What to do if You Get a Downval

When buying a property with a mortgage, or when you are refinancing a property you already own, getting a down-valuation can not only be annoying, it can completely derail your (financial and property) plans. In fact, looked at that way, annoying doesn't come close. Maybe infuriating, or even devastating, would be better descriptions? But is that it? When we get a down-valuation, do we just shrug our shoulders and accept it? Game over. Fatalistically give up? Of course not. Over the last 20 years of investing and buying buy to lets for myself, I've realised there are 3 things we can do when we get a dreaded down-valuation. Number 1, if we are refinancing we can just give up or, if we are buying, we can pull out of the deal. This is very negative and I can only assume this would happen in the most extreme and dire of circumstances. most of the time we are not going to do this, so let's park this ow without further discussion and move on quickly to the next 2 possibilities. Number 2, we can appeal to the lender, along the lines of, "The valuer has got this hopelessly wrong, please get a second opinion". Will this work. Most of the time, sadly, no. When I first started buying for myself one of my first properties was down-valued. I put together a multi page presentation to send to the lender via my mortgage broker (who humoured me) with enough comparables and clever augments to show I knew exactly what I was talking about. After all, I am (was) a Chartered Surveyor, and I'd done hundreds of mortgage valuations. I knew I was right and the valuer was wrong. Of course the bank said, "We've looked at your stuff but we're sticking with our valuers opinion". That is almost certainly going to be the bank's response unless: a) You can show there has been a material mistake around fact - like the valuer valued the property as a 2 bed and not a 3 bed: or b) Your opinion and the valuer's opinion are so far apart, like 50% (all banks have different criteria and views on this so don't take this as a rule) that something strange is happening and they might look into it. Otherwise, usually, an appeal is a waste of time. The bank will want to stand shoulder to shoulder with the valuer. Number 3, you ask your mortgage broker to make an application to a different lender. Why? Because hopefully the new lender will send a new valuer who has no preconceived ideas around the value. Will it definitely be a different valuer? No, but chances are it will be (it would take too long explain this here, perhaps I'll do a different video on this). This will inevitable delay things, and result in more costs but if it's the only way you can move on, it's well worth doing. By the way, if you think that a down-valuation is the worst that can happen, it's not. In the video I tell you about the time a valuer refused to even get out of his car and produce a valuation at! I'll tell you what I did to get around this. So grab a cuppa and put your feet up and enjoy. Here's to Successful Property Investing. Peter Peter Jones (ex) Chartered Surveyor, author and property investor https://www.ThePropertyTeacher.co.uk PS. By the way, I've rewritten and updated my best-selling e-book, The Successful Property Investor's Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same. For more details please go to: https://www.ThePropertyTeacher.co.uk/the-successful-property-investors-strategy-workshop