Contesting a mortgage valuation(25 Posts)
Unfortunately the mortgage valuation on our house came back much lower than than the offer we'd accepted. The buyers still want the house, and the EA is comvinced the valuation is wrong, so they're contesting it.
Does anyone have any experience of this, and how long it might take?
We'd love to be able to offer on our next house but obviously can't yet. Baby is due next month!
Hi OP sorry this probably isn't what you want to hear but we had this and the lender was just immovable. Our broker advised that they very very rarely if ever change their valuation and our only option was to go to a new lender. We went through all of their internal processes which took about 8 weeks and it was still computer says no. In the end we went with a different lender and negotiated a price reduction with the sellers.
Mortgage valuation on mine came in lower and they contested but wouldn’t budge. I lowered the price to proceed.
Really annoying that I was the first house on the road to sell for ages, and then a few months after mine the house opposite (not as nice) sold for like £30k more so I think of that had sold first I’d have been ok with my valuation. It was something like offer price £227 and mortgage Val £200.
You don’t have to lower price. Buyer can either find extra to bridge the gap or try another lender to see if more favourable valuation.
This obviously depends on your willingness to risk the sale as there’s a chance the buyer simply doesn’t have the extra or may not want to change lender.
I’m not sure how successful contesting the valuation would be as have no experience of this. Money saving expert site has lots of knowledgeable people on the house buying forum and might be worth asking there too.
I work for a lending company and we very very rarely contest a valuer's opinion (it's probably happened once or twice in the 18 months I have worked here, and the valuer came back with the same value and comments).
The rules for contesting a valuation are super strict with my lender, have to have very similar property within 1/2 a mile sold in the last 6 months. I've never seen one successfully changed aside from when the valuer missed a whole field off the valuation report
This happened to us last year - banks surveyor valued our house at 10K lower than we had accepted. Buyers couldn't afford to bridge gap as they were first time buyers borrowing 90%. We were moving up ladder and were able to get a significant chunk off the property we were buying so accepted 10K less as it all came out in the wash
The difficulty you have is that as pp have said lenders are strict about this. Your buyers have the choice of finding the difference or pulling out if you don't agree to lower the price. From your perspective another lender may instruct the same value or another valued who may value it at the same level. Only you know who has the bargaining power here (whether you had a queue of other buyers who will step in, or if you're desperate to move / been on the market for a while). That's what it comes down to.
This happened to us several years ago - we were the buyers and the house we wanted (that we now live in) was valued at £20K under our offer. It was utterly ridiculous, the house was priced similarly to all the others round here although there are none that are identical. We knew there was no point offering the vendors less, as we and two other couples had all offered the asking price on the same day as each other, so if we were to offer less then the vendors would most likely have put it straight back on the market.
We did contest the decision. Our estate agent had to produce 4 other recently sold houses of similar spec and similar price. The valuers did the same. One of the houses chosen by our estate agent as an example was also chosen by the valuers as their example!! The valuers refused to budge even though by our opinion they were talking utter nonsense. In the end we managed to bridge the gap but it was all very frustrating as that extra cash had been earmarked for something else. Less that a year later the house was valued by Zoopla etc as £30K more than the valuers stated, and we don't live in a high-value-house area.
Thanks for the replies. The gap is massive. There is nothing on at the lower value that's comparable. Only 2 bed flats. Ours is a 3 bed house. And houses on our street have sold for more recently.
Do you have a really good objective friend / relative that you could talk to about it? I'm not saying you're wrong, but we sometimes (well I do!) think our own houses don't have compromises / negatives that a third party can see. Have you asked for a copy / seen the comparables they've used?
We've seen the comparables. Houses on our street have sold for more than the offer price in the past 6 months. The only houses you can get in our town at the mortgage valuation are 1 or 2 bed. There's really nothing wrong with our house.
Sorry to be clear, you've seen the comparables that the valuer used?
Do you know if the houses that have sold on your road are recorded at the Land Registry (it usually takes a couple of months)? Are those houses the same footprint / spec as yours?
No I haven't seen the ones the valuer used, just the ones the EA used. The EA has sent those to the valuer.
I just got interrupted by the EA. He said the valuer is willing to change the valuation, but not as far as the asking price, more of a meeting in the middle. This won't be enough for us to move, so it looks like we might lose the sale.
I wouldn't bank on Zooper valuations, anyhow. Ours originally went up for sale for the Zooper valuation, it came down by 20k in the next 4 months and we bought it for almost 10k less than that because it needed significant remedial work doing (ie whole new roof on a dormer bungalow, which is no straightforward job, then all the damp caused by the knackered roof needing fixing).
And the similar property thing breaks down for ours, anyhow, as only a few were built and they have all changed significantly over the years with some having 2 bedrooms, some 3. Next door but one sold roughly the same time as us for 25k less but has a tiny little conservatory tacked on the back where we have a 150 sq ft room with a vaulted ceiling added onto the kitchen to make a large kitchen diner and one of the dormer bedrooms has been given a lot more headroom so no longer cuts into the eaves. That you also has a much smaller than our small back garden and, while their drive is wider than ours, it opens right onto a busy junction. There are other 3 bed semis of a similar age in the area but they're more typical house shaped, much smaller square footage, off the main road and at least 50k more than ours!
Do you think the buyers might bridge the gap if it's smaller? If they really want the property, you might still be able to agree a reduction in price which is still above the valuation but at a level where the buyers can fund the difference?
I'm digressing from your dilemma, anyhow, op.
It sounds like the valuer has made a mistake, tbh. Is your house recorded correctly in the land registry? The house next door to ours appears as a 4 bed detached in the sold house prices lists which are taken from the land registry. It's the same sort as ours!
A word of caution, changing Lender wouldn't necessarily mean a better valuation. Most lenders use a 'panel' of external valuers. Whilst a new lender would require a new valuation, it's possible it could be the same valuer/firm that they instruct to survey your property.
packachew valuers are more thorough than simply looking at sold prices - so mistakes re number of bedrooms don't really matter - they'd access the records / floor plan/ previous sales particulars rather than just a simple description.
My question re the Land Reistry before is based on the fact there is often a time delay in sales being recorded at the Land Registry and therefore appearing on the valuers comparable database.
Yes, that's what the EA said PlugUgly. The new valuation is still over £20k off the offer. I doubt the first time buyers can find that! And we can't afford to drop at all really as we were moving for more space and there are no bigger houses we'd be able to afford with a smaller deposit.
So we're stuck? For how long? Until more houses sell near us? And any advice on how to check the land registry?
Thanks for all replies.
You can order Office copy entries from the Land Registry for £3. Or, if you know which houses sold you can usually find the estate agent who sold them from doing a bit of googling, you can ring them, explain your position and ask what price they actually went for.
Aye, name changed, but what is immediately accessible online is what buyers and sellers believe the house is worth so if number 7 is listed as a completely different house and number 4 is the right house but apparently in a street in a relatively cheap area, 6 miles away, us buy3s and sellers are getting some pretty misleading information to back up our expectations.
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