Incorrect Mortgage Valuation

In message , screamin writes

no

No, but check they areent requiring too much insurance cover.

They have to have contractual relationship with an independent valuer, usually form an approved panel. You cold have knobbled you valuer for all they know.

yes

Dont worry about, do nothing and just proceed as though it had never happened.

The survey you had was to check that the house was in sound condition. The lender had a valuation to check it was adequate security. Put the errors made in writing to the lender.

"john boyle" wrote

"Contractual relationship" between lender and valuer = *not* "independent" !!! After all, their valuer is just that - *their* valuer. They are *not* independent.

"john boyle" wrote

Well, equally the lender could "knobble" *their* valuer, in the opposite direction (undervalue) - which can & does happen. [I've seen it.]

In message , Tim writes

Well, I cant help it if you dont understand it. Perhaps if you were to think along the lines of 'independent from the purchaser and vendor', does that help?

And to what end would a lender want this?

To require a MIG (insurance rather than the aeroplane)?

OK, but why does that matter anyway? Will the surveyor give a *different* value if they are instructed by different clients (purchaser, vendor, lender...) ??

In the case in question, it would (appear to) have been so that the "maximum" 95% / 90% mortgage was lower. In other words, the maximum wasn't really 95% - it was somewhat less than this!

"Doug Ramage" wrote

That's another good possibility.

Potentially, yes. If he is paid by the vendor's estate agent, for example, he may well be pressured into over-valuing the property. Why? Because the agent then received a higher commission. If he is paid by the vendor, he is may similarly be pressured so that his client receives more money from the sale. The purchaser, would obviously have a vested interest in an under-valuation.

Mort Co.s therefore use THEIR valuer (ie independent from all the vendors, purchasers and their agents) in order to help them decide a propertys value.

It is not a difficult concept!!!

Marcus

"independent"

It is usually more about being able to sue for negligence. Most purchaser's surveys exclude reliance by a 3rd party.

The lender is concerned about valuation, whereas a purchaser is also concerned about condition.

If you had wanted to save some money, you should have requested the lender's valuer/surveyor to do a full structural survey at the same time as the valuation for mortgage purposes.

However, I prefer to instruct my own surveyor and pay the extra for the comfort that he is acting solely on my behalf.

"Marcus Collie" wrote

So, let's get this right - you are saying that surveyors **do not act professionally** and, rather than value houses based solely on the condition/size/location etc of the house itself, they are actually open to "persuasion" from their client?

That makes a total mockery of the valuation process ...

No he's saying that the Mortgage people wan't to protect themselves from that happening, so they want to use a valuer on their own panel, with their own contractual relationship, someone they've trusted and paid. I don't see what's odd about this.

Jim.

Thanks for all the answers, my financial advisor phoned this morning (I know on a Sunday) to say she had recieved a copy of the offer but she wanted a quick look at all the other paperwork.

I am faxing it all across tomorrow and I will see if she notices.

I had my survey done for piece of mind, I understood that they may have wanted their own surveyor to have a look at it. It was an objection to the cost considering he got it wrong, but in the end I have benefitted from that error. I am just torn over what to do next, I will wait to see if anyone else notices it.

Once again, thanks for the answers. I will keep you updated.

In message , Doug Ramage writes

He he! Well I agree that would be the result of a 'downvalue' but I have never seen an example of a lender instructing the valuer to downvalue for that, or any other, purpose.

--------------------- > >> "Tim" wrote > >> If he is paid by the vendor, he is may similarly be pressured > >> so that his client receives more money from the sale.

---------------------

Actually, I *didn't* write the above. Be more careful when snipping!

"Tim" wrote

"Jim Ley" wrote:

You mean "Yes" (see below) ...

"Jim Ley" wrote:

Which pre-supposes that it *does*, > ... so they want to use a valuer on their own

... the reason for which, he/you are saying, is (essentially) because surveyors act *unprofessionally* ...

In message , Tim writes

to rove there is no co-ercion

The basis of the valuation will be different and the request form the lender will carry an extra question 'Is this house suitable as security for a loan of £xxxx?. That is the key question and contractual liability between the valuer and the proposed mortgagee can only be established if the lender instructs the valuer. A valuation for mortgage purposes can sometimes be different to a valuation for potential sale.

I have come across many examples where the valuer has already surveyed the property and has agreed to provide a valuation for a mortgagee on the mortgagees form for the payment of a smaller fee, but the fee is not usually reduced substantially because of the responsibility the valuer takes on when answering the 'suitable security' question.

And why would the lender want to do this?

In message , Tim writes

I think you are misunderstanding what is meant by 'vaulation'. It is largely opinion and different valuers will express different views on a single property. It is always a matter of 'given willing buyer and seller'.

I never said you did please learn to read attributions....

No, which simply pre-supposes that it could happen, and a mortgage company is stupid to trust a 3rd party valuation who they have no contract with, and no knowledge of to base their lending deicison, it would seem pretty negligent to do otherwise IMO.

No, that they _could_ act unprofessionally and mortgage co. just not put themselves open to unnecessary risk. There's a difference.

Jim.

Me neither. :)

But if something like that were in writing, it might well be fraud.

"john boyle" wrote

I don't think so - please humour me!

"john boyle" wrote

Yes, of course - it is the particular surveyor's opinion of the "given willing buyer and seller" price. However, any change in this opinion

Do you not agree?