Reply to: Mortgage house valution surveys

[ChimpMaster]

i know i might get stung for my naivity here, but i've only just realised that the property i'm buying could cost an additional £10k in Stamp duty if i don't complete before 31st March.

Mortgage offer is still pending from the underwriters, been with them since last week, following valuation.

Neither my borker or solicitor has ever mentioned the impact of not completing before April 1st, which i'm pretty pee'd off about.

sent the mortgage broker an email last night and she wrote back advising "it should be any day and they are aware of the situation" (would have been nice if they told me)

Now we're not in a chain and i don't think our vendors are (at least they weren't on the initial house they were trying to purchase but pulled out of that one and have found somewhere else) woudl it be reasonable to go from mortgage offer to exchange to completeion within 2 weeks?

If there is a chain ahead of them as a mitigation could i insist that we complete before the 31st March and if they are unable to move out could i write up a short term tenancy agreement until their (possible) chain clears?

Would this be a logical / reasonable option?

Assuming no issues with the survey, the lender should offer quickly but get your broker to chase. I have an awesome broker and I hope yours is the same too.

However, the main cause of delay is with solicitors - on both sides - so you need to speak (phone) with your one and let them know the deal. You need to then tell them to contact the seller's solicitor and let them know the deal too.

You still have 3 weeks, so hopefully it'll be OK. Exchange and completion can be done on the same day if the solicitors agree.

I'm selling a property and hoping to complete before April and the buyer is still awaiting a damp survey before the lender will offer.

SART (sell and rent back) is not allowed so be careful with this unless you unofficially let the vendor live there, not that I would do that.

[filthy1980]

i know i might get stung for my naivity here, but i've only just realised that the property i'm buying could cost an additional £10k in Stamp duty if i don't complete before 31st March.

Mortgage offer is still pending from the underwriters, been with them since last week, following valuation.

Neither my borker or solicitor has ever mentioned the impact of not completing before April 1st, which i'm pretty pee'd off about.

sent the mortgage broker an email last night and she wrote back advising "it should be any day and they are aware of the situation" (would have been nice if they told me)

Now we're not in a chain and i don't think our vendors are (at least they weren't on the initial house they were trying to purchase but pulled out of that one and have found somewhere else) woudl it be reasonable to go from mortgage offer to exchange to completeion within 2 weeks?

If there is a chain ahead of them as a mitigation could i insist that we complete before the 31st March and if they are unable to move out could i write up a short term tenancy agreement until their (possible) chain clears?

Would this be a logical / reasonable option?

[xoggoth]

Boring. Can't see anything interesting about watching tennis. Apart from Serena's bottom anyway.

[Emma Power Mortgages]

Mortgage Valuations

The purpose of a basic mortgage valuation is to confirm to the lender the property is worth what you are paying for it so that if you default they can sell the property and get their money back. This means that you may of managed to buy a property £100,000 less than market value but the survey, in the majority of cases, will only confirm the purchase price. There are a few occasions where they will confirm if there is damp or movement etc. affecting the value of the property.

They will value the property based on comparable evidence in the area (properties sold and completed in the last 3-6 months) the valuation can be appealed on this basis as well, you cannot just put any value you like on an application and expect the surveyor to agree.

It is likely due to the current market that properties will have increased in value but, again, is largely dependant on where you live.

It is also likely that your property will of increased in value if you have completed works to the property, for example an extension. This does not include £20,000 on a new kitchen or bathroom, unfortunately, that can be put down to taste and could be ripped out by the potential buyers. It is also wise to remember before completing works that there is often a ceiling price on the road or area so you may not increase the value of your property by as much as you think.

For remortgage applications, provided your valuation doesn't differ wildly from the housing prices index, it is likely that they will conduct a drive by or desk top valuation


I hope this helps

[TheCyclingProgrammer]

Regarding our improvements, they are numerous but I'm not sure which ones will add value, which is why I'm not sure whether it will be worth getting anything more than the standard lenders survey (they aren't going to come inside and look at our improvements are they?).

We've certainly increased the saleability of our home but that's irrelevant as we're not interested in selling, just reducing our LTV.

In the past year we've pretty much refurbished 80% of the house (re-plastered throughout including all the hideous upstairs artex ceilings, new skirting/architraves, redecorated throughout, new internal doors, new flooring and carpets), gutted the old leaking downstairs shower room/toilet and had it completely refitted with a good quality shower and enclosure and concealed toilet, replaced all the old radiators in the house (most of them), had new valves fitted and a new combi boiler installed, brand new composite doors on the front and back of the house, boarded out the loft to add storage space, fixed numerous issues raised in our survey and other overdue maintenance, partly wired the house with CAT5e and hard-wired 5.1 speaker cabling in the lounge, the list goes on.

If we were trying to sell the house I think we'd sell it quickly but of all the things above the only things I do think add some value are the shower room refit and new boiler. I have no idea about any of the rest of it. We've probably spent between £15-20k on improvements. The only rooms we haven't touched as yet are the bathroom (next year maybe) and the kitchen (still in pretty good nick, just needs a lick of paint). We also intend to gut the back garden and have it properly landscaped and add my garden office which will no doubt add value but not before our mortgage deal is up.

If we could get it valued at £340k I'd be very happy! I'd love to get the estate agent who sold it to us in the first place back but I'm not sure he'd believe that we're selling up. Looking at local advertised prices there is definitely an increase across the board but more like £10-15k for similar houses to what we were viewing before.

[ChimpMaster]

According to that website, our house value is £337k (we bought it for £301k a year ago). Consider me skeptical.

Of course, if it really was worth that much we'd almost be on 70% LTV.

In / around London +10%/year is not strange. Mine is *apparently* at +25% in 2 years. A bit scary TBH

I wouldn't be skeptical - the market has gone ballistic over the past year, to the point that many property investors are now placing bets on when the supposed 'crash' will occur.

We bought a house 12 months ago for £250k and are selling it now for £340k - yes +36% in one year - and it has been rented out at £1k/month net profit during those 12 months. (tax calculations all ready and lined up for payment btw )

The full structural survey indicates a couple of problems, but we'll sort those. The valuation came in fine, which did surprise me because usually the surveyors will be skeptical of big, fast price increases. But looking now in this area, it's actually very difficult to find a 3 bed house for less than £360k even.

Frankly, yes I am shocked at house price inflation this past year. I think it will abate, but the market isn't yet slowing down at all.

[vetran]

You know the general public are in trouble if contractors pull such faces over these numbers.

it was to wind up Mauve Monkey

However it comes to something when your house 'earns' about the same you do even as a permie.

wait till we add the 5th bedroom & the two ensuites.

[The_Equalizer]

only +£70K in a year

You know the general public are in trouble if contractors pull such faces over these numbers.

[Martin@AS Financial]

thanks

yeah i've asked for a full structual survey, awaiting the report was just notified that the valuation came back exactly as per sale price hence the original question

Great news - you should receive your offer shortly and hopefully exchange of contracts shouldnt be too far away as long as the solicitor is happy with their enquiries.

[TheCyclingProgrammer]

In / around London +10%/year is not strange.

Perhaps, I'm in Colchester and the crazy price increases hadn't quite reached out that far when we bought but they were heading that way (we were looking in Chelmsford to begin with).

[Lightwave]

thanks

yeah i've asked for a full structual survey, awaiting the report was just notified that the valuation came back exactly as per sale price hence the original question

It's a number tested in the market and keeps everyone happy.
I suspect there is no reason to argue with the sale price unless the valuer thinks it is outside his judged range.
Everyone's value estimate is generally +/- at least £10k or several %.
Why tell the vendor they've taken too little, or the buyer they've paid too much, if the agreed price is within 2 standard deviations of your guesstimate?
When you've owned the house a few years, if you paid slightly over the odds generally does not matter.
I suspect I paid a bit (maybe £10k? in £180k) over the odds for our house in 1996, but it would have cost a lot more to wait and its small beer in house terms now.

[filthy1980]

thanks

yeah i've asked for a full structual survey, awaiting the report was just notified that the valuation came back exactly as per sale price hence the original question

[Martin@AS Financial]

quick query

mortgage initiated house valuation surveys, is the surveyours remit to give a valuation of the house or is it more like "purchase price is £X is it at least worth that much?"

There are 3 different types of survey you can go for - Taken from the Royal Chartered Institute of Surveyors:

Survey level one: RICS Condition Report

Shows the condition of the property, offers guidance to legal advisors and highlights any urgent defects. Typically the lowest priced of the surveys, it is aimed at conventional properties and newer homes.

Survey level two: RICS HomeBuyer Report

Includes all the features of the RICS Condition Report, plus a market valuation and insurance rebuild costs. It also includes advice on defects that may affect the value of the property with repairs, and ongoing maintenance advice.

Survey level three: RICS Building Survey

Essential for larger or older properties, or if you’re planning major works. The most comprehensive report provides you with an in-depth analysis of the property's condition and includes advice on defects, repairs and maintenance options.

[vetran]

only +£70K in a year

[Lightwave]

Zoopla valuations cannot be relied on for anything except a good laugh. You can actually 'claim' your house on Zoopla and then ask them to put a specific value on it, so long as it is at least somewhat realistic of course.

.....

People down the road from my new house ought to claim theirs, and have Zoopla re-value it as a 6 bed house rather than a building plot. I think that would shift the postcode average quite a bit, as there are only 4 houses in the postcode!