How to avoid low valuation disappointment

by Mark Alexander

10:27 AM, 5th April 2015
About 4 years ago

How to avoid low valuation disappointment

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How to avoid low valuation disappointment

How to avoid low valuation disappointment

Have you ever had that awful experience of learning that a mortgage valuer has down valued your property?

Property118 was created to facilitate the sharing of best practice. For that reason I think many readers will find this discussion thread very useful so sign up to get comment notifications at the bottom of this article and then click the green button.

I’m not going to start this thread by sharing what I do to help valuers to come up with the right figures, save to say that it is nothing dodgy of course. Hopefully there will be nobody suggesting that wads of cash will help!

I know for sure though that valuers do make mistakes, I also know why. They are human beings, just like you and I. They have targets to meet and they only get paid a tiny fraction of the money that borrowers pay to mortgage lenders in terms of valuation fees. Therefore, they have to turn things around very quickly if they are to earn a decent living. There are lots of things that can be done to help them to arrive at the correct figures so who wants to be brave enough to make the initial list of suggestions?

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Comments

Anon

11:17 AM, 5th April 2015
About 4 years ago

A good starting place is a bit of research. People often think their property is worth more than it is and are disappointed when they learn otherwise. I have been in this situation because I purchased a property which I was told was 26% below market value, but it wasn't!

There are a few website where you can check sold house prices such as HM Land Registry (http://houseprices.landregistry.gov.uk/) and Rightmove House Prices (http://www.rightmove.co.uk/house-prices.html)

Make sure that you are comparing like with like, there is no point you comparing your two bed terrace with a 4 bed detached just because it's only two doors away.

Print off the information you find and give it to the valuer. Also, ask him whether he's done any research on comparables and chat to him about that. It is much easier to have that discussion before he commits himself to a figure at the point of reporting to the mortgage lender, Nobody likes to be told they are wrong so it is much better to make sure you both agree before the valuation is formalised.

If you purchased the house cheap and have done a lot of work to it then bear in mind that the valuer will probably check to see when you purchased the property and how much you paid. That might be his only comparable if your property is any way unusual so don't be surprised if he only adds an indexation allowance if he doesn't know what work you've done. If you have done lots of work give the valuer a schedule of works, costs and if possible receipts too.

In my experience, the easier you can make a valuers job the more realistic he will be with his valuation figures.

Martin Gardner

18:02 PM, 5th April 2015
About 4 years ago

I recently borrowed on one of my properties and have lived in it so knew the area and recent sale prices, I had also refurbished the property and extended certain areas making it different than the other new build on the street. The valuer gave a valuation of £115k, which I deemed unfair and challenged the pricing, the lender said he had done a drive by valuation, I said he hasn't visited and he took value of Zoopla or similar. I knew the prices for non extended was around £130-£135 and next door but one had part ex to a new Barrett home so sold below value at £109k which didn't help. I got them to come out to see it and hit a revised valuation of £140k quite a big difference, once all facts had been given.

Joe Bloggs

18:29 PM, 5th April 2015
About 4 years ago

ive come to expect a down value (as valuers have an inherent conflict of interest of risk exposure minimisation), but sometimes its so ridiculous; if i could buy at that price i'd buy the whole street!

james pearce

20:08 PM, 5th April 2015
About 4 years ago

I recently had the rental value come in low although the property valuation was as expected and despite myself and friendly estate agent putting a case forward the lender would not have it.
In the end we had to go to a different lender. the irony is the property rented within 3 days of completion for 100quid a month more than the valuer would accept!!!!! we all get it wrong sometimes........

Mark Alexander

20:26 PM, 5th April 2015
About 4 years ago

Reply to the comment left by "james pearce" at "05/04/2015 - 20:08":

With the benefit of hindsight James, what do you think you could have done differently that might have helped the first valued arrive at the correct figure first time?
.

james pearce

20:33 PM, 5th April 2015
About 4 years ago

Hi Mark,
It was I think one of those unfortunate occasions when you're doomed from the start......he said the claimed rental income was over the top and we produced 6 comparable properties to demonstrate rental income and he just wouldn't buy it!!!! the physical valuation of the property was fine, it was just the rental issue.
Luckily switching to a different lender didn't cause too many delays.
One of the problems is I believe that rents have shot up quite a lot recently and perhaps a few valuers haven't moved with the times.
To be fair it's the only time I've had a problem in the dozen or so mortgages I've done so it was bound to happen sooner or later.

John Frith

22:47 PM, 5th April 2015
About 4 years ago

If you already own the property, ask for written valuations from a few local estate agents. If you are looking for a low valuation, tell them you are looking for a quick sale. Or tell them you want a full valuation as you are not in a hurry.

Pick the one most favourable to your cause, and hand it over to the valuer (if?) when he calls.

My reasoning is that they are more likely to give that kind of valuation if they can put something from a local agent, valuing it similarly, in their file.

Mark Hulbert

7:11 AM, 6th April 2015
About 4 years ago

Meet and befriend the valuer when he comes to value. coffee etc. Have prepared as authoritative a pack as you can, neatly presented - internet comparables, list of features that make your property more valuable, local agent valuations, your purchase price + receipts for improvement works done.

Jonathan Clarke

8:44 AM, 6th April 2015
About 4 years ago

This is a crucial part of the whole investment process. I agree with Mark Hulbert. Produce a professionally looking pack for them. They have busy days and you are in effect doing as much as you can to assist their decision making process. Your aim is to cut down on their time to investigate the reasons and conclusion in their final valuation. That should please them we all like a helping hand

Imagine they had an employee working for them. This is what they would get them to do in preparation for all valuations on any given day. Its a conveyor belt for them. Make their ride smoother. You play the role of their secretary their P.A. their admin assistant their packager. Call it what you will you are in a support role. They are your M.D (for just that one day )

Its crucial the valuer plays the lead role and you play the subordinate. Dont over sell your view or overplay your role which may be right but likewise will be naturally biased towards yourself . They are human and no one likes you to be too smart. Be submissive, helpful and polite not controlling, dominant.and demanding And if you meet them on site say your sales pitch then leave them alone to do their job. Don`t hover on their shoulder and annoy them. They have the power to go perhaps 10K under what you want so dont be too clever - give them space and let them do their job in peace

That is stage 1 . If that works thats fine sometimes it doesnt so stage 2 is the appeal.
Add more detail if required but in a calm professional detached manner. Evidence your reasons and make your case as watertight as you can. There is no scientifically provable right answer so don`t act as if there is. Its just your opinion v their opinion.

That approach has worked for me. A one page A4 page report gained 20K once for a client of mine on appeal. That was 6 mths after purchase when we went for a remortgage and we didn`t even do a SINGLE thing to the property to enhance its value. I just bought well for him

Valuers will give you the valuation you want sometimes and they will change their mind sometimes but you have to put them in a position to enable them to do that smoothly and cleanly without them losing face.
.

Paul Thomas

10:18 AM, 6th April 2015
About 4 years ago

Very timely advice. I'm just about to get two properties valued. I will take some more material along with me to see the valuations officer ! As it's a pain to change a valuation after it's occurred.

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