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    • DesWalker
    • By DesWalker 12th Oct 17, 4:35 PM
    • 7Posts
    • 2Thanks
    DesWalker
    Surveyor undervaluation has lost us a sale
    • #1
    • 12th Oct 17, 4:35 PM
    Surveyor undervaluation has lost us a sale 12th Oct 17 at 4:35 PM
    Hi All,

    We live on a private estate of twenty properties. It is a unique estate set in beautiful private grounds. All properties were originally bought from the builder in the first half of 2003 and the prices paid for all twenty properties are available on Rightmove.

    In the last year three estate properties have been sold for prices of 130%, 134% and 139% of their 2003 values. So a fairly consistent pattern on which to value other properties on the estate including our property. This is really the only way of valuing these properties as there is absolutely nothing else comparable for miles and miles. It is a pretty unique setting.

    Based on the above analysis we put our property on the market for 137% of the 2003 price and got a full asking price offer. We then negotiated a delayed completion to avoid going into rented and reduced the sale price to 135% of the 2003 price as a gesture of goodwill to the buyer.

    The mortgage company of the buyer had a home buyers report and valuation and it never entered out head that the property was mispriced as the above analysis shows.

    A young surveyor came from outside the area and seemed to take absolutely no account of the unique setting. He produced a valuation of 114% of the 2003 price (equals £245k equals £45k less than the agreed £290k purchase price) and the buyer has walked away. We are very very upset.

    I firmly believe he has valued it based on houses with the same number of bedrooms, bathrooms, house type etc within a particular radius of us but has completely ignored the unique estate we are on.

    I sent the three examples of property sales which share our unique environment (detailed above) to the buyer as evidence of the mispricing and proof that he had in fact agreed a fair price but the damage had been done. Remember this buyer was happy to pay £295k without a second viewing but got spooked when the valuation came in at £245k.

    So, my question. Is there anything I can do ? Can I complain to somebody ? How can it be right that a young man like this can put us into so much turmoil without being accountable ? My wife is in bits as our future is on hold. Please help.

    And please, no answers from the “your house is clearly overvalued brigade”. My sale price was bang in line with the three properties sold in the last year one of which (the 134% one) is attached to me next door !! Their’s is worth 134% of the 2003 price but ours is only worth 114% !! And to rub salt into the wound, next door was a wreck whereas our house is immaculate.

    Any help very greatly appreciated.

    Des
    Last edited by DesWalker; 12-10-2017 at 4:43 PM.
Page 2
    • mrginge
    • By mrginge 12th Oct 17, 6:13 PM
    • 4,202 Posts
    • 7,473 Thanks
    mrginge
    Next time insist that the surveyor is an old woman
    • Natbag
    • By Natbag 12th Oct 17, 6:22 PM
    • 1,121 Posts
    • 747 Thanks
    Natbag
    If you haven't already, you can ask your EA to contact the surveyor to see if they will allow you to appeal/negotiate. They don't have to do this, and probably won't, but it might be worth a shot.
    Otherwise, there's very little you can do. Just get it back on the market and stay positive for a better result next time, or even better, a cash buyer!
    • eddddy
    • By eddddy 12th Oct 17, 6:27 PM
    • 5,280 Posts
    • 4,916 Thanks
    eddddy
    I recently had a similar issue. The bank's valuer down-valued by 30%.

    The EA that was selling the property was an RICS regulated firm. Their Senior Partner was an MRICS and an RICS registered valuer (probably far more experienced the the bank's valuer).

    The senior partner provided a mountain of evidence to support the buyer's appeal to the bank. But the appeal was still turned down.

    The best advice the EA could give was that they would refuse access to that valuation firm, in relation to any future buyer - and insist that the valuation was done by a different firm.

    (I dunno if that strategy would actually work.)
    • Thrugelmir
    • By Thrugelmir 12th Oct 17, 6:45 PM
    • 55,548 Posts
    • 48,899 Thanks
    Thrugelmir

    For clarification, the 139% sale was in July, the 134% (next door) was in March and the 130% was last October, so there is actually an upward trajectory.

    .
    Originally posted by DesWalker
    How long were they on the maket for before being sold?

    The slow rate of increase suggests demand isn't great in the area. The surveyor is working for the lender not the borrower. The lenders money is at risk. They are the ones looking at the security the property offers.

    Nor are all properties the same. Condition comes into play. Refurbishment can make a difference to values. Being similar is a red herring.
    "Wide diversification is only required when investors do not understand what they are doing." - Warren Buffett
    • lincroft1710
    • By lincroft1710 12th Oct 17, 7:10 PM
    • 9,738 Posts
    • 7,761 Thanks
    lincroft1710

    I have a maths PhD so you can be sure that what I am saying is true.
    Originally posted by DesWalker
    Valuation is an art not a science.
    • chappers
    • By chappers 12th Oct 17, 8:46 PM
    • 2,708 Posts
    • 1,532 Thanks
    chappers
    If you haven't already, you can ask your EA to contact the surveyor to see if they will allow you to appeal/negotiate. They don't have to do this, and probably won't, but it might be worth a shot.
    !
    Originally posted by Natbag
    Problem is the buyer probably thinks they have got off lightly, if they really wanted the place they would have pursued these options themselves.
    • societys child
    • By societys child 12th Oct 17, 9:21 PM
    • 4,675 Posts
    • 5,044 Thanks
    societys child
    I once had a serious undervaluation and funnily enough the surveyor was from over a hundred miles away.
    The buyer had to pull out, but I had another who had asked me to contact him if anything went wrong.
    We agreed a sale at the asking price a few days later.

    So that was three local estate agents, two wannabe buyers, myself, and the second buyers mortgage surveyor all in agreement about the asking price.

    I sometimes wonder about some of these surveyors.

    • do163600
    • By do163600 12th Oct 17, 9:23 PM
    • 5 Posts
    • 4 Thanks
    do163600
    As a seller, there's not much you can do if the buyer has been spooked by the valuation.

    A couple of years ago, I was buying a BTL property and the bank's surveyor undervalued it. I spoke to him on the phone and asked how he had arrived at the valuation. He replied that there were five similar properties in the same street which had sold in the previous 18 months, and he had based the valuation on them.

    I pointed out a number of significant differences between these properties - having previously viewed all of them, and even bought one of them - and he agreed to up the valuation to the agreed sale price.
    • chappers
    • By chappers 12th Oct 17, 10:33 PM
    • 2,708 Posts
    • 1,532 Thanks
    chappers
    That's the problem with residential deals, there is no legal obligation to get the figure right. The surveyor just acts for the lender.
    In a commercial deal it's a different matter the borrower is the client and the valuation is to satisfy the lender and many other commercial factors might depend on that valuation, factors with quantifiable loss, and where there's quantifiable loss there's a lawsuit not far behind
    • Fiesto88
    • By Fiesto88 12th Oct 17, 10:59 PM
    • 99 Posts
    • 65 Thanks
    Fiesto88
    The house we’re buying divided opinion in the two valuations done in the course of the purchase.

    Mortgage valuer visited and appreciated the quirks it has. They gave it a very favourable writeup in their comments and matched the purchase price.

    The guy who did our more detailed survey insisted on offering his opinion of the market value - despite us making it clear that wasn’t needed or wanted - and he valued it 30k lower. This wasn’t because he’d identified any issues or repairs, just that in his opinion the purchase price was too high.

    It’s just the way the cookie crumbles. It’s not an exact science and there’s no right answer and all sorts of preferences and bias come into the decision making process. It’s no different to fact that one mortgage underwriter might decline the same application that the underwriter next to them would approve. In any job involving judgement there isn’t one correct answer.
    • ScorpiondeRooftrouser
    • By ScorpiondeRooftrouser 12th Oct 17, 11:08 PM
    • 1,962 Posts
    • 2,915 Thanks
    ScorpiondeRooftrouser
    Comms,

    Thanks for checking the inflation rates.

    Yes we live in a deeply unfashionable part of the country but in a beautiful setting that elsewhere in the country would have skyrocketed.

    The numbers are completely accurate. I have a maths PhD so you can be sure that what I am saying is true. We bought in mid 2003 for 215k, asked 295k, received an offer of that price, chose to delay completion for four months so reduced the agreed price to 290k. The valuation came in at 245k, just 30k more than we paid for it !! Gobsmacked and very distressed ...
    Originally posted by DesWalker

    I find it odd that anyone mathematical would make an appeal to authority over simple artihmetic.
    • kinger101
    • By kinger101 12th Oct 17, 11:15 PM
    • 3,884 Posts
    • 5,303 Thanks
    kinger101
    You're welcome


    - sometimes you don't like what you hear, but it's still right.
    Originally posted by Comms69
    But you've not really added anything constructive. You've only offered an opinion, which cannot be demonstrated to be "right".
    • kinger101
    • By kinger101 12th Oct 17, 11:16 PM
    • 3,884 Posts
    • 5,303 Thanks
    kinger101
    Were the buyers using a high LTV mortgage? It's possible a surveyor might be more conservative if this was the case. As others have suggested, it seems you've probably lost this buyer for good.
    • EachPenny
    • By EachPenny 12th Oct 17, 11:53 PM
    • 2,466 Posts
    • 4,101 Thanks
    EachPenny
    I wonder whether the "kid" was advised by an older and wiser manager that a house in a "deeply unfashionable part of the country" which has lost value in real terms already, might not be an attractive purchase when the housing bubble bursts.

    And therefore advised not to put a value on it which might cause professional embarrassment if their client finds themselves repossessing a property worth less than the mortgage.

    Of course the surveyor will use their professional experience to value the property now - but as an art not a science, who is in a position to argue with them over something as abstract as the value of a pile of bricks, if a little voice in their head (or a real one) has told them to knock 20% off this one to be on the safe side.

    It is a lot easier to find a reason for undervaluing than it is to justify an over valuation.
    "In the future, everyone will be rich for 15 minutes"
    • Comms69
    • By Comms69 13th Oct 17, 12:40 AM
    • 486 Posts
    • 357 Thanks
    Comms69
    But you've not really added anything constructive. You've only offered an opinion, which cannot be demonstrated to be "right".
    Originally posted by kinger101
    It is right. There’s no alternative, it cannot be wrong.

    The OP has no contract with the surveyor
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