As of late, there’s much talk around property and the huge disparities between property valuations.
Due to a quite large number of reasons – among which, inaccurate market research – more and more people find themselves in a predicament that nobody would ever want to be in: their property has been evaluated low.
Those who are preparing to buy their own houses might not have even heard about this, so if you fall into this category, this brief synopsis will come in very handy.
Let’s imagine for a second that you’ve bought a house for a certain price and that you’ve been helped out in your endeavour by a mortgage, like so many people these days are.
However, after the evaluation of the surveyors, they’ve reached the conclusion that the house that you’ve bought did not warrant that price. In other words, you’ve paid too much.
In this case, the lender might offer you a loan that would cover a certain percentage out of the lower price, the price that the surveyors estimated that the house was worth. Consequently, you’ll either have to pay more straight out of your pocket (which is most assuredly empty at this point) or pull out of the deal.
If you decide to take out the loan regardless of this unexpected turn that the events took, you’ll possibly be charged a higher interest rate, so you won’t lose only a good portion of your money, but also affordable interest rates.
A down-valuation is utterly tragic when you’ve already injected some good money into making that home even better because it will leave you with a hole in your budget that you’d have trouble covering up.
Down-valuations can be disheartening, but if it happens to you, you are not completely helpless. Basically, you can make three choices, depending on the severity of the issue. The first one is applying for the mortgage with a different lender that offers better terms and interest rates. The second one, which works only if you haven’t managed to buy the property, is to ask the seller of the said property to lower the price he/she sells it for. This will deaden the impact of the down-valuation on your finances.
The third thing you can do to cope with this most unfortunate evaluation is to actually ask for another evaluation, this time by another company. If you have sufficient evidence that the first surveyor was wrong, the lender will accept your appeal.
The same thing goes for when the surveyor is masquerading as a professional one when his/her reputation isn’t in the least positive.
Keep in mind that sometimes down-valuations can be the product of error or recklessness. You shouldn’t grow anxious instantaneously. Ask for the report in order to see how accurate it is.
If everything seems fine, you still have 2 options to try out. Another piece of advice you should implement is hiring professional surveyors that have the necessary skills to challenge the previous evaluation on good grounds.