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  • Property-a-holics

    valuations

    Hi Tribe membersA question on the valuation process if somebody could please share there thoughts when buying a property at a discount [not NMD].If a property you think is worth 100k do you get a private valuation first so
    they value it 100k [from comps] then get another one when you buy the property
    so hopefully they will value it at 100k  [the valuer on behalf of the lender]
    then say you are purchasing it for £70k so the pp is now 70k and remortgage to
    100k later on?You would never tell a private valuer your pp of 70k would
    you as you just want a private val of the property to what its worth on the open market?What would happen if
    you told a private RICS surveyor the pp of 70k, would the second valuer on
    behalf of the lender now value the prop at 70k - if so and you know comps are
    going for 100k you can remortgage to the OMV?So in a nutshell what is
    the process, do you get a private val first to ensure the prop is worth 100k
    then do you tell the the second valuer who hopefully values it at 100k the pp of
    70k?The above is assuming no works needs to be done.What if comps were selling for 100k, but this property is currently worth in its condition say £80k but you negoitated the price to £70k, how would the valuation process work? Would you tell the private valuer/ or the one that comes out for the lender [if your going ahead] that I'm buying for 70k, I think it is worth 80k, what do you think after works it will be worth on the market value? Would there be any point in getting a private valuation done first in this case as the property is only worth 80k in its condition and not £100k..Thanks before-hand [I'm sure I will get a lot of detailed answers, esp from Lisa].
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    The private valuer with value it at the OMV.
    The lender's valuer will value it at the open market value or the purchase price, whichever is the lower.
    The valuer will ask you, the estate agent, the developer etc what the purchase price is. You should not lie to him. The lender will know what the purchase price is if you have applied for a mortgage of 75% of £70K.
    You can read about valuers >>> Do some valuers deserve a kick in the comparables?
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    Thanks for your lighting reply Vanessa your a star.
    Assuming the property needs work and the private valuer values it at say 80k [comps of nicer properties 100k] the lenders valuer will value it at the pp of 70k or the omv as in this case 80k [in its condition].
    Is that right?
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    Hi Rich,
    Thanks for your reply.
    As you can gather im new and just reading and trying to ask questions to get an understanding.
    What is the best way to know your area inside out?

    Richard Greenland said:
    Why would you pay good money for a private valuation? You can do a far better job yourself if you study the comps, and especially if you know your own area well. All a RICS will do is take a minimum of 3 comps and extrapolate present values allowing for changes over time, condition and other variables. It's an inexact science at the best of times, and something you can easily do yourself. What you will get is a range of possible values, there is no such thing as an exact value on any property as all are unique and all buyers are unique too!
    Ask Nick Parkin. He had two separate valuations on two very similar properties within a few months of each other, but one came in at just 60% of the other! Yes it is eminently possible to influence valuations, I've done it myself, its just a case of being polite and feeding the surveyor the data you want them to see. If you want to refi you'd be daft not to.
    ---------------------------------------------------------
    ALTERATIONS, IMPROVEMENTS & MAINTENANCE IN BRISTOL & THE S.W.
    https://www.absolutely-brilliant-properties.co.uk/ 07773047223.
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    The lender will value it at the purchase price of £70K because that is the lower value.
    If you ask, the valuer may give you an indication of what it might be worth after refurbishment. However, I find them generally quite cagey and some get ansty if you try and chat to them. They just want to get on with their job.
    Some like to be supplied with comparables, but others get suspicious or think you are trying to question or influence their judgment. You just have to play it by ear and see what they are like in my experience.
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    Thanks for the input Vanessa and Rich much appreciated.
    What do you think of Hometrack? What's the best way of valueing properties - using a combination of local knowledge and data or the latter and an online valuation tool like Hometrack ?
    Thanks
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    Hi Vanessa,
    As you said the private valuer will value at the OMV, What happens with a private valuer when the property you want to purchase is on with the estate agent at 85k because the vendor has reduced the price but the Market value is 100k what will the private valuer value this property at, 85k or the Market value of 100k as this is  the real value?
    If it's 85k how do you get around that to know it's worth ie 100k-take the boards and property off rightmove?
    In the same situation what would happen with a valuer on behalf of the bank?Fernando Duzaza said:
    Thanks for the input Vanessa and Rich much appreciated.
    What do you think of Hometrack? What's the best way of valueing properties - using a combination of local knowledge and data or the latter and an online valuation tool like Hometrack ?
    Thanks
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    Fernando,
    Value is subjective ie a property is only worth what a buyer is prepared to pay. It may well be that an EA advertised property advertised at 85k will sell for 100k, I remember that many areas of Sheffield for one a few years ago always used to complete at a higher price than the original asking price, no doubt there are other areas around the country that either have or do experience this situation.
    The key is to get to know your local market, some tips.
    1. Read the local paper from end to end, not just the property pages. This way you will, over time get to know what is happening in your locality and get a good feel for local commerce, job creation or losses, crime trends, local initiatives, schools & colleges amongst many other things.
    2. If you haven’t already got one, I would recommend a Twitter account (I can help you out with getting started, PM me) connect and engage with local people and businesses, a great way to be sociable and to learn too.
    3. Walk the streets, ask yourself these questions.
    a. Where are all ‘For Sale’ or ‘To Let’ boards?
    b. Spot the ‘nice’ areas, look for tidy gardens, how old are the cars parked outside?
    c. Are the streets clean, well kept?
    4. Finally, look around and engage with local estate agents. Don’t make the mistake of bowling in and telling them that you a Property Investor and want their best deals as you have £’000s to spend. They have heard it all before and won’t entertain you. You will need to engage and build rapport with the EA first of all. Only arrange viewings if you are seriously considering purchasing. Remember, if they feel that you are wasting their time, they won’t give you any!
    Hope this helps.
    Rob
    Property Consultant, Wakefield, West Yorkshire
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