BecksMyCat Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less. He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? Quote Link to comment Share on other sites More sharing options...
D179 Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? This was true, not so sure now though, I suspect under vals have become more frequent. Saying that, I di one meet a chap that claimed that he had managed to get this to happen to two different properties that he was selling, Quote Link to comment Share on other sites More sharing options...
Blue Peter Posted January 23, 2009 Share Posted January 23, 2009 (edited) I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? Take a look at Shao Khan's thread from a week ago: Shao Khan Peter. Edit: Typo Edited January 23, 2009 by Blue Peter Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 23, 2009 Share Posted January 23, 2009 just had a mortgage surveyor round this morning, the landlords mortgage is up for revaluation. three houses identical up for sale within 100 yards, 2@£279K and one at £269K The 269K sold a month ago but fell through very quickly on finance issue. I asked the valuer what he reckoned. £220-230K. Lower for distressed sale. So in answer to your question yes, there is a gulf between what people think and what the reality is as far as lenders are concerned. Quote Link to comment Share on other sites More sharing options...
VeryMeanReversion Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? A relative is a surveyor (in his 60's). He told me that pre-boom, downvaluing was the norm to protect themselves against legal action later. My first house was downvalued. VMR. Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted January 23, 2009 Share Posted January 23, 2009 MARGIN CALLS!!!!! I'm sorry I don't know what came over me. Quote Link to comment Share on other sites More sharing options...
The Conveyancer Posted January 23, 2009 Share Posted January 23, 2009 (edited) I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? Last year I would have said it was unusual, this year more and more likely. I have had quite a few clients having to renegotiate because the property has been downvalued. Edited January 23, 2009 by The Conveyancer Quote Link to comment Share on other sites More sharing options...
Bloo Loo Posted January 23, 2009 Share Posted January 23, 2009 In my view, a valuer gives a valuation for sale...on the day he values it. It can only be an opinion. Downvaluing or upvaluing would lead to lawsuits. Quote Link to comment Share on other sites More sharing options...
BecksMyCat Posted January 23, 2009 Author Share Posted January 23, 2009 Thank you everyone. I spoke with my Dad, he reitred from banking over 10 years ago. He said that the valuers back then just phoned up a few estate agents and asked their opinion. That seems pretty rubbish to me. I hope things have changed! Quote Link to comment Share on other sites More sharing options...
AdV Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? This happened to us last March, we offered 395k and the mortgage valuation came back for 350k. We queried it but they were adamant it was correct. It has a consequence for the amount that they let you borrow, if they will only let you lend say 75% loan-to-value you will have to come up with the difference yourself. In our case, we tried to negotiate with the the seller, they didn't want to so we pulled out (even though we did have a large enough deposit to still go through with the sale), needless to say we are quite relieved by that now. They did sell it for 400k though! Quote Link to comment Share on other sites More sharing options...
AteMoose Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? No thats not true, a mortage advisor told me in 05 more and more sales were falling through because the valuation was below the offered price. If this happens you need to go back to the sellers and negotiate a lower price. Quote Link to comment Share on other sites More sharing options...
BecksMyCat Posted January 23, 2009 Author Share Posted January 23, 2009 This happened to us last March, we offered 395k and the mortgage valuation came back for 350k. We queried it but they were adamant it was correct. It has a consequence for the amount that they let you borrow, if they will only let you lend say 75% loan-to-value you will have to come up with the difference yourself. In our case, we tried to negotiate with the the seller, they didn't want to so we pulled out (even though we did have a large enough deposit to still go through with the sale), needless to say we are quite relieved by that now. They did sell it for 400k though! ] That sounds quite eratic. In that another surveyor presumably must have agreed that the later sale at 400K. That is 50K between two valuations. Quote Link to comment Share on other sites More sharing options...
helenreed Posted January 23, 2009 Share Posted January 23, 2009 Valuers haven't got any more idea of the value than my dog would have. Nobody knows what anything is worth be it houses, companies, cars etc. My friends house was valued two weeks ago at the same price quoted exactly a year ago by the same valuer. Quote Link to comment Share on other sites More sharing options...
Neil B Posted January 23, 2009 Share Posted January 23, 2009 (edited) I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? I think he's feeding you bull here to be honnest. The lender arranges a valuation to take place before they enter the mortgage contract - If the valuation comes back at less than the mortgage amount (i.e. the amount of money that you are asking for) then the mortgage is refused, and they advise what they believe is the mortgagable value of the property. They wont budge on this and if you dont like it then you will have to apply for a different mortgage and go through the valuation process all over again (you pay for this valuation BTW). But remember - there is a deposit involved here so the mortgage amount and the amount that you are purchasing the property for are never the same (unless you took out a risky 100% mortgage that is). Banks quite often refuse mortgages this is why you should always get a mortgage in principle before making an offer. Edited January 23, 2009 by Neil B Quote Link to comment Share on other sites More sharing options...
Guest happy? Posted January 23, 2009 Share Posted January 23, 2009 I was speaking with a mortgage advisor at RBS and asked what would happen if we made an offer on a property and their valuer thought it was worth less.He said this hardly ever happens? Is this true? The advisor is a youngish guy, so I could see them agreeing valuations in a boom, but would this be different in a rapid downturn? He may have misheard - perhaps he thought you meant "worthless" not "worth less". It's my view that there will many properties which will not be able to attract any sort of mortgage - I've seen this twice before in the 1980's and the 1990's. Quote Link to comment Share on other sites More sharing options...
Spook321 Posted January 23, 2009 Share Posted January 23, 2009 Put in a 20% off asking price offer on a place before Christmas, valuation came back at exactly what I'd offered to the £. Made me gazunder another 10% off straight away. Quote Link to comment Share on other sites More sharing options...
BecksMyCat Posted January 23, 2009 Author Share Posted January 23, 2009 Put in a 20% off asking price offer on a place before Christmas, valuation came back at exactly what I'd offered to the £. Made me gazunder another 10% off straight away. Maybe they would have agreed whatever you offered. I am guessing in this climate they are unlikely to risk saying you are paying below what a house is worth, unless you are buying it for a fiver Quote Link to comment Share on other sites More sharing options...
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