Unless you are happy to pay more than a house is worth, it may not be not such a bad thing if your mortgage valuation is less than you had been prepared to pay.
Is your mortgage valuation less than the agreed purchase price?
A number of buyers purchasing a property with a mortgage see the mortgage valuation as a potential hiccup in their purchase. If a buyer is relying on a mortgage with a large loan to value they may not be able to proceed as planned if the lender’s Valuer provides a valuation lower than the agreed purchase price. Similarly, some buyers are concerned that the mortgage valuation may lead to a buyer pulling out (or making a lower offer) if they don’t get the mortgage offer they had expected.
If you had your heart set on a particular property and find you are unable to proceed (unless you use some of your own funds) then at minimum this is likely to be a disappointment. If you have to start and look for another suitable property this may cause a delay, which could possibly lead to problems with the chain and you may even lose your own buyer.
But is it really a bad thing if your mortgage valuation is less than the purchase price?
If you spend the time finding out why the property has been valued lower than the price you have agreed to pay, you may find there is a good reason. A Valuer will use details of similar properties which have recently sold or are under offer, in conjunction with their knowledge of the local area, to arrive at the valuation figure. It is possible that you have made an offer which is too high. Other factors which may affect value include:
- Condition of the property (remember that a valuation is not a survey).
- Works carried out without Local Authority approvals.
- Planning proposals which may affect the property.
- Detrimental use of land/property in the vicinity.
Once you establish the reason for the lender’s valuation being less than your agreed purchase price, you may wish to revise your offer, or even reconsider the purchase. So, unless you are happy to pay more than a house is worth, perhaps it is not such a bad thing if your mortgage valuation is less than you had been prepared to pay.
When choosing a survey, the name of the survey report does not really matter. The most important thing is to check what your report will cover and make sure it will provide the information you are looking for.
What type of survey should we have? This is a question many house buyers ask when choosing a survey, puzzled at the assortment of terms, including Building Survey, Homebuyer Report, Condition Report, and more.
Putting terminology aside, what do most buyers want from a survey? A typical house buyer would want to be aware of any repairs needed, the urgency of any repairs and have an idea of costs involved.
Some buyers choose a property knowing that works will be required and the survey will help them plan the works and obtain estimates from contractors. After all, there is little point going ahead with fitting out a new kitchen or decorating when more disruptive works such as rewiring need to be attended to first. On the other hand, some buyers seek a property which needs as little work as possible (although, inevitably it is likely that some work will be necessary).
Whatever the name of the survey, it is important to check what will be included. Most pre-purchase surveys have a similar level of inspection, but the information within the report can vary from one surveyor to another. This can be due to the level of knowledge and experience of the surveyor and the amount of time spent carrying out the survey and preparing the report. Some firms place high demands on their surveyors and expect two (and sometimes more!) surveys to be carried out in a day, whereas other firms allow more time for each survey and are more likely to produce a more thorough and detailed report (which may be reflected in the cost).
In a nutshell, when choosing a survey, the name of the survey report does not really matter. The most important thing is to check what your report will cover and make sure it will provide the information you are looking for. And most importantly, make sure you choose the right surveyor, ideally someone who has been recommended to you and is familiar with the local area.