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Renegotiation after valuation,help!
Joyjoy
Posts: 9 Forumite
My husband and I are buying a house in Wollaton, Nottingham. We offered 155K and the survey said the reinstatement value is 136K.
We feel unfair if we buy it on 155K
,could anybody help us? We are first time buyer and no experience.
We feel unfair if we buy it on 155K
,could anybody help us? We are first time buyer and no experience. 0
Comments
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The reinstatement value is not the same as the value of the property.
1. The reinstatement value is used for insurance purposes and includes the cost of demolishing the remnants, taking away the rubbish, and rebuilding in case of total loss...but you've still got the land on which it sits (unless its leasehold)
2. The property value is that which someone else is willing to pay for the property & land if it were to be sold.
The valuation should state both values.
The property value as a guide to the lender on how much to lend you (based on LTV), and the reinstatement value to ensure the property is adequately insured (which the lender will also want)"Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
Sorry if I am stupid, but the report did not mention the property value, only say:the market value was £155000 on Nov., the reinstatement value is 136000.I am confused and also I want to get bargin on it.
Thank you very much!The reinstatement value is not the same as the value of the property.
1. The reinstatement value is used for insurance purposes and includes the cost of demolishing the remnants, taking away the rubbish, and rebuilding in case of total loss...but you've still got the land on which it sits (unless its leasehold)
2. The property value is that which someone else is willing to pay for the property & land if it were to be sold.
The valuation should state both values.
The property value as a guide to the lender on how much to lend you (based on LTV), and the reinstatement value to ensure the property is adequately insured (which the lender will also want)0 -
The report stated that the property had a market value of £155000 at the date of the survey - that's the valuation. So the valuation doesn't give you any reason for renegotiation.
As stated above, the reinstatement value of £136000 is simply for buildings insurance purposes and has no direct relevance to the market value of the property.0 -
The market valuation price is the figure which the survey thought the property was worth on the day he went out to value it
The reinstatement value is what it would cost to rebuild the property should it ever need rebuilding£2 Savers Club #156!
Looking for holiday ideas for 2016. Currently, Isle of Skye in March, Riga in May, Crete in June and Lake District in October. August cruise cancelled, but Baby due September 2016! :j0 -
As both Jayzed & Lisalou1982 said.
Also don't be offput by the valuer only placing a market value on the property of £155k - a valuer rarely, if ever, puts a market value on the property greater than the already agreed purchase price. Doing so would only expose the valuer to unnecessary risk."Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
So it means should be ok to buy the house on £155k, but somebody told me, if bank to buy the house, they will only pay £136k, means bank will only lend this amout to us to buy this property. Is it right? Thank you again for every one helps me!0
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Who told you that?
Banks don't usually buy houses.
LTV is based on market value. Insurance is based on reinstatement value"Now to trolling as a concept. .... Personally, I've always found it a little sad that people choose to spend such a large proportion of their lives in this way but they do, and we have to deal with it." - MSE Forum Manager 6th July 20100 -
So it means should be ok to buy the house on £155k, but somebody told me, if bank to buy the house, they will only pay £136k, means bank will only lend this amout to us to buy this property. Is it right? Thank you again for every one helps me!
No, £136k is the amount it would take to rebuild the house if it was detroyed. Nothing to with the bank buying the house back - they don't buy them back from you normally anyway.
It is for insurance purposes - you will need insurance to cover the cost of rebuilding the house - and £136k is how much the surveyor thinks it will cost.
£155k is how much the surveyor thinks the house is worth in today's market - so if you need a mortgage - that is the valuation of the house for mortgage purposes.
The two figures are not related - you can't negotiate lower because the rebuild cost (£136k) is lower than the actual house valuation (£155k).
All surveys will have both figures on.0 -
Thank you every one, here is real a good place! I am clear now!0
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