Hit for an unexpected second valuation bill

gebbel

We went sale agreed on a house in late April. Had the property valued as is part of the mortgage application process and paid the valuer his fee. There was bank involvement in the sale so we expected delays getting everything sorted. Eventually signed contracts last week. But today I get a call from the valuer telling me I owe him another €60 "due to new central bank rules that requires a re-valuation after three months where the legal title has not been transferred". So he must re-submit the valuation. He didn't appreciate my frustration either as I explained to him that the delay wasn't our fault.

I won't fall out with him over €60 but I'm asking here for clarification on what's going on.....thanks.

MarkAnthony

Happens - not heard of 3 months though.

I ended up paying for multiple valuations

Grolschevik

I read recently that if there's more than three months between mortgage approval and drawdown, a revaluation is required under new rules.

I'll dig out the details tomorrow.

yesap

This isn't a valuer or bank condition, as part of the new Central Bank rules on LTV's etc they also added threw into the legislation that a valuation can be no older than 2 months at point of drawdown.... They really didn't think that piece through in my opinion as 8 weeks is very restrictive from sanctioning of a loan. Burden then falls on the customer

meme74

Under new ECB rules the valuation expires after 2 months. Very unrealistic timeframe given the amount of time required to process a sale in ireland. This happened to me when buying my house but our bank provided us with a form that the valuer just had to fill out and Tick afew boxes basically to say they believe the valuation hasn't changed. See if you're bank will accept this. The valuer should not charge you for this, it was a one page form with roughly 5 questions/boxes to tick

seamus

meme74 wrote: »

Under new ECB rules the valuation expires after 2 months. Very unrealistic timeframe given the amount of time required to process a sale in ireland. This happened to me when buying my house but our bank provided us with a form that the valuer just had to fill out and Tick afew boxes basically to say they believe the valuation hasn't changed. See if you're bank will accept this. The valuer should not charge you for this, it was a one page form with roughly 5 questions/boxes to tick

Strictly speaking the valuer should attend the property (even if it's just a drive-by) to make sure that it hasn't burned down or collapsed in the intervening two months. Could you imagine signing off on a property and then finding out that it doesn't actually exist anymore.

Sounds like craziness, but that's where the reduced valuation charge comes from.

yesap

Meme74, these are not ECB rules, brought in by our own Irish Central Bank and enacted to legislation back in Feb. the rules state a new valuation is required so itf your bank accepted a quick checklist you got lucky, as the new rules pan out I would expect banks insist on new valuations given the wording of the rules. As I said, very silly as deals do not move from initial valuation to funds release in 8 weeks but that is what the CB went with.

Grolschevik

Here we go:

From the Law Society's Conveyancing Committee:

http://www.lawsociety.ie/Documents/Gazette/Gazette%202015/aug-sept2015.pdf#page=52

“Under clause 7(3) [of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48) (Housing Loan Requirements) Regulations 2015], a lender … is required to carry out a market valuation of the residential property on which the loan is to be secured not earlier than a period of two months before the date on which the advance under the housing loan is made.

“Given the timelines in conveyancing transactions, in many cases lenders will now have to obtain a second valuation of the property prior to drawdown. This has potentially serious consequences for a purchaser who has entered into a binding contract on the strength of the original loan approval. If a revaluation resulted in a reduction in the loan, the purchaser may not have sufficient funds to complete the contract, resulting in loss of deposit and the possibility of an action for specific performance and/or damages for breach of contract.”

http://www.irishstatutebook.ie/eli/2015/si/47/made/en/print

meme74

.

meme74

yesap wrote: »

Meme74, these are not ECB rules, brought in by our own Irish Central Bank and enacted to legislation back in Feb. the rules state a new valuation is required so itf your bank accepted a quick checklist you got lucky, as the new rules pan out I would expect banks insist on new valuations given the wording of the rules. As I said, very silly as deals do not move from initial valuation to funds release in 8 weeks but that is what the CB went with.

If one of the major banks advised me that this is what needed to be done (the form was sent to me by the bank) then there is no reason why OPs bank would not be the same. The central bank rules are illogical given the time frame and my bank thankfully had a logical approach to the situation. You can quote the legislation all you like but I am not a one off where this was accepted for me alone. It's a common issue and a common solution depending on how far off the 2 months your drawdown is. Our sale closed just a month ago so this did not happen in the very early days of this new rule.