Mortgage : Lender down valued a huge amount, advice.
Discussion
We are in the process of trying to buy a house, asking price 485k, offer accepted at 465k, valuation has just come in at 380k!
Fairly stumped how, as we have been looking for a while and think the offer was fair, we have a homebuyers which agrees with 465k.
Only reasons given are that 'the report is not backed up by compariables' and that its on an 'unmaded and unadopted road' which it is not.
We have the local searches and streetview images as proof it's a publicly maintaibed tarmac road.
Compariables are slightly harder to come by, there is nothing sold within 6months and 0.25miles, only three within 0.5miles and another 4-5 upto 1mile. Thats if you take everything, detached, semi det, bungalow. So we're looking at cost per sq ft, and patching it together.
Other half of the semi sold for a similar price to our offer in 2012.
Estate agents valuer is clearly very busy with the day job and rushing it at best, mortgage advisor fairly busy, etc.
However we now have a Legal&General appeal form from the lenders NatWest. In which we need to list our three comparables.
Basically any advice and or thoughts welcome.
Daniel
Fairly stumped how, as we have been looking for a while and think the offer was fair, we have a homebuyers which agrees with 465k.
Only reasons given are that 'the report is not backed up by compariables' and that its on an 'unmaded and unadopted road' which it is not.
We have the local searches and streetview images as proof it's a publicly maintaibed tarmac road.
Compariables are slightly harder to come by, there is nothing sold within 6months and 0.25miles, only three within 0.5miles and another 4-5 upto 1mile. Thats if you take everything, detached, semi det, bungalow. So we're looking at cost per sq ft, and patching it together.
Other half of the semi sold for a similar price to our offer in 2012.
Estate agents valuer is clearly very busy with the day job and rushing it at best, mortgage advisor fairly busy, etc.
However we now have a Legal&General appeal form from the lenders NatWest. In which we need to list our three comparables.
Basically any advice and or thoughts welcome.
Daniel
Thanks all for the thoughts.
We have just submitted the form to the broker, having significantly improved it from the two drafts the estate agents valuer produced. its only two pages, three comparabilities max, must be within 6 months, and ideally within 0.5 miles although some allowed on that, must all be sold obviously.
In addition we have an excel sheet which contains nearly 20 properties sold within the last year, tabulated with saleprice/area/£perarea and RM links.
I could share these with specific people if appropriate and or helpful, Om me your email address.
The waiting game begins!
Daniel
We have just submitted the form to the broker, having significantly improved it from the two drafts the estate agents valuer produced. its only two pages, three comparabilities max, must be within 6 months, and ideally within 0.5 miles although some allowed on that, must all be sold obviously.
In addition we have an excel sheet which contains nearly 20 properties sold within the last year, tabulated with saleprice/area/£perarea and RM links.
I could share these with specific people if appropriate and or helpful, Om me your email address.
The waiting game begins!
Daniel
coljoh148 said:
Is the 385k not enough for mortgage purpose? I've had one valued down before, didn't matter as the value didn't exceed the loan amount.
No, we don't have the funds to bridge from 380k to 465k. The AIP was for 90% ratio, allowing us to be buy no-chain with retaining my current house during the transition.
We have maybe 20k additional we have access to, but no. Even with my house sold we wouldn't be able to bridge the gap.
Daniel
Time for a quick update. For some technical reason we don't have the full report, just a screenshot from the lender, but in short they discounted two of the compariables as not being similar enough, and the third which was already the lowest value and £/sqm they 'explained away' by it condition. No mention of the adopted or otherwise road.
So very annoying, I feel like they haven't given it the time and consideration even this second time round, but also was half prepared for it as I understand they rarely overturn them and that this isn't the simplest or more attractive mortgage so computer says no.
Their valuation is imo absurd. It's hard to value a property, with our offer being something we where happy with but by no means purely driven be economics. If selling in a rush this property would have to go for less than market value. However certainly from what we have seen, you would never in a month of Easter Sundays get this house for 380k given others in the area for that price are tatty 1970's 3bed semi-dets and this is half an Edwardian mansion with 4-5bedrooms.
So very annoying, I feel like they haven't given it the time and consideration even this second time round, but also was half prepared for it as I understand they rarely overturn them and that this isn't the simplest or more attractive mortgage so computer says no.
Their valuation is imo absurd. It's hard to value a property, with our offer being something we where happy with but by no means purely driven be economics. If selling in a rush this property would have to go for less than market value. However certainly from what we have seen, you would never in a month of Easter Sundays get this house for 380k given others in the area for that price are tatty 1970's 3bed semi-dets and this is half an Edwardian mansion with 4-5bedrooms.
I understand Accord require out homebuyers to be within a month so I'm currently waiting for the surveyors to get back and see what we can do there in terms of re-issuing the survey, with or without a second visit to the property.
They may also decided to do their own valuation on top I understand as a second opinion, which will either be Legal&General who the previous valuation was with or Seseme Bankhall. Sigh.
Daniel
They may also decided to do their own valuation on top I understand as a second opinion, which will either be Legal&General who the previous valuation was with or Seseme Bankhall. Sigh.
Daniel
Oh yes, absolutely. I would have slightly more truck with it if they said 'its valued at this, but due to house in question we require a minimum of XX% deposit' but ultimately the lender are protecting their investment and the surveyor their name etc and as they hold the cards and have been burnt before I can't fault it.
Obviously in with this we will be looking to re-evaluate the offer made and get a discount on the house, and we can do some back filling, but it's still a big ask all round if we can't secure any more lending.
Daniel
Obviously in with this we will be looking to re-evaluate the offer made and get a discount on the house, and we can do some back filling, but it's still a big ask all round if we can't secure any more lending.
Daniel
Rangeroverover said:
Here is your problem, split up semi stateleys are very hard to value, all the downsides of an historic building but not all the value, buyers are not queuing up for these, maybe find a specialist lender
Yes, fair. We are currently applying for a mortgage from a Lender who claims to lend against homebuyers valuation. We shall watch this space.Do you have ant suggestions of specialist lenders? Not really something I'm overly aware of.
Daniel
The lender is aware of the valuation given by the Lender (NatWest) by the agents used (Legal and General) and that other lenders we have looked at (Santander etc) also use Legal and General with the implications of that.
We have reserves sufficient to meet half way if we pulled everything together, but then there is also a reasonable amount of work needed on the house in the next free year. Full rewire, bathroom, and all the rendering is shot which is likely the time to consider external wall insulation as it's solid walls.
Hence we are looking to get a reasonable but closer, and then out forwards a reasonable, but likely somewhat lower, offer to the vendor.
Daniel
We have reserves sufficient to meet half way if we pulled everything together, but then there is also a reasonable amount of work needed on the house in the next free year. Full rewire, bathroom, and all the rendering is shot which is likely the time to consider external wall insulation as it's solid walls.
Hence we are looking to get a reasonable but closer, and then out forwards a reasonable, but likely somewhat lower, offer to the vendor.
Daniel
I thought I had mentioned, but we have also put my property up for sale. I'm not based out of my partners flat for work anyway so it makes sense to sell now.
This doesn't free up much capital as we can use the bank of mum and dad to bridge, but also simplifies my financial obligations.
Daniel
This doesn't free up much capital as we can use the bank of mum and dad to bridge, but also simplifies my financial obligations.
Daniel
Sarnie said:
This isn't a lender issue.............they didn't down value the property.
What is your broker saying?
What have Accord said?
What is your broker saying?
What have Accord said?
Fair.
He doesn't say a huge amount, but appears to be doing a reasonable job and pushing onwards.
Accord have said they no longer do mortgages off the back of a homebuyers. Fully admit their advisor gave us the wrong advice, and have offered to wave both the valuation fee and £1000 product fee as an apology. That was this afternoons news.
Obviously that great, but only if they come back with a valuation that works for us. We appear to have little to loose on pushing on with that, so watch this space. Obviously it might come back fine, and we may be able to lean on them a little even if it's a bit low.
My house is also attracting a lot of interest, so hopefully we can pull off a sale there and free up some liquidity and go back to the vendor with a strong enough offer, and enough documented evidence that they need to move, that we can close the sale, which is what everyone wants.
Time only will tell.
Daniel
Accords Surveyor went out to the property this morning, took photos, confirmed report will be with us in two days time.
This was a Legal and General surveyor, as per the Natwest valuation, but not the same person and obviously certainly not a 'desktop' valuation based on the other.
I guess only time will tell, fingers are crossed it comes out more generous than 380k.
However on the flipside I have recently learned that Natwest will lend us the full 380k they have valued the house at, rather than 90% of that (342k) so while still £39k below the original 419k requested is more than we previously thought. Not sure how we got this wrong as I am sure we questioned it. However interesting none the less.
Movement from the vendors is expected in my mind I think unless this latest valuation comes up bang on the mark, to reflect the issues with have and the risk should we come to re-sell. However with sale of my house looking manageable, it looks to me that we could perhaps get there somehow either way, We might view a couple of current houses on the market this weekend, just to keep this 'dream house' in perspective, but either way, onwards and upwards.
Daniel
This was a Legal and General surveyor, as per the Natwest valuation, but not the same person and obviously certainly not a 'desktop' valuation based on the other.
I guess only time will tell, fingers are crossed it comes out more generous than 380k.
However on the flipside I have recently learned that Natwest will lend us the full 380k they have valued the house at, rather than 90% of that (342k) so while still £39k below the original 419k requested is more than we previously thought. Not sure how we got this wrong as I am sure we questioned it. However interesting none the less.
Movement from the vendors is expected in my mind I think unless this latest valuation comes up bang on the mark, to reflect the issues with have and the risk should we come to re-sell. However with sale of my house looking manageable, it looks to me that we could perhaps get there somehow either way, We might view a couple of current houses on the market this weekend, just to keep this 'dream house' in perspective, but either way, onwards and upwards.
Daniel
Sarnie said:
Hmmm..............Really???
Natwest think it's worth £380k and are prepared to lend £380k???
Something is amiss here......
That's what I thought. Who knows. Wouldn't put it past the mortgage advisor to be wrong about that. Either way the application with NatWest had apparently lapsed. So fingers crossed for something reasonable from Accord I guess. Natwest think it's worth £380k and are prepared to lend £380k???
Something is amiss here......
Daniel
The Selfish said:
I had a similar thing - the official surveyor from the lender came back with a 30k under....
The surveyor simply didn't understand the London market.
They wouldn't budge - I tried everything. I even got an independent surveyor paid again who valued it at more than the asking price. However, the lender wouldn't change.
In the end - I had to find other ways to get the shortfall of the money - which was very frustrating and stressful.
2 years later...........and the house is worth much more than either of the numbers and I was correct to risk it!
Yes. All maddnes. I can't understand why a lot are unsuccessful, and it wouldn't supprise me if some appeals are applaulingly put together. However I've yet to hear of q single one every go through. Why have the process of that's the case. Not every valuation can't be perfect. The surveyor simply didn't understand the London market.
They wouldn't budge - I tried everything. I even got an independent surveyor paid again who valued it at more than the asking price. However, the lender wouldn't change.
In the end - I had to find other ways to get the shortfall of the money - which was very frustrating and stressful.
2 years later...........and the house is worth much more than either of the numbers and I was correct to risk it!
Sigh
Daniel
DonkeyApple said:
Good luck. It can be a right pain when you find the property you want but struggle to get everything to line up.
However, if valuers keep telling you that it’s worth a lower price then this is what every potential purchaser who is having to borrow will be finding and unless a cash buyer or near cash buyer appears then the vendor is going to have to deal much closer to the real price than the inflated price given by the estate agent.
Also, what kind of mortgage are you aiming for? Fixed? If so, what happens at rollover if the lender decides to mark your property back down should you manage to have got them to mark it up in the first instance? What’s your backup plan for finding a large amount of cash in 2,3 or 5 years time?
I think you need to be very careful if you are trying to force a lender to increase their valuation as they may do it once but may well not do it next time and want you to cover the change. And by all accounts you’d have stripped yourself to the bone to get it done in the first instance.
Yes. Seems reasonable.However, if valuers keep telling you that it’s worth a lower price then this is what every potential purchaser who is having to borrow will be finding and unless a cash buyer or near cash buyer appears then the vendor is going to have to deal much closer to the real price than the inflated price given by the estate agent.
Also, what kind of mortgage are you aiming for? Fixed? If so, what happens at rollover if the lender decides to mark your property back down should you manage to have got them to mark it up in the first instance? What’s your backup plan for finding a large amount of cash in 2,3 or 5 years time?
I think you need to be very careful if you are trying to force a lender to increase their valuation as they may do it once but may well not do it next time and want you to cover the change. And by all accounts you’d have stripped yourself to the bone to get it done in the first instance.
The plan is 5 years fixed, given the market conditions, so that is a concern but also be then we hope to have enough equity in that its not a major issue anyway.
Certainly I think we need to put it fairly robustly the the vendor if this second valuation is anything like the first, given this sort of risk. We hope to be there many years, like until well into retirement, 40 years or so. However life plan can change and we wouldn't want to be too trapped should jobs move, family changes, etc.
Daniel
So.
Accord got back to use this morning, valuation all fine, came up to 465k so they can lend the full amount as per our affordablility. This is 400k, down 20k from what we could afford with the primary lender, but a blood awesome result really.
Two out of the tree valuations (homebuyers, then two two lender) come out as per the offer.
We have put in a revised post-survay offer of 445k which has been declined, so we are spending the considering our next move.
Daniel
Accord got back to use this morning, valuation all fine, came up to 465k so they can lend the full amount as per our affordablility. This is 400k, down 20k from what we could afford with the primary lender, but a blood awesome result really.
Two out of the tree valuations (homebuyers, then two two lender) come out as per the offer.
We have put in a revised post-survay offer of 445k which has been declined, so we are spending the considering our next move.
Daniel
Jobbo said:
Is the vendor going to be willing to sell to you now? After dragging things out with the mortgage valuation you’ve got a valuation equal to your offer, but you’ve reduced the offer. I’d be putting the house back on the market if I were the seller.
It's another take on the situation.However they started taking viewings again a month ago, they haven't had any. The house has been on with the agent for two years, and was first listed all be it for 550 back in July 2014, no sale yet.
The vendor has personally said they want to sell to us as they like us. For whatever that's worth. Clearly not 20k. Who knows what is right, but for me it's worth asking given we really are going all out to get it though and to scrape together the cash. We could do it more easily onces my house has sold, but we have no idea when that will be and obviously don't want to keep people waiting longer then we have to.
Daniel
Yeah, I mean its hard to know isnt it.
The seller wants to sell, has their onward purchase, and has had little other interest, with the only other offer we know of falling through for unknown reasons. We want to buy, currently three adults and a dog living in a 2 bed flat, but we are also fairly young (30+28) and stretching ourselves a bit to get the house we want for our family home. However having had it rolling on for three months we're not to the day, thankfully.
As a timeline:
It was put on at £550 in 2014 with another agent, and didn't sell. They also listed the end of the garden for £250k, now sold and being built on.
Then with the agent at 495 in Aug 2016, reduced to 485 by the time we saw it.
We then agreed at 465k mid January and commissioned a home buyers and mortgage.
Had a second viewing end February, shortly before our lender came back with 380k valuation.
Then went with a lender who said they would lend against home-buyers, but then found they advised us wrong, tail between legs.
Valuation from them then came in at 465k, 24 hour after the survey, having presumably pulled out the stops for such a turn around.
As said, the main reason for the delay is the huge down valuation with our Lender of choice. We then went with a non-preferred vendor because a large number of the vendors used the same valuation company, legal & general, and we where advised its was likely that would come back the same. That then fell apart, there where very apologetic, and have pulled out all the stops to get this valuation turned around quickly. Part of my wonders is Accord have lent on Legal & General (came company, different surveyor) to get the valuation they wanted to avoid a formal complaint. We may never know that. And although we take some solace in the valuation of the home-buyers, that is obviously not the same as a lenders mortgage valuation, and they conflict of interest is different, as regardless of how professional the valuers are being there is a human element.
Who knows. I am now going to ring the Agents and say we can offer 455k, having spent the evening counting out beans and asking her parents for the additional 10k on top of the money we have borrowed from my parents. With the 27k stamp duty, 46k deposit, and 20k shortfall, to meet the asking price you talking 100k by the time you have paid for solicitors and three survays!
Partner is tied to half a the flat, which her sister lives in and cant offered buy her out yet. So while we're hopeful going to get that back within the three year window, likely to spend it in replacing shot render, and my house should create enough equity to pay back our parents as and when it sells, its all very real money and the extra 20k takes it from a bit of a stretch basically beyond us. At this point the 10k could make or break it.
The low valuation survey doesn't show urgent work, but real risk, that another buyer could face the same issue if we had to sell. The elec survey showed the wiring is 50 years old with no earth in any of the lighting, all metal fittings and switches throughout. The home-buyers highlighted plants growing through the roof into the loft space due to over hanging trees and no maintenance and that the chimney has cracks in it, all the render is shot, bathrooms are all 20yo bar one that's been rushed to sell. So while we love it, it also needs work.
Daniel
The seller wants to sell, has their onward purchase, and has had little other interest, with the only other offer we know of falling through for unknown reasons. We want to buy, currently three adults and a dog living in a 2 bed flat, but we are also fairly young (30+28) and stretching ourselves a bit to get the house we want for our family home. However having had it rolling on for three months we're not to the day, thankfully.
As a timeline:
It was put on at £550 in 2014 with another agent, and didn't sell. They also listed the end of the garden for £250k, now sold and being built on.
Then with the agent at 495 in Aug 2016, reduced to 485 by the time we saw it.
We then agreed at 465k mid January and commissioned a home buyers and mortgage.
Had a second viewing end February, shortly before our lender came back with 380k valuation.
Then went with a lender who said they would lend against home-buyers, but then found they advised us wrong, tail between legs.
Valuation from them then came in at 465k, 24 hour after the survey, having presumably pulled out the stops for such a turn around.
As said, the main reason for the delay is the huge down valuation with our Lender of choice. We then went with a non-preferred vendor because a large number of the vendors used the same valuation company, legal & general, and we where advised its was likely that would come back the same. That then fell apart, there where very apologetic, and have pulled out all the stops to get this valuation turned around quickly. Part of my wonders is Accord have lent on Legal & General (came company, different surveyor) to get the valuation they wanted to avoid a formal complaint. We may never know that. And although we take some solace in the valuation of the home-buyers, that is obviously not the same as a lenders mortgage valuation, and they conflict of interest is different, as regardless of how professional the valuers are being there is a human element.
Who knows. I am now going to ring the Agents and say we can offer 455k, having spent the evening counting out beans and asking her parents for the additional 10k on top of the money we have borrowed from my parents. With the 27k stamp duty, 46k deposit, and 20k shortfall, to meet the asking price you talking 100k by the time you have paid for solicitors and three survays!
Partner is tied to half a the flat, which her sister lives in and cant offered buy her out yet. So while we're hopeful going to get that back within the three year window, likely to spend it in replacing shot render, and my house should create enough equity to pay back our parents as and when it sells, its all very real money and the extra 20k takes it from a bit of a stretch basically beyond us. At this point the 10k could make or break it.
The low valuation survey doesn't show urgent work, but real risk, that another buyer could face the same issue if we had to sell. The elec survey showed the wiring is 50 years old with no earth in any of the lighting, all metal fittings and switches throughout. The home-buyers highlighted plants growing through the roof into the loft space due to over hanging trees and no maintenance and that the chimney has cracks in it, all the render is shot, bathrooms are all 20yo bar one that's been rushed to sell. So while we love it, it also needs work.
Daniel
Edited by dhutch on Friday 27th April 09:19
The 550k was already without the garden.
But yes, I mean we are aware that we are pushing the envelope of what we can afford. However while very tight now, it does become somewhat more free once my property is sold, and we should then get some equity from my partners flat when that is sold, which currently we expect to be within three years so we would also get 14k of the stamp duty back.
Its hard to know what to do, the days of property value shooting up, or guaranteed income related maternity pay and pensions etc are over, so there is a need to be appropriately cautious, however we have done the sums, accounted for the risks involved with rising interest rates, etc and we think we can do this. We're spend over a grand on three surveys, and an electrical inspection, and we have an amount of emotional attachment, but we have also looked at what else we can for the money in other areas, and while not everyone cup of tea this measures up well for us. And is got a double garage.
We have now put 455k to the agent, with an honest explanation of our position. Watch this space.
Daniel
But yes, I mean we are aware that we are pushing the envelope of what we can afford. However while very tight now, it does become somewhat more free once my property is sold, and we should then get some equity from my partners flat when that is sold, which currently we expect to be within three years so we would also get 14k of the stamp duty back.
Its hard to know what to do, the days of property value shooting up, or guaranteed income related maternity pay and pensions etc are over, so there is a need to be appropriately cautious, however we have done the sums, accounted for the risks involved with rising interest rates, etc and we think we can do this. We're spend over a grand on three surveys, and an electrical inspection, and we have an amount of emotional attachment, but we have also looked at what else we can for the money in other areas, and while not everyone cup of tea this measures up well for us. And is got a double garage.
We have now put 455k to the agent, with an honest explanation of our position. Watch this space.
Daniel
dhutch said:
We have now put 455k to the agent, with an honest explanation of our position. Watch this space.
Buggers have said know. I mean, maddness really.Dont know what the plan is with that. Sigh. If I had 10k worth of car I would sell it, but my cars worth £1800 and the drivers door handle has just fell off.
Daniel
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