Property undervalued by lender's surveyor

[Me2Me2]

The lender has just told us their surveyor valued the property we're buying at significantly less than the price we've agreed. He is very obviously wrong (I can find a good few comparable properties within 250m that sold for the same or more in last few months. Source: land registry). We've sent these to the lender, who said we can dispute the valuation. But I just can't see how the surveyor will change his/her mind. It would mean admitting they can't do their job properly.
Has anyone had their property valued at less than the agreed price and successfully disputed it? V worried
A property a few houses down sold for more the other day and is derelict.

Also, I can kind of see how surveyor arrived at his figure, it is just outdated. Properties in the area have been going up really fast. (Its london)

Did the surveyor actually physically visit the property? Or go inside, or just stand outside or, even worse, do a 'desktop' survey? We've had problems in the past (with a remortgage, not a new purchase) with desk-top surveys, where they don't even visit the property, just sit at their desk and look at zoopla (from what i can gather!) and come up with an average price based on similar sales in the area.
Might be worth finding out if they properly visited or went inside.
Also, you say that a derelict property recently sold 'the other day' - will this sale have made it onto land registry yet? If its literally only just sold, then presumably the sold house price won't yet be available on the land record, so the surveyor might not be seeing the most up to date picture.
Defo worth an appeal, good luck!

The derelict one is listed on land registry. I really feel like the surveyor hasn't looked and, as you suggest, done a zoopla survey. Annoyingly the property did sell cheaper earlier in the year - to a developer who flipped it and was able to take advantage of a particular set of circumstances. Broker says we can't see surveyor's report until mortgage is offered or dispute has run its course. We've sent in good evidence. We have a mortgage offer from another lender who did a valuation and were happy with the price, but their rate is stupidly high (the purchase was delayed so we looked for another lender). I'm just worried about how surveyor will respond to being caught doing sloppy job. We paid £350 for his valuation!

It's several years ago but the surveyor for our mortgage company valued the house we had offered on quite a bit lower than expected. The difficulty for us was that we could only borrow against the lenders valuation, not the actual price, and it was nearly a deal breaker. In the end our surveyor had a word with the lenders surveyor and it was jiggled a little, and the seller dropped the price slightly so we just about made it.

We did. Despite spending a while at the house, the surveyor managed to get the number of reception rooms wrong (and he'd been into every one of them) and this meant the value was compared with very different houses (still 4 bed, but half the footprint). The value was almost 15% out.

We (diplomatically) pointed out his mistake and provided evidence of a number of similar properties which had sold for more than we had said ours was worth.

The valuation was revised.

But our mortgage advisor said it was only the 2nd time he'd seen it happen. The first was when the valuer hadn't noticed the garden of a garden flat!

Although the estate agent that our valuer was from doesn't sell houses within 15 miles of here (which will have probably been the reason he didn't notice the more expensive houses as they appeared on right move with another village name) I have made a note that I never want to deal with them again.

Is it a certain bank beginning with an l in London ? We had the same problem and pulled out (young and naive. Knew they were wrong but just assumed they made the rules as they were big and important). A month later somebody at the bank had obviously read overthenotes and realised there was a mistake. Phoned us to say they'd changed their minds. Being London though, the property had gone.
We took them to the financial ombudsmen and got some money back.

Barbeasty our broker has said the same. He says if any one's got a chance we do because the valuation looks so odd compared to comparables. But I did just learn from estate agent that surveyor visited the property so I'm more confused than ever. Waiting for his report in light of our conparables

curious I think we used with that lender on our last property

A friend has just had this happen to her, a week ago. 11% downvaluation, even though she had a 25% deposit. Natwest's surveyors were the culprits. She doesn't have the time to appeal and couldn't negotiate with the vendors so is borrowing from her parents to fund the difference.

This is London Zone 2, which is supposedly going up and up. I think the estate agents are over-valuing to get instructions and the surveyors are cutting them down to size.

That would be fine if surveyors across the board did it. I totally agree that estate agents are talking up the london market with a lot of success. In fact if we don't get this property we are unlikely to find another in the area because the market has moved on already (I spend my life on zoopla). Unfortunately we don't have the option to make up the difference via parents or other savings. It's already the squeeze of all squeezes. London - love it and hate it

I don't think its necessarily a valuer not doing his job properly, they will have a process (a database that they will use for comparables etc) and if the properties you are referring to are not within that, then he might not be aware of them. It might be that he was aware of them, but has discounted the value of your property because its on a main road / smaller garden / further away from the tube / student-ey area etc - whatever. Its quite a subjective process – I think generally they pick 3 comparables, so if there are lots to choose from, he should have chosen the 3 that were the most similar. On that basis, its not a question of him probably refusing to change his view because its an admission that he was wrong, he's just being asked to re-consider given the data you have. He may well stick to his view though (mortgage valuations are notoriously conservative though because of all the negligence claims that have been made against valuers by lenders) – you'll have to wait and see.

If you think the valuer has not done a professional job, you need to follow the valuers company complaints procedure. Failing this report them to the RICS. Failing this get another formal market valuation which should flag up the discrepancy and table this with the lender, and say you're going to report what happens to the Mumsnet forum, Money Saving Expert and Radio 4 Moneybox live....or do all of it.

I think you're right Mandy. It turns out a few pals have had trouble with valuations remortgaging. One said her place was valued at 100k lower than the price the near identical flat had sold for recently! Our house does have a feature behind it that will make it less attractive than those on the other side of the road but not to the degree that the surveyor is suggesting with his valuation.

elan thanks. We will make a fuss if it isn't revised. We already have valuation on the property which comes out at the agreed price but lender has to have it from their approved surveyor apparently. We'll produce it if things don't work out (expecting an answer any day now).
Do you think the Mumsnet threat would work? Does everyone out there know about it? I guess after recent press maybr

Valuation is not an exact science, but there is plenty of case law to support what is an acceptable margin of error by a reasonably minded valuation surveyor in the trade. For simple valuations this is plus or minus 10% for complex vals it increases to plus minus 17.5%. For a mortgage valuation the 10% margin would probably apply, and these vals are about using the comparative method of valuation and comparing like with like transactions. mortgage valuers are often on a piece rate and have to do several vals in one day so taking time to analyse comparables in depth loses time and money so they cut corners and use info from the web rather than grass roots evidence from agents or actually looking at comparables properly in person. The problem with getting valuation comparable a off web sites like mouse price or zoopla is that this is just info off the land registry, so you don't know if they are 'arms length transactions' nor any other shortcomings such as structural issues or boundary or title impediments. Hence the valuer might think they are comparing like with like but this may not be true. Hope this helps.

when we bought last year our house was valued 2k less than our offer.
the broker told us that that is quite common (but only have his word for it).
luckily not a problem for us, but can imagine that it coud be a dealbreaker for others.

Don't forget though, the valuer is completely objective when it comes to potential issues - so you might think the 'feature' will not impact too much on the value (because you love everything else about the house) whereas he is looking at it from the lenders point of view - if you defaulted on the mortgage and the lender repossessed it, what would they get. What would the general public think.

Yes, in terms of remortgage valuations, it depends whether you are moving lender. When we remortgaged recently, they relied on the Nationwide House Price Index for the current value (which is based on an average increase in the whole region since we bought in 2010). The value was £50, 000 less than our next door but one neighbour sold for (got asking price offer within a week) - identical house - about 3 months before. They are just very cautious now.

This is about TCF Treating Customers Fairly and RICS best practise. If a mortgage product is based on Market Value, then the valuer will be objective for the lender, but must base all assumptions as per the RICS red book (strict rules for valuing property) or they are not acting professionally. To under value consistently for a mortgage provider is risking being thrown out of the profession if they are found out. For a mortgage provider to be found out asking valuers to always to come in under the mark is definitely not treating customers fairly under financial licensing requirements.

Only my opinion but dont think lenders ask valuers to come in below market value, like I say its being conservative. Valuation is not an exact science, its based on an individual's professional opinion. II think there has historically been a range of value, for example a property is worth around £300k which means depending on various factors (condition, market, etc ) a valuer might value it from say £290-£310k. In the boom yrs they might have gone with the higher value, now they're probably erring on the side of caution and saying £290k.

Hmmm I'm beginning to think we're a bit stuffed. It's nationwide's surveyor that has given us the low valuation. Natwest was fine with the agreed price. There's a 52k discrepancy between them.

That's a good point Mandy about the awkward feature being a big deal to some and not others. A property over the road which is identical in sq ft and exterior sold in sept for 8k more and was in a terrible state - unlivable. I'm guessing it would have gone for 50k more at least if in a better state - other properties up the road have sold for 70-80k more.

The whole purchase has dragged on for so long I'm feeling so deflated about the whole thing. The irony is it's not even our dream house! (chances of such a thing in central-ish london are more than slim)

You never know, give the lender your info and see what the valuer says. Having said that, it would concern me to be honest, that level of difference, so regardless of what the lender / valuer say, just make sure you're being realistic and happy with the outcome. Good luck!

We bought a flat a few years ago that the surveyor valued at less than our offer. We revised the offer a bit, had it accepted, then scraped together the difference to still afford a decent LTV on the mortgage.

When we sold, it turned out that the surveyor had been right - we lost the exact amount we had overpayed by.

We've just remortgaged as we were at the end of our fixed term. Our own bank (who the mortgage was with) told us the house value had dropped by £11k in 3 years (despite us doing loads of work to it and them never visiting the house) based on some calculation that was index-linked (or something...). We were allowed to disagree but it would cost us £250 to get it surveyed. We would only be allowed to use a surveyor they appointed (and let's be honest, if it's their surveyor, he'll agree with the valuation they want).

We've moved our mortgage to another bank with lower interest rates and a free property valuation which showed our house hadn't dropped £11k.