What To Do If Your House Is ‘Down Valued’ In 2023?

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Obtaining a mortgage can be quite a challenge, and often it comes with one key step. Mortgage lenders work with a surveyor to establish the price of the property that the buyer is paying. This step isn’t a complicated one, but it can be incredibly stressful both for the buyer and the seller because if the property is worth less than the agreed-upon price, the lender will down value it, and that may create some real issues for everyone involved.

A Quick Example in Practice

Down valuations work like this. Imagine that you market your home for £250,000. The buyer makes an offer for £245,000, and you take it. After the mortgage survey, however, your home is valued at just £230,000. If that’s the case, the bank won’t lend £245,000 on the home, which means that both the buyer and the seller have some real issues.

What’s Even Considered in a Mortgage Valuation?

While there are many different kinds of valuation you can have done on your property, a mortgage valuation is maybe the most basic type. It essentially just gives the lender a closer look at whether or not a given property is worth the price the buyer is paying. A few different things are taken into consideration during this process. The first one is the condition of the property. The valuator will look at whether there is dampness or subsidence or a different serious issue that could affect the value of the property down the road. In addition to the property itself, the valuator will look at whether the sale price of similar properties in the area matches your sale price of yours. Finally, the valuator will consider what the current market conditions look like.

If You Are Notified of a Down Valuation

In the event that you’ve been notified your property has been down valued, you don’t have a lot of options left in the current contract. You can drop the asking price, but that could impact your own finances. You could also remarket the property and find a new buyer. If you do, however, keep in mind that you run the risk of a down valuation in the future with a different buyer. It may also mean your home spends many more weeks on the market, and that could impact your prospects if you’re looking to buy another home. It is possible that the buyer could apply for a different mortgage with another lender, but that’s not always going to be an option for every buyer. If you truly believe that your property is worth the asking price, you may simply have to forge ahead and look for another buyer. Along the way, you could address any small issues the valuation found with your property to help offset the problem in the long run. You could also search specifically for cash buyers so you won’t have to face the problem of working with a mortgage company again.

Will My House Lose Value in 2023?

If you’re asking yourself “Will house values drop in 2023,” you’re not alone. A 2023 report from The Times found that down valuations are actually increasing because interest rates have risen ten consecutive times since December of 2021. At that point, they were at 0.1%. Now, however, they sit at a solid 4%, and lenders are becoming more cautious than ever. The report further found that nearly 400,000 properties were down valued last year, and that has affected many buyers and sellers alike. On average, the down value amount was up to £10,000.

It’s hard to tell whether your home will be down valued in 2023, but one thing is certain, the market is becoming a more cautious place than ever.

If you need to sell your house quickly, and you’re in a situation where your home has been down valued, your best bet may be to work with a cash investment company. While you won’t get the full market value you initially asked for, you will get up to 80% of your home’s value, and you’ll get that money within just a few weeks, allowing you to move forward with your own plans quickly.

Having your home down valued certainly isn’t the best outcome, but there are many options if you find yourself in that situation.

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