Mortage - Survey
I'm purchasing a flat and I've just had the survey back, the survey is less than the proposed purchase price of the flat.
Good news for me lol
This is purely a scenario and will be purchasing the flat for the price given by surveyors.
But what if the seller came back and said that the estate agent had valued it higher, could they have submitted the estate agent valuation to up the mortage?
What im asking in a fictional way is why do i need a survey? Are there legal implications?
The Estate Agent valuation is just a ballpark figure that doesn't really count for much.
The main reason the lender requires a "proper" valuation is to satisfy them that the property is worth the amount of the loan you are securing on it. This is to avoid a situation where you agree a purchase price with the seller of say £150k and take out a 90% mortgage of £135k.
You then find yourself unable to pay the mortgage and they reposess the property, and discover that it's only worth £120k. They are £15k down (ignoring the market value fluctuations between buying it and reposession).
If the valuer comes back with something considerably lower than the price you've agreed (in an non-binding, STC way) with the seller, and the seller isn't prepared to accept the price the valuer says it's worth you may find that the lender isn't prepared to provide a mortgage for the higher price.