Source: Mortgage Strategy
Publication date: May 4, 2009
Equity release, like any lending, is based on the opinion of professional valuers, backed by comparable evidence of property sales completed in recent times.
But in a market which some say is stagnant, while others talk of freefall, it is difficult to be sure of a property's value. The old adage, "something is worth what someone will pay for it", comes to mind.
Interestingly, this month a valuation came back to the office with a market figure of zero which, as an economist, made me wonder how such a figure could be achieved as the house was substantial and in good condition.
The answer given by the surveyor was that big houses are not selling and therefore they have no value in the short-term.
A remarkable philosophy and I'm pleased to say we made a mortgage offer on the property based on a more realistic but perhaps more artistic view of its true value.
But this episode reminded me that the role of surveyors is as much about the softer side of the valuation as it is about bricks, mortar and insurance replacement calculations.
It also reminded me that we are in the middle of perhaps the deepest recession in recent memory and it is everyone's responsibility to check and re-check assumptions we previously took for granted.
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