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Disappointing house valuation(32 Posts)
My dh and I finally managed to buy our first home two years ago. We live in an area with very high house prices. We got basically a bit of a wreck and have spent the last two years doing it up. It had dangerous bathroom electrics, no bathroom floor under the bath, a rotting, damp-ridden kitchen, mouldy carpets, etc.
We've redecorated all downstairs and two of the three upstairs rooms. We've laid a hard wood floor in the sitting room, created a utility area, installed a new kitchen, damp-proofed the kitchen and put in a new ceiling, put in a new bathroom, had new circuit breakers put in, new fuse board, new garden fences, new shed, redone garden.
We're remortgaging and the surveyor (who apparently valued it when we moved in two years ago) says it is only worth three grand more than we originally paid for it. We are gutted. Does this sound right to people? Any advice on what we should do? We're not sure if we should pay for another valuation or not.
Incidentally, the house next door (which is in a terrible condition - 1970s kitchen and decor, overgrown garden, etc) just sold for 3,400 less than ours has been valued at.
It is possible. In some areas prices have stagnated or fallen. Would you be happy to give out the first 3 digits of your postcode so we can look at trends in your area?
I agree - depends a lot where it is. Although the house next door selling for £3,400 less sounds odd, it might be that there are other factors which make it worth more than yours.
Some parts of the country have rocketed (London and commuter towns) whereas some areas have plummeted (the north - I was surprised to find out how little my parents' house was worth now compared with a probate valuation a couple of years ago).
I'm in CV37 - generally quite a well-to-do area where my impression is that prices have not rocketed, but not stagnated. I'd be v interested to know about any trends, though!
Also, the house next door which has just been sold is a mid terrace, while we are end of terrace.
Does it make a big difference to your loan to value ratio then? Ours was similar when we remortgaged which meant we nearly missed out on a better rate because we didn't have as much equity in the house. We were able to pull a bit from savings to cover the shortfall, though it was a pain.
I think ours was a genuine fall in value over the 5 or so years since we bought it. We had done a fair bit of work too and the surveyor said we bought at a good price so was all the more galling.
It does affect the mortgage we can get, which is very annoying. To be honest, though, it's also just so upsetting to feel that all the work we have done has had no real effect. It feels like we have let a stranger into our lovingly refurbished home and they have denounced it as a shit-heap. I know that is an overly-emotional response (dh says I need to be more detached) but it's made my blood boil.
I grew up in a CV area so I do know it a little bit. I have been viewing houses on rightmove which have sold and there seems to be very little movement in prices in the area. I don't want to post links but have a look at all properties sold in last five years. If I were you I would get some local estate agents in to value (three or four minimum) and see what they come up with.
Thanks! Will agents come out to value if we ask, or do we need to pretend we're considering selling?
It is infuriating. But perhaps because it is a valuation for a remortgage they are erring very much on the side of caution so it is being undervalued so in an extreme case they will get their money back. It might not be a true indication on the house's value at the present time. I agree with get local estate agents in if you are not happy.
We had this when we remortgaged - basically the valuation on behalf of the Building Society was way lower than the actual value. I would get some valuations for your peace of mind but the Building Soc won't be swayed by an estate agent's value and you would probably have to pay for another surveyor if you wanted to challenge.
Is it worth trying a different mortgage provider? You can get a better deal sometimes if you go to someone new rather than remortgaging with the same people.
OP I suspect we will be in the same position as you next year when we come to remortgage. It is galling
Valuations for a remortgage are always low - doesnt reflect what someone will necessarily pay for it but what the mortgage company could get for it if they had to make a quick sale if you defaulted on the mortgage. They will also value it based on what other properties sole for around you - irrespective of the internal condition. You could always get a few estate agents to value it for your own piece of mind.
Oh and there is no point in challenging it - mortgage companies hold all the cards and are looking for reasons to loan a small amount or say no
Thanks all. Have calmed down a little bit now; I think we have decided not to challenge or go for another survey, but just suck it up. Realistically, this looks like our only option!
Think we will definitely get some estate agents to value it too, though, just for our own curiosity. Hopefully that will at least make us feel a bit better.
Valuations are more cautious at the moment, and they depend a lot on previous selling price. The house next door's sale has probably affected your valuation.
I don't know what you're upset about. Unless you're planning to sell the house immediately, what have you lost?
I'm surprised that you're willing to waste the estate agent's time on a pointless valuation to "make [you] feel a bit better".
I think people are right, a mortgage valuation is always lower than an agents valuation. Your house is probably worth way more.
Gosh, FinancePrincess, did you get out of bed the wrong side this morning?
My worry is that according to this valuation we have lost quite a bit, as we have obviously spent a lot more than three thousand on renovating our house. And how much they think it is worth obviously affects the type of mortgage we can get in terms of loan to value.
We'll be looking for an estate agent's valuation to also show us whether it is worth spending a lot more on the house - and depending on their response this may well help us to decide about whether we will sell long or short term - so it doesn't totally waste their time.
Many thanks to all those who've responded with helpful advice and understanding.
the cosmetic stuff like new kitchen, garden shed won't positively affect a valuation though. What they will do is make it easier to find a buyer. A lot of people want to put their own stamp on re decorating so it won't up the price that much.
I'd not pay much attention to valuations...a house is only worth what other people are prepared to pay for it...
Quite right, mum2Fergus.
OP, I didn't get out of the wrong side of the bed today. Try to understand the difference between realised and unrealised losses. You only make a loss (or gain) on something when you sell it.
We've already established that the mortgage company will take no notice of an estate agent's valuation, so dragging an estate agent around to value a house you don't intend to put up for sale with him or her will have no influence whatsoever on the remortgage deal you are offered.
The truth is, as you have already admitted, that the purpose of the enterprise would be having somebody pat your hand reassuringly and say, effectively, "there, there, your house is worth much more than everybody else says it is and your divine right to see the value of your house increase into perpetuity is unaffected."
Still, I'm sure that estate agents are at least used to this sort of thing!
We got a mortgage for what we wanted even though the valuation was lower than what we paid. I don't understand how that works but we did. I remember being frightened at the time when we saw the valuation but everybody just shrugged about it, the surveyor, the bank, everyone we spoke to. Maybe it's different now.
FinancePrincess. I have no intention of "dragging" an estate agent round our house. We have spoken to one, explained the situation, and they are happy to come and do a valuation - so you really don't need to worry that I am somehow exploiting them.
I quite understand the difference between realised ad unrealised losses - it's hardly rocket science, is it?! But the fact remains that this valuation does affect my mortgage and therefore I was looking for advice on how to deal with this.
In no way do I feel that my house price should increase in perpetuity for no reason - and I don't think I have said that. The fact remains that if you buy something and significantly invest in it, you do expect to increase the value.
If you want to be inflammatory, please go to Am I Being Unreasonable and vent your spleen there. I posted here because I was just looking for advice. I wasn't asking whether you agreed with my viewpoint.
Wow - Financeprincess - agree that you seem to be not in the finest of moods. OP was looking for advice, not judgement (this isn't the Am I Being Unreadonable board). No need to be patronising.
We had agreed with our buyer a price and their mortgage company would only give a mortgage for 5000 less as a house in the same street had gone for a song as was a sale after a death. Banks take no notice of internal states only looking at bricks and mortar.
But if you wanted to sell in the near future you
Might be caught in same thing as us - buyers can't get mortgage for full amount so you will be expected to drop price.
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