The mortgage valuation: the fee, the visit and a low valuation

Before a lender issues a loan offer, it sends a valuer to the home. The valuer's job is to say what the home is worth, so the lender knows its loan is covered. This guide explains who arranges it, what it costs, how it differs from a survey, and what to do when the figure comes in under your offer.

What the valuation is

A mortgage valuation is a short report, written for the lender, giving the home's market value. A valuer from the lender's panel visits, usually for under an hour, looks at the home inside and out, and compares it with recent sales nearby. The report gives a figure and a few lines on the home.

The lender uses the figure to apply the 90% limit. Under the Central Bank rules, the loan is capped at 90% of the price or the value, whichever is lower. So the valuation can cut the loan. It cannot raise it above 90% of the price.

Who arranges it and what it costs

The lender arranges it after you go sale agreed. You pay for it. The typical fee is €150 to €250 plus VAT, with €185 the usual figure in our costs list. Some lenders refund it when the loan draws down. Ask.

The valuer must be on the lender's panel. Most are chartered surveyors (the SCSI) or auctioneers with a PSRA licence. You do not choose the valuer. See the valuer page for what the role covers.

Valuation against survey

A valuation does not tell you about damp, a leaking roof, old wiring or an extension built without permission. Only a survey does. See the house survey page. The cost of buying guide puts both fees beside the rest.

A worked example

Niamh goes sale agreed at €320,000. She has a €32,000 deposit and approval for a €288,000 loan, which is 90% of the price. The valuer values the home at €300,000.

• 90% of the value is €270,000. That is now the most the lender lends.
• The price is still €320,000. The gap between the price and the loan is €50,000.
• Niamh has €32,000. She is €18,000 short.

Her options are below. The mortgage calculator shows the loan against both the price and the value.

When the valuation comes in low

A low valuation is not the end. It is a negotiation point. You have four options:

1. Go back to the seller. Show the agent the valuation and ask for the price to come down to it. Sellers often move, because the next buyer with a mortgage faces the same valuer's view. Nothing is binding until contracts, so you can still walk away.
2. Pay the gap. If you have the savings, you can pay the difference between 90% of the value and the price yourself. Only do this if you are sure of the price, because you are paying more than the lender thinks the home is worth.
3. Ask for a second valuation. Some lenders allow one if you can show recent sales that support your price. Check the Property Price Register for homes sold nearby in the last few months. There is a second fee.
4. Walk away. Before contracts you lose only the fees paid so far: the valuation and the survey. The booking deposit comes back.

Do not sign contracts until the loan offer matches the price. The solicitor fees guide explains the solicitor's role at that point.

What the valuer looks at

The visit is short because the valuer is answering one question: what would this home sell for today? They look at:

• The size, the number of rooms and the layout.
• The general condition, from the outside and a walk through the rooms.
• The location, the street and what is nearby.
• Recent sales of similar homes nearby on the Property Price Register.
• Anything that would make it hard to sell again: a flat over a shop, a very short lease, a structural problem in plain sight.

The report usually also says whether the home is suitable security for the loan and whether a re-inspection is needed after works. It does not list defects. That is the survey's job.

Why valuations come in low

• The price was bid up above recent sales in a competitive bidding.
• The home needs work the valuer priced in.
• There are few recent sales nearby to compare with, so the valuer is cautious.
• An extension or a conversion is not reflected in the register.

A valuer is not trying to spoil your purchase. They are giving the lender an independent figure. If you think the figure is wrong, evidence of recent sales is the only thing that moves it.

How long it lasts

A valuation has a shelf life. Each lender sets its own, often a few months. If your closing drifts past it, because of a delay on the seller's side or a new build running late, the lender asks for a fresh valuation. That is another fee. Ask the lender how long yours lasts and keep the date in mind. The hidden costs guide counts a second valuation among the costs people forget.

New builds and self-builds

On a new build bought off the plans, the valuer may value from the plans first, then visit when the home is finished. On a self-build, the valuer values the site and the finished home, and visits at each stage before the lender releases the next drawdown. Each visit can carry a fee.

Where this leaves you

Get the survey booked at the same time as the valuation, so you have both reports before contracts. Put the price and the value into the mortgage calculator to see your loan against each. The first-time buyer journey shows where the valuation falls, and get quotes finds a surveyor in your county.