Dave,

Great advice. Even better given it is your first post here.

Welcome to PT. I am looking forward to your 2nd post.

Hi Dave,

Yes superb advice - thanks for sharing.

Very kind of you both to offer such a warm welcome.

Glad I've added value.

Look forward to learning and helping.

Thanks again.

Some good comments by Dave there but as a hopefully not useless broker!! I'm afraid it isn't always so easy.

In one recent case the property had been bought at auction by a professional developer who did a full refurb. The first time buyer happened to have a father who was a solicitor so he contacted her lender Abbey to clarify the exact position, they agreed all was fine and they'd allow the sale even though it was just over 3 months.

They exchanged and then on the day of completion Abbey withdrew stating that the property had not been owned for 6 months! (I wasn't the broker btw I was asked to rescue it but no go.)

Similarly I'm aware of Abbey allowing others through!

It's often called the 6 month rule and I wish it was a rule as at least we would all know where we stand! In fact it's a guideline that's been in there for a little over 10 years. It was introduced as the Land Registry system was archaic and often didn't update changes in ownership quick enough so it was an advisory for solicitors to ensure the seller actually did own the property to prevent fraud.

As a result of the credit crunch and a lot of NMD fraud, cashbacks, gifted deposits etc it was an easy way for lenders to crack down on these with existing 'rules'.

Most of the buy to let lenders flatly refuse an onward sale inside 6 months, some will work off the SELLERS original purchase price and a couple are fine subject to circumstances. But this is where you are SELLING to a buy to let investor.

It makes absolutely no odds whether the SELLER bought cash or had a mortgage.

But most refurbed onward sales will be to resi buyers and as highlighted above this is much harder as the lenders are applying it completely haphazardly.

I will say if you've simply bought BMV without doing ANY work at all then I wouldn't fancy your chances at all! If you've done a complete refurb then as Dave said all you can do is put everyone in the picture.

If it fails the worst thing to do us pull out and lose your committed buyer; most mortgage offers last 3-6 months so move them in as a tenant on a free or discounted rent and complete as soon as the 6 months pass.

Lisa
http://www.keys-mortgages.com

Excellent advice as usual Lisa. Could I just get clarification on 2 points:
- if no or only minor refurb work is done what are the prospects of getting an increased valuation after 6 months? Is there a maximum percentage increase which lenders are likely to allow in this case?
- are there any issues if the property is marketed after say 3-4 months with the intention that completion will be as close as possible to 6 months?

Hi Nick

Re point 1 - it's purely down to valuers opinion. I usually say to clients don't put the family jewels on it but we'll give it a shot! Had two recent cases to demonstrate the fact:-

1. Bought BMV and did major refurb and valuer undervalued by £20k even with 8 sold comparables nearby he refused to budge.

2. Bought BMV and barely any work done, I thought it wouldn't value above £110k but we tried at £125k and got it!

Valuers!!!!

Re point 2 - absolutely fine and beat way to ensure as quick a sale as possible without falling foul. I must add I've sold a buy to sell via Countrywide estate agents and they refused to list it till I'd owned it 6 months - luckily I had but agents very wary due to wasted time.

Lisa

Thanks Lisa!
So lenders effectively set market prices! If a lender downvalues despite recent comparables showing the market value of the property is there anything the buyer can do, apart from increasing their deposit?
What happened when the market was booming, eg in 2007 - were lenders happy to value up then in pace with the market increases? How did they decide true value then?
What experiences have others had of downvaluing?