Flat valued at a lower price than offer price!

AndrewSmith

You need firstly to establish if the figure quoted in the valuation is :

1) Property Value for Mortgage Purposes

or

2) Property Value for insurance rebuild costs.

The second will always be approximately 20-50% lower than the Market Value.

As mortgage valuations are carried out by surveyors who obtain the 'value' from getting comparable property evidence from local estate agents, I would seriously question the estate agent you are buying through if the property has been marketed at significantly higher than the opinion of other local estate agents. Many people do not accept that this is how surveyors get the value of a property but trust me, it's true. It also begs the question, does it not, of what is the 'real' value of a property. I think this was summed up in a previous post. The value of anything is what someone is prepared to pay.

It may also not be the fault of the agent. When I worked in an estate agents in Reading we were marketing a couple of 2 bed apartments. We had 2 cash investors (as a mortgage broker this hurt me lol ) who wanted to purchase both as a buy to let opportunity. They bid against each other and the final sale price was actually higher than the price the properties were being initially marketed at. Being cash they did not get a mortgage valuation. Great for the owner and the agent's commission.

However this did cause problems for local agents in the following months as everyone who wanted to sell in that particular development after that wanted to sell at the price the other two had sold for, which was well above the current market value. It is down to the vendor of the property in some respects what the property is advertised for. We knew that any mortgage valuation carried out on these apartments would not 'stack up' to the higher price but with insistant owners we had no choice but to market them.

Sure enough approximately 80% of those apartments were downvalued for mortgage purposes when valuations were carried out.

I would go and speak to the agent (the actual person who took the property onto the market if possible) and ask to see how he came up with the value. If he can provide comparable evidence to support his market value you may (but not always) have a justfied case to appeal against the mortgage companies valuation. I have seen this done successfully a few times, however it is the acception rather than the rule.

My point is don't always blame the Agent.

Hope this helps

Andy

fatblokexl

i have just posted a similar topic, can someone with the power please merge these?

cuffie

Sorry to bump this thread, but I would be interested to see the other thread regarding this - could someone please post?? We have just had homebuyers report back and had house undervalued, but we really really like the house - its not really structural problems, more that the surveyor worried about the re-sale value. Survey also pointed out that some of the windows need replacing and property in need of decoration, but as we offered under the asking price and it was accepted (97%), we don't feel that the vendor would budge any more on price. If we mentioned this undervaluation we are worried he will pull the plug! (and we really want the house!). What would you do?

AMILLIONDOLLARS

Go onto a website call www.upmystreet.co.uk register and find out how much property in your area has sold for in the past six months. This should give you some indication on price actually achieved. You need the postcode of the property you can buying.

Hope this helps!

Good Luck
AMD

cuffie

Its very hard to value - there aren't many other properties in this style or with the sort of land it has in the area, and I think that's why the surveyor had problems putting a value on it. I suppose if we are willing to pay what we offered (which is below the original asking price), then we should just go for it. We knew the windows needed doing, and the redecoration. We don't want to naff off the vendor, so I reckon we'll leave it. We will be staying for a while I think... I will worry about the resale value at the time we come to re-sell!

I'm interested in the other thread that is on the same subject, just to see what the response was there.

loveandlight

Having a property undervalued has happened to me TWICE this year and both were undervalued by massive amounts . Once on a 4 bed house I was buying 6 months ago and again last week on the apartment I am currently living in.

The 4 bed house I was in the process of buying was undervalued by £40,000 :eek: by my OWN surveyor who I'd instructed separately from my building society. Luckily I got my survey report before I'd instructed the building society.

Everyone I spoke to said to get the vendors to drop their price. However the vendors wouldn't negotiate a reduction in price at all and I was left very confused as to what to do next for the best.

The vendors agents immediately put the house back on the market and you know what? four weeks later it sold again for the same price that had been agreed with me. The sale to the other buyers went through smoothly and they had no problems with their surveyor who valued it for the agreed sale price!!!

The only person who lost out was me because I'd paid £350 for that survey and it left me looking a bit of a fool as if I'd been trying to get it 'on the cheap'.:mad:

As for my apartment, just last week it was undervalued by £50,000 :eek: by the surveyor acting on a re-mortgage I was doing. He only spent 8 mins in my home and even then he didn't even bother coming in to the living room!! The valuation he has given, is despite the comparables showing that it is worth more than the figure the surveyor has put on it and the crazy thing is, if the surveyors valuation is to be believed, then it means my next door neighbours apartment (who has also just had his valued) is worth more than mine, even though I have two bathrooms and my neighbour has one and my neighbours apartment is very dated and tired looking, whereas mine has been fully done up to a luxury standard with brand new everything.

I also have FOUR estate agent valuations confirming that my flat is worth more than what the surveyor says.

I started off this year confused and nine months later, I'm still

pigeonpie

In a similar situation L and L and it doesn't make for a good night's sleep does it!

Valuer sent by mortgage lender spent 10 mins here and then didn't value what we are buying, which is a flat with planning permission for a roof garden.
He came back with a price on just the flat. We aren't buying it if no pp, so it's useless. As it's a private sale, we don't even have an estate agent's valuation. (maybe should try to get one, but they aren't neutral as 1. if we buy, no commission and 2. if we don't buy, they'll get the property to sell!!)
We have complained as £500 lighter in the wallet. We rang the valuers chosen by our mortgage lender to say btw the bloke has got to climb out of a window to check the intended roof garden space. It's the crucial element in the price. He refused (smart clothes might get dirty we suppose) and now says he could never have valued something hypothetical anyway, which is total cr*p as he didn't say this before taking our money, or while he was here but only says this now. There are plans too but he never asked for them.

When he was here I pleaded with him to go outside and I'd explain how it would look, the size etc but nope, he just peered through the dirty window and said he could see all he needed to from there.
Well he was right about that as he didn't value it at all, despite it being the basis of our offer.

We are really upset and climbing the walls with stress about it. The valuation btw for flat as is came in as £30k below what the owner claims he paid and it is worth. It seems to be based on the value of 3 similar flats for sale next door. However they have huge issues with a fraudulent freeholder and keep falling through, so it's hard to use the valuation against the owner (although we do think our offer is at least £15 if not £20k too much, don't think he will take less).

Are there any independent valuers and what do they cost (london sadly)?
Interesting that someone posted that they undervalue to protect their investment; in this case we are not borrowing more than 1/3 of the price. We feel that he'd have been more thorough if we'd been borrowing more.
Who is it best to get a property valued by in the buyer's interest as we all seem to be having a similar problem with the valuers?

We used someone nominated by the mortgage lenders from a renowned co.
pah.

Mark_petty

Before people say you are being ripped off etc please have a read of this:
http://forums.moneysavingexpert.com/showthread.html?t=260812

Basically I paid a surveyor to value my flat he valued it at £173k another flat in the block is up for £170k & now £169k. Down our road there are other flats up for £200k +
Ours have been valued less due to being shared ownership properties but the most expensive in the block due to top floor with loft.
The people buying ours got the mortgage surveyor round he valued it at £160k, £13k undervalued.
I said to the buyers you either get another lender or we will get a new buyer (as we had 3 people wanting the flat due to shared ownership)
They got a new lender, surveyor came round and valued it £173k.

So no I wasn't trying to ripp anyone off i'm trying to sell my place for the going rate that it was valued at

RHemmings

NonothingFTB wrote:

Thanks for the response. I was shocked to find that the estate agents had valued the flat significantly higher that it is actually worth!

You need to do more research!!!!!!

KathrynPenguin

I bought my house in 1997. I offered 59995 (asking price) as did 2 other people (I've met one of them so it wasn't the estate agents trying it on). Nobody would offer more as that was the stamp duty threshold. Vendors went with me as I was FTB. Building soc valuation came back at 55000. After some negotiation we split the difference and I paid 57750.

Who was right? Well nowdays in Essex you couldn't buy a rabbit hutch for less than 60k. The house is now worth 175k (fingers crossed I've just had a mortgage valuation for a buy to let on it!). I'm happy I found that extra bit of money, its been a happy home.