What is a down valuation? I The Property Fox
Posted on 18th January 2023
What You Need to Know About Down Valuations on Your Property
Down valuations on your property can be a scary thing.
If you're not familiar with the term, down valuation is when the mortgage company doesn't believe that the property is worth as much as the buyer has agreed to pay for it.
This can lead to all sorts of problems, such as the buyer having to come up with more money for the purchase or even losing the property altogether.
In this blog post, we will discuss down valuations and nil valuations in detail and explain what you need to do if either of these happen to you.
1.What is a down valuation on your property?
A down valuation on your property is a process wherein the worth of the property is evaluated and determined to be lower than previously anticipated.
This can be due to changing market values, changes to local infrastructure that affects the appeal of the community, or property condition assessments that call into questions things like potential repairs needed.
This determines what can reasonably be asked in a sale, by both sellers and lenders.
It’s important for buyers and sellers to take into account current market values when negotiating prices or signing contracts, as appraisals can lead to undesirable surprises later down the line.
With a fair and accurate evaluation made during a down valuation, all parties can make informed decisions about the current worth of their properties.
2.Why would a down valuation happen on a property?
When buying a property, it is important to be aware of the possibility of becoming the victim of a down valuation.
This occurs when a survey or appraises the property for less than the amount paid for or requested for it, which could have an impact on the loan amount available and how much equity will be left in the property.
Down valuations are more common during recessionary periods or when there is potential unrest in certain areas due to heightened risk with regards to security.
Property prices also may decrease due to repair costs that may be needed as a result of being worn out by too much exposure to elements or poor quality construction. Such problems could all negatively affect the value of a house, so it’s essential that any financial decision is made cautiously and with great thought.
3.How to avoid down valuations or nil valuations on a property?
One of the surest ways to prevent a down valuation or nil valuation on their property is to understand the market prices in their area.
By researching existing properties and its specifications, homeowners can determine what factors help boost the value of a house, such as a modern kitchen or additional room.
Furthermore, when housing prices are decreasing, people can consider reducing the sale price of their home or deferring the sale until there is an upturn in demand in their area.
Finally, homeowners should also keep up reputable home maintenance including regular painting, landscaping and more in order to ensure that their home retains good condition and appeal on sale day.
With these simple steps, homeowners can take back control over down valuations and enjoy successful property sales.
4.What to do if your house, or one you are buying, gets down valued at survey?
It's no secret that the property market has been volatile in recent years, and this can sometimes lead to having your house down valued at survey.
If this happens to you or one you are purchasing, the best approach is usually to have an open and honest conversation with the lender.
They may be able to offer reassurance on their lending policy and may even raise the agreed mortgage up to the original value of the property provided that certain criteria is met.
Consider seeking independent advice from a qualified chartered surveyor too; they should be able to assess whether there are any issues which need addressing before proceeding.
Additionally, if time allows, doing some extra research into your local area will give you much more confidence when discussing with lenders or agents, as it will help strengthen your understanding of current trends in house prices and perhaps any disruptive activities in the local vicinity.
Taking all these steps together should ensure you make an informed decision about how proceed.
A down valuation on your property can be a stressful and frustrating experience, but by understanding the reasons why they happen and taking steps to avoid them, you can minimise the impact on your home sale.
If you do get a down valuation, remember that it is just one person's opinion and there are options available to help you still sell your home for the price you want.
With some careful planning and preparation, you can make sure that a down valuation doesn't derail your home selling goals.
For any further advice or information please contact us.
WANT TO FIND OUT MORE?
Brilliant, we will be more than happy to speak with you and see how we can help further.
Contact us on one of the methods with any queries that you may have, or use our contact form and we will be back in touch very soon!
Please fill in the form below and a member of our team will contact you shortly
Tagged as: Thinking about selling?
Share this post: