Remortgage and revaluation

[Lesgrandepotato]

We are finally approaching being remortgageable with our project. With this in mind we’ll need a valuation figure. 

As I understand it, this is the value of the property on the day of the visit. 

We have a broadly complete house, but we are missing skirting, architrave, ovens, floor coverings and landscaping. 

For arguments sake let’s say the value of the property turn key and ready to go would be say 700k. What sort of a mark down should I be expecting for the current state of affairs? 10k? 50k? 100k? 

[Mr Punter]

Does it have building regs and a structural warranty?  If so, reasonable cost to complete plus 25%, if not 100k.

[MikeGrahamT21]

If this is in the UK, you may find that no one actually visits. We've just remortgaged, and it was done using some automated system, i was expecting someone coming out but no one ever arrived. They give very low valuations, which aren't correct for the property, so don't expect it coming back to what it actually worth. Ours is £140k, valued using automated system at £116k

[PeterW]

3 hours ago, MikeGrahamT21 said:

If this is in the UK, you may find that no one actually visits. We've just remortgaged, and it was done using some automated system, i was expecting someone coming out but no one ever arrived. They give very low valuations, which aren't correct for the property, so don't expect it coming back to what it actually worth. Ours is £140k, valued using automated system at £116k

 

Not unusual for them to use google earth and street view to do valuations. I had one a while back where the front looked “ordinary” but the back was a full double height extension and basically looked like a different house. Valuation came back at £25k more than it’s value 5 years previous, and this was a £100k extension ..! Customer went back and complained and valuation company admitted they had literally “driven by”...... and that is what you get for a £175 valuation “fee”..!!

 

I would nearly insist they come out and look especially if you have done extensive internal work. Our interim valuations are being done by a really good surveyor from a “proper” company who have already increased the values due to the change of layouts internally from the original estimates. 

[AliG]

There is no set standard for how to value a house and the more unusual a house is the more difficult it becomes.

 

Normally an automated system will take the area of the house and price it to the local price per square foot.

 

We just sold our house in Scotland where the seller gets the valuation survey. The valuer didn't care that we had a new kitchen etc versus another house that recently sold in the street. He pretty much insisted that the value was driven by size and nothing else.

 

If the house is being built to a much higher spec than those nearby you will again struggle to get it correctly valued.

 

Reasonably to value an unfinished house you need to take the finished value less costs to get there as a starting point. However, it becomes like a fixer upper and would likely be valued at a material discount to this, I would say around 10% off the net value as the market for such a property is considerably restricted relative to a finished house. The way a lender thinks is how much money could they easily realise if they had to repossess the house and sell it. The discount would depend on how much work needs to be done.

 

You can obviously ask that someone visits, but a lot of lenders will not care and have a take it or leave it attitude.

 

 

[Ferdinand]

There can be value in preparing a concise brief for the valuer (depending on how personal the service is), highlighting what you have done and perhaps a couple of local comparables closer to your type of changes than more obvious local comparables.

 

This thread - though aimed at LLs - may have some relevant tips.

https://www.property118.com/low-re-valuation-refurb-project/

 

Also, it is a black art and +/-10% is probably not unusual. Extracted from the thread above (TMW = The Mortgage Works):

 

Quote

 

(Mark Alexander):

"

My brother recently had a strange issue after building two bungalows on the same street. In both cases TMW happened to be the mortgage lenders.

The bungalows were not identical, one was bigger than the other and had a much bigger garden too. The spec was otherwise very similar. However, TMW instructed two separate valuation companies and the smaller bungalow valued at £25,000 higher than the bigger one - the mind boggles!

What this proves is that valuation appraisals are an art, not a science."

 

 

Edited November 14, 2017 by Ferdinand

[Lesgrandepotato]

All a bit of an anticlimax. Fella turned up, had a good nose and a brew. Gave a valuation 10k short of doubling the value. That’ll do!