Mortgage company down valued by £130k - wtf?

[Beach1983]

Seriously I’m stressing out so much, we had an offer accepted slightly over asking. That was a middle price between lowest estate agents price valuation and highest.

mortgage company have valued at 65k under the lowest valuation and £130k over our offer. IFA is currently trying to establish it this an error/typo as he’s never seen such a large down valuation in his career.

ive had an independent RICS survey done on the house which I should receive next week - I’m hoping if this comes back at a number more like we offered I can use this to appeal the decision?

anyone had similar? I honestly am so upset!

Should have said mortgage company did a desktop valuation so not been to property.

This is commune. Over valued and them people stretched the budget

If you like the house either renegotiate the cost or renegotiate the mortgage

Have they valued the right property? A mortgage company once valued (by driving past) a completely different house to the one we were buying (there was another property on the same stretch of road with the same house number, but it was on xxxxxx Green, rather than xxxxxxx Road). It took quite some persuading them that they'd got it wrong. It was only when I asked them if the house they'd looked at had a garage (ours had an unmistakable double garage attached) that they said no, and they then decided that perhaps they had looked at the wrong one.

OP, we are in the same boat. Te property we offered on was downvalued by 140k by desk-top valuation, they did not even take into account the separate plot of land with separate title, which is also included in the sale (total area of land just a bit short of an acre). If the decision was made it's practically impossible to overturn it, that's what another EA agent with huge experience advised us about and told to go to another lender to get another valuation.

Ours was £115k under last month.

we had a low loan to value so they still issued mortgage. We knew we were overpaying price wise but happy to do for various personal reasons and we also think house was under valued.

how much is the house worth? And can you still het a mortgage?

ReviewingTheSituation unfortunately, with desk top valuation they did not even stand out from their work place

When I put my offer in on my house I went in at £180k - house was on the market at £190k (used to work in an estate agents but in lettings) so I knew enough to do comparables etc. My offer was rejected they wanted more but my mortgage company valuation surprise surprise came in on exactly what I offered.

I ended up having to find extra £5k to secure it. They valuations are not that often wrong and when I looked back at the history on zoopla they priced it at £190k as it would allow them to walk away with £20k profit.

@ReviewingTheSituation I’m seriously wondering if they have got the right house but it has a house name rather than number so I doubt it!

@SafelySoftly sadly we couldn’t afford to pay the difference at £135k under and honestly if it genuinely is worth that much less then I’m not sure I would want to overpay that much even if I love it!

If you can’t afford the difference then neither can (many) other people. It’s going to keep cropping up and the sellers would have to hope for a cash buyer or in one with a large deposit to suck up the difference.

I would go back to the estate agents or try another lender -

@Dreamstate The mortgage valuation will never be for more than you’ve offered. It’ll either be exactly your offer or less.

I expect the vendors priced it at £190k as they, or their agent, believed that is what someone would pay.

mortgage company have valued at 65k under the lowest valuation and £130k over our offer. IFA is currently trying to establish it this

Should this be 130k under our offer? Otherwise I don't understand the issue?

@OneFrenchEgg yes 130k under asking, sorry!

Ah that makes sense. I'm sorry io it's horrible to hit a bump - sounds from pp it's happening fairly often. You dont have the survey back - maybe that will throw something obvious up?

@OneFrenchEgg lender did a desktop valuation so my financial advisor has asked for a copy of it. I’ve paid separately for a level 2 survey due to age of property, he obviously physically went to property and I’ve now paid extra for the market valuation to be added - I should get this back Tuesday but he’s already called to saying nothing major wrong with the property.

lowest estate agents valuation was £500k and highest was £575 and our offer was in the middle. Mortgage valuation come in at £435k - a huge difference!

Oh I'm so sorry , that's really stressful when you're looking forward to moving and getting things going. I hope you get an answer / find a different lender.

Ask the vendor to adjust the price.
Your down valuation won't be the only one.
House prices can go down as well as up.

I've just had my mortgage offer and the illustration says "Value of the property assumed to prepare this information sheet: £Xxx". Is this their valuation? £xxx is £30k under what I've offered! They've still offered the mortgage because I have a hefty deposit but I am worried about overpaying. Need to speak to my mortgage broker to find out what's what but I also need to book a survey so will add a valuation to that. If it's also £30k under, I will look to renegotiate.

@dubyalass i don’t know! All this was communicated to me via my financial advisor.

we’ve had it confirmed that the mortgage company actually sent someone to do an in person valuation rather than desktop and he stands by his decision. “Overpriced and nothing similar sold locally to compare to”.

will wait and see what the guy who did my survey says, if it’s a similar price we will have to try and negotiate but no way I can make up the 130k. Trying to prepare myself to lose this house but it’s making me so sad!

@Beach1983 what a nightmare! It really feels like we're at the mercy of people with different vested interests. The trouble is, we have no idea how many others also offered on the house, how much they offered, what their position is etc.

If I try to renegotiate the agents will probably say "we'll just offer it to the next bidder" but mine didn't go to best and final offers, and there were no offers when I viewed a week after it had been listed, which in my local market makes me think the agents overcooked it. But prices are still rising here, with very little on the market. A smaller place than mine (but with a bigger garden, and semi rather terrace) round the corner has just gone on at £55k more than I'm paying, which seems insane.

That is one hell of a downvaluation. £130k on £435k is 30%! I thought this was going to be about a property over £1.3m, as a 10% discrepancy would perhaps make some
sense.

I'd walk away from that OP, otherwise you'd probably go straight into negative equity.

Its disappointing but surely its an indication of lenders getting nervous about negative equity, rising interest rates cost of living and so on.

We’ve had this (well £100k on a £895k house). Luckily we can still get to 25% but our IFA commented that they’ll be relying heavily on the roads locally and will also take no account of the interior etc. Given we’d offered £150k less for another property about two minutes away that went for £100k less because it hadn’t been decorated in 40 years it all seems pretty random!

"Its disappointing but surely its an indication of lenders getting nervous about negative equity, rising interest rates cost of living and so on."

I think so. It's been going on since the start of the pandemic really.

I don't like desktop valuations unless it's a standard house in a known good area but these became the norm in 2020.

It does seem a lot but Im interested in how you know what the estate agents valuations were but also why you think they're relevant anyway?

OP I’ve recently exchanged on a place that was down valued - we met in the middle . I’m the seller . In 2009 I lost about 80k by turning down an offer just before a crash