The Question
I’m in a bit of a quandary. We are in the process of buying a new home and it was all going well until the surveyor for our mortgage lender valued the property lower than the price we had agreed with the seller.
We settled at £524,000 but the valuer has gone for £510,000.
We have been informed we either need to find the difference or renegotiate with the seller, although the latter is not something we think would get us far.
Someone mentioned we may be able to appeal against the valuation or get a second opinion. The problem is we also have an offer in for our current house and therefore stalling for too long may break the chain.
What is the most common route for buyers in this situation? We would value some advice, please.
The Answer
This is a very common problem at the moment as the market is running incredibly hot and buyers are fighting over properties, which is, in turn, inflating prices.
Valuers need to confirm the market value based on historical sold prices, so often, there is a mismatch in terms of the numbers.
Here are your options:
1) Appeal the valuation, which should take no more than two weeks, although you may not get a satisfactory answer. You will need to provide details of three similar properties in proximity to the subject property that have sold for a higher price.
2) Negotiate with the seller.
3) Apply to a different lender with the hope that a different valuer will go out and provide a more favourable number.
4) Cover the shortfall yourself.
I would encourage you to pursue options 1 and 2 in the first instance… Good luck!
Jeni Browne is business development director at Mortgages for Business
You can read more of Jeni’s advice on readers’ residential mortgage questions here. If you are interested in a buy-to-let mortgage, Jeni also writes a Q&A column on this area of the mortgage market, here.
If you have a question you would like to ask Jeni email kate.saines@emap.com
