforward if they can absorb the lower price.
Slightly O/T but I re-mortgaged my home last year. The lender-appointed valuer actually visited, which I found surprising, but then astonishingly, agreed the valuation with me before he left, which was convenient!
This is currently where we are at, the vendor has said they can come down a bit more (still £10k off what the valuation is at, apparently borrowing money off of their family), i've said we're maxed out and they need to find the difference of £10k otherwise the deal just isn't going to go any further, they're fully aware that they will get this situation further down the line now, we could go to a 95% mortgage, however the repayments are a lot of money & it's not something we feel comfortable doing.Whilst I wouldn't usually suggest letting a valuation affect the price paid, it sounds like it is up to the vendor to either accept the lower price or justify their valuation to the valuer/lender. The former is more straightforward if they can absorb the lower price.
Slightly O/T but I re-mortgaged my home last year. The lender-appointed valuer actually visited, which I found surprising, but then astonishingly, agreed the valuation with me before he left, which was convenient!
We've been told by the EA that we'll know what's going on by the morning as i've said i don't want this to drag on for too much longer, i will update the thread either way.
TheAngryDog said:
I went through the same thing with my house purchase. In the end we agreed that we go up 5k and they come down 10k.
Sorted.
Our problem lies in the fact the lender only values the property at £185k.Sorted.
We'd agreed a price of £200k for the house with a £20k deposit.
Our mortgage was 90%,
The vendors have said they can come down to £195k as they're potentially borrowing money off of their family.
We can't afford the payments of the 95% mortgage so they have to come down to what the property is valued at.
When looking more into local prices it seems for what has sold it will still (at £185) be the most expensive house sold by nearly £15k.
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