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Time to raise the rents.

My Purchase - Survey Done, Late But Done

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It took a while to get my survey done, I won't go into why because it's a long story.

But I wanted to let you all know the result which I got yesterday afternoon. The property came through without a bad comment. The valuer valued it at the agreed price and the estimated the rent at 6.1% of the pruchase price. Now I know I can get 6.9% so I believe his estimate was low.

The point is that all was well enough to qualify for the loan which is at 5.09% on an 85% LTV.

But I also wanted to let you know his unusual comments at the end of his survey. Now please understand that to protect my privacy from those who would seek to find out which property it is in my area (SW11 as I've said many times), I have changed the amounts.

His comments on the purchase price (lets say 490k which as I said isn't the real purchase price) in writing at the end of the valuation:

"Properties in this location of this condition usually range in between 490k and 540k"

Now him putting this down is very unusual in my experience, I have never seen comments like them. But it occurs to me that if that isn't confirmation of BMV, I don't know what is.

So there you have it IMO, a genuine BMV purchase.

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Guest Time 2 raise Interest Rates

Hi Rents, I guess there's one born every day. Decided how you're

going to pay me my £100 yet?? :D

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It took a while to get my survey done, I won't go into why because it's a long story.

But I wanted to let you all know the result which I got yesterday afternoon. The property came through without a bad comment. The valuer valued it at the agreed price and the estimated the rent at 6.1% of the pruchase price. Now I know I can get 6.9% so I believe his estimate was low.

The point is that all was well enough to qualify for the loan which is at 5.09% on an 85% LTV.

But I also wanted to let you know his unusual comments at the end of his survey. Now please understand that to protect my privacy from those who would seek to find out which property it is in my area (SW11 as I've said many times), I have changed the amounts.

His comments on the purchase price (lets say 490k which as I said isn't the real purchase price) in writing at the end of the valuation:

"Properties in this location of this condition usually range in between 490k and 540k"

Now him putting this down is very unusual in my experience, I have never seen comments like them. But it occurs to me that if that isn't confirmation of BMV, I don't know what is.

So there you have it IMO, a genuine BMV purchase.

What's BMV? Is it Below Market Valuation?

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What's BMV? Is it Below Market Valuation?

Yes, below market value. It's a concept the bears say doesn't exist, because I must be paying the market price they say, because I am the market.

But I think this surveyor has shown them to be incorrect.

Hi Rents, I guess there's one born every day. Decided how you're

going to pay me my £100 yet?? :D

Not sure what you mean.

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TTRTR - you mean you aren't the market when you buy a house?

Well if I'm buying for 490k (made up as stated) and the surveyor says the market pays 490k to 540k for this type of place, then I guess the answer is that I am just a part of the market.

I've posted all year long on how I wanted to benefit from the slow market by finding a very good value place. It looks like I may have succeeded.

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"Properties in this location of this condition usually range in between 490k and 540k"

So there you have it IMO, a genuine BMV purchase.

Except that RICS principals of valuation rely upon comparative evidence using similar properties in the same area. They make no allowance for likely future movements.

The interesting point is that this suggests that the price has dropped by £50,000 since the date of the comparative transactions, it is not that you have bought BMV, just that MV has gone down to this new level. This time next year your surveyor will be using your property as comparative evidence for similar purchases, at which point his valuation will be along the lines of "Properties in this location of this condition usually range in between 450k and 490k".

Edited by Young Goat

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Except that RICS principals of valuation rely upon comparative evidence using similar properties in the same area. They make no allowance for likely future movements.

The interesting point is that this suggests that the price has dropped by £50,000 since the date of the comparative transactions, it is not that you have bought BMV, just that MV has gone down to this new level. This time next year your surveyor will be using your property as comparative evidence for similar purchases, at which point his valuation will be along the lines of "Properties in this location of this condition usually range in between 450k and 490k".

I half agree

The point about the price paid is the value - I agree - so the value is 490

However, I very strongly believe that the price will recover quickly - so I would say that TTRTR has bought at MB (Market bottom)

Anyone trying to buy a similar property (when sentiment is better) will pay nearer to the 540

So TTRTR has done well as I reckon his timing is perfect (we are talking SW11 are we not)

IMHO

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Except that RICS principals of valuation rely upon comparative evidence using similar properties in the same area. They make no allowance for likely future movements.

The interesting point is that this suggests that the price has dropped by £50,000 since the date of the comparative transactions, it is not that you have bought BMV, just that MV has gone down to this new level. This time next year your surveyor will be using your property as comparative evidence for similar purchases, at which point his valuation will be along the lines of "Properties in this location of this condition usually range in between 450k and 490k".

I'd believe you, except for several things.

1/ is that I got 7.1% off the asking price.

2/ is that I had a survey done this year on another property. There was no similar mention of the price range for the area.

3/ is that surveyors do comparisons yes, but they don't normally let the client know the comparisons unless asked to prove their disagreement with the agreed sale price

Edited by Time to raise the rents.

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I half agree

The point about the price paid is the value - I agree - so the value is 490

However, I very strongly believe that the price will recover quickly - so I would say that TTRTR has bought at MB (Market bottom)

Anyone trying to buy a similar property (when sentiment is better) will pay nearer to the 540

So TTRTR has done well as I reckon his timing is perfect (we are talking SW11 are we not)

IMHO

Hi London Landlady,

I'm not sure if you have had this question already (if you have I apologise), but, what do you think will cause property to rise again? I know about the arguements regarding SIPPs (I don't know if that is your reasoning) but I am unsure SIPPs will be that popular with anyone other than cash buyers, I have a friend who has a reasonably senior job in a bank (no not senior counter dolly, head of a region) who tells me that there would be few sensible banks willing to lend for such investments as they can loss the right to repossess the property as it is technically out of there hands when part of a SIPP. If they did lend for SIPP properties, they would probably require the loan to be sucured against another home. For instance, if someone bought a BTL and put it in a SIPP, the loan would need to be secured against the BTLers home or another BTL property (if they have one).

As I see things (with my rather dodgy glasses), IR's are unlikely to drop, especially with EU IR warnings and the US IR's continuing to rise. While IR's are so low, even small rises make huge differences to the mortgage payer. I don't think there will be a crash without 'something' happening, but it wouldn't take a big 'something' and there are many things on the verge of happening (IR's up, utility bill rises, council tax rises, job loses). I live in the South East and have many friends who work in the city who know there bonuses are going to be small this year, they tell me this is usually an indication of job losses, and some are being transfered abroad (this seems to be a trend now, esp. at Reuters). There have also been job losses at my firm I'd prefer not to say where I work, but lets just say it is for a service based company.

I would be interested to know your thoughts.

By the way, what did you do to get the title Troll? If it helps, I have never thought of you as anything other than someone with a slightly different view to me, I don't think that makes you a Troll. IMHO we need people like you and TTRTR to keep the debate alive, so I'm glad you aren't put off by this label.

LG

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I think the fact that he put it on the valuation of his own accord is evidence enough that it's BMV.

He might as well have said on the valuation "Hey, well done, these normally go closer to 540k".

I dont get it, if he put "Properties in this location of this condition usually range in between 490k and 540k"

and you paid 490K then you paid the lower end of the price range that the properties usually sell at??

I would imagine that a price range needs to be there because no two houses are exactly the same , each finished differntly ect.

Im not taking the p*ss im trying to understand how you consider it to be BMV.

EDITED:

To me BMV would be say 420K with him putting ""Properties in this location of this condition usually range in between 490k and 540k"

You could argue then about BMV after a period of time when all other property of the same type/condition carry on selling at 490K-540K . So over a period of time .. for instance 2 years, if the sales were consistantly between 490K-540K and you managed to buy at 420K somewhere in between then a BMV concept would be more understandable.

Edited by theChuz

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I suspect he is both covering his rear, and trying to sell the

valuation to the lender by indicating that it is BMV

and by implication less likely to attract NE.

What is most telling is the use of the word 'usually',

like it is usual (historically) for houses to sell at 7x multiples.

- which it isn't :D

A more accurate term would have been 'recently', but that

would weaken his and your arguments about BMV.

Incidentally, would the property be a viable renting

proposition at the higher end of the range?

ABB

Edited by AgeingBabyBoomer

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I dont get it, if he put "Properties in this location of this condition usually range in between 490k and 540k"

and you paid 490K then you paid the lower end of the price range that the properties usually sell at??

I would imagine that a price range needs to be there because no two houses are exactly the same , each finished differntly ect.

Im not taking the p*ss im trying to understand how you consider it to be BMV.

EDITED:

To me BMV would be say 420K with him putting ""Properties in this location of this condition usually range in between 490k and 540k"

You could argue then about BMV after a period of time when all other property of the same type/condition carry on selling at 490K-540K . So over a period of time .. for instance 2 years, if the sales were consistantly between 490K-540K and you managed to buy at 420K somewhere in between then a BMV concept would be more understandable.

If that were the case, he would have put down "usually between 420k & 540k" How could he do otherwise, he knows what I'm paying.

I suspect he is both covering his rear, and trying to sell the

valuation to the lender by indicating that it is BMV

and by implication less likely to attract NE.

What is most telling is the use of the word 'usually',

like it is usual (historically) for houses to sell at 7x multiples.

- which it isn't :D

A more accurate term would have been 'recently', but that

would weaken his and your arguments about BMV.

Incidentally, would the property be a viable renting

proposition at the higher end of the range?

ABB

Not to me it wouldn't, but maybe to someone else. I'm not interested in places unless they pay me in monthly cash for my trouble. CG is obviously a nice reward too.

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Guest Time 2 raise Interest Rates

Not sure what you mean.

My, that's convenient. Are you the same TTRTR I had a £100 bet

with regarding the future movements of interest rates or are you

another TTRTR? If it helps jog your memory, read Dr Bubbs topic

titled 'Surprise Rise' and then go to page 3. It may help. B)

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...

Now him putting this down is very unusual in my experience, I have never seen comments like them. But it occurs to me that if that isn't confirmation of BMV, I don't know what is.

So there you have it IMO, a genuine BMV purchase.

BMV, eh.

Today's bargains are tomorrow's market price.

Good luck with it... ;)

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My, that's convenient. Are you the same TTRTR I had a £100 bet

with regarding the future movements of interest rates or are you

another TTRTR? If it helps jog your memory, read Dr Bubbs topic

titled 'Surprise Rise' and then go to page 3. It may help. B)

My my aren't we sensitive :lol:

I'm just teasing you. We haven't passed the Dec meeting yet have we?

Also, if I should lose the bet, how can I pay while maintaining my anonymity?

BMV, eh.

Today's bargains are tomorrow's market price.

Good luck with it... ;)

Not if I can get it revalued in 6 months for 650k & MEW my way to paying TTRIR & a few other bills.

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Guest Time 2 raise Interest Rates

My my aren't we sensitive :lol:

I'm just teasing you. We haven't passed the Dec meeting yet have we?

Also, if I should lose the bet, how can I pay while maintaining my anonymity?

We haven't passed the December meeting yet? So what are you saying? You

think they may cut them. If you are, I'm more than happy to double or quits.

If you should lose, I feel that's a foregone conclusion, how can you pay while

maintaining your anonymity? Beats me, but I've always wondered who you really

are. May be it's time to find out or are you gonna welch on me? :P

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Guest Time 2 raise Interest Rates

What does welch mean?

:D To quote the latest editon of the Collins English Dictionary,

welch means 'fail to pay a debt of fulfil an obligation' ! :D

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Guest Time 2 raise Interest Rates

Mate, you are a nervous one. The bet ain't over yet & you're trying to call it early.

Relax

Not nervous, not trying to call it early, just trying to get you to

double or quits. But hey, we'll leave it there. You're obviously sure

there'll be no change after all that hot air back in August about how

rates are going to plummet. Nevermind, we can't all be right. ;)

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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