We are proud to say that we are one of the only estate agents in Gloucestershire to challenge a mortgage lenders down valuation of a property.
Furthermore, at the time we have written this article, we are also proud to say that Robinson David Estate Agents in Gloucester are the only estate agent in Gloucester, Cheltenham, and Stroud with a 100% success rate at working with surveyors, mortgage brokers, and lenders to re-adjust their down valuation.
This is because we value our properties with our three core values in mind: honesty, integrity, and reliability, with justification and evidence for our pricing.
However, we know that in a down turning market, an unsuccessful down valuation challenge will be at some point inevitable.
WHAT IS A DOWN VALUATION?!
It’s a scenario that estate agents, home sellers, and home buyers want to avoid as it can cause a headache, breaking chains, scuppering sales as well as purchases during re-negotiations that must happen with a down valuation. These renegotiations may have to happen in multiple areas within a chain, even if just one property in a chain is down valued.
When a buyer is applying for a mortgage for the purchase of a property, their mortgage lender won’t lend on just any property, they’ll want to know the property being purchased is structurally sound and the estate agent hasn’t over-valued the property within the current property market. This means that the lender will want a surveyor to perform a survey on the property. If the surveyor is happy with the property and with the price the estate agent has valued the property at, then the lender will lend the mortgage.
However, putting aside whether the lender feels there are issues with the property, which causes all kinds of other headaches, if the lender just feels that the price of the property was set too high by the estate agent, they will suggest by how much to the mortgage lender and the lender will down value the property.
Most mortgage brokers will know that challenging a down valuation feels to have an almost zero chance of success. Which means that renegotiations along the chain will be needed. This is a scenario that needs to be carefully considered navigated by estate agents, as buyers can lose the property they’re purchasing, sellers can lose their buyers, and chains can collapse.
WHAT TRIGGERS A DOWN VALUATION?
The five main reasons why a down valuation is triggered are:
- The estate agent has over-valued the property.
- The bank is being exceptionally cautious in a downturning market.
- Issues have arisen on the survey of the property.
- Lack of local property market data by the surveyor.
- Lack of knowledge about the property when a drive-by or online valuation has been carried out (not knowing the property has an extension for example)
DOWN VALUATIONS CAN BE CHALLENGED
Challenging a down valuation takes time, usually around two weeks, and according to many mortgage advisors most challenges almost always fail. Robinson David Estate Agents in Gloucester, Cheltenham, and Stroud having four successful down valuation challenges is a credit to the accuracy of our valuations.
Because challenges often fail, many estate agents won’t bother to challenge a down valuation, instead they’ll just sell the difficulties of challenging a down valuation to their vendors as if it’s a ‘done deal’, when it isn’t, and how creating a case to challenge it will add extra time to the sales progression.
However, down valuations can be challenged, and it’s within the best interest of the vendor and the buyer that the estate agent does challenge the down valuation, especially if the property has been valued correctly with justification and evidence to backup the valuation. Problems begin when an estate agent has over-valued the property to just “win the business” from other agents, which frustratingly happens a lot in Gloucestershire,
So long as the estate agent is proactive at keeping the chain up to date, most chains will be happy to wait for a down valuation challenge, as a successful challenge could save headaches at different parts of the chain also.
Luckily, because at Robinson David Estate Agents in Gloucestershire we research local market data and value our homes to the current market value, we have only experienced four down valuations, all four being due to the surveyors on these occasions being overworked only able to perform “drive-by valuations”, or “online valuations”, where the lenders naturally expect an element of inaccuracy from such valuations.
To challenge a down valuation, a data backed case must be created and sent. Because we value our homes accurately, when it comes to working with the surveyors and lenders challenging their down valuation, we are able to create a case thats compelling, providing justification and evidence for our pricing.
SURVEYORS AND LENDERS ARE REASONABLE
“Challenging” sounds very confrontational, but it really isn’t it’s just an appeal. If justification and evidence can be provided, a surveyor will happily work with the estate agent and adjust their valuation for the lender, and lenders will listen because they want to keep a healthy property market moving.
Surveyors are overworked, and can often only perform a “drive-by valuation” or an “online valuation”, so they expect an amount of inaccuracy.
Banks are being extra cautious right now, so over-valuing a property is not a strategy worth risking in a downturning market, as often a down valuation will frustratingly be less than what the true value of the property is and could have been listed at and achieved, which wouldn’t have triggered a down valuation.
Be sure to use an agent who doesn’t over-value your home just to secure it from other agents. Make sure any estate agent valuing your home can justify the value that they’re giving you.
If you would like a valuation on your home in Gloucestershire, be sure to contact us here.