The housing market emerged from a hectic 2021 with out of kilter pricing, which means buyers could need to find thousands of pounds more in cash to secure their dream home.
However, bidding wars that drive up the price can have unintended consequences for both buyers and sellers. Down valuations occur when a surveyor, working on behalf of a bank or building society, values a property below the price agreed between the seller and buyer. It means lenders can withdraw or dramatically reduce their offer and cause sales to collapse.
As the market cools a growing number of sellers will have price expectations not matched by a surveyors’ valuation and mortgage brokers reported down valuations were on the rise towards the end of 2021.
But there are steps you can take to prevent your home, or the property you are hoping to buy, from being down valued.
Do your Research.
Surveyors will compare similar homes that sold in the same area in the past six months to value a property for a lender. This can easily shave tens of thousands of pounds from an agreed price – particularly if the property has had building work, such as an extension, which makes it bigger than comparable nearby homes.
There is no harm, therefore, in doing your own research to show the surveyor ahead of the valuation, said Carol Peett, managing director of West Wales Property Finders, http://www.westwalespropertyfinders.co.uk a buying agent.
Certain types of homes are more susceptible to down valuations, such as houses in rural locations with a lack of nearby and comparable properties for surveyors to base their valuation on. ….
Ms Peett added: “Down valuing is a huge problem at the moment, particularly in coastal areas like west Wales where a property with a sea view is often worth at least double, if not quadruple, that of a similar property half a mile inland”.
“Often lenders use a panel of surveyors who are from outside the area and so are unaware of the small nuances in the local market which makes one area so much more, or less, valuable than one a few miles away”.
“I would suggest it is always worth both buyers and vendors doing their research, and pointing out to surveyors why the area is so desirable and asking to compare it with a similar location which is attractive for the same reasons.”
“These reasons could include proximity to a railway station in a commuter belt, in the catchment of a good school or in an area popular with second home owners”…..
The Daily Telegraph – Wednesday, 16th February 2022 – https://www.telegraph.co.uk/property/house-prices/what-to-do-house-down-valued-wrong-valuation-2022-mortgage/
If you are looking to buy a property in Pembrokeshire, Carmarthenshire or Ceredigion, give West Wales Property Finders a call on 01834 862816. We can find your perfect property for you whilst saving you time and stress.