Help please! Valuation lower than offer.

FCJ77

Hi,

I’m after a bit of advice, please. My partner and I are in the process of buying our first home. We’ve had an offer accepted, a mortgage agreed in principle, have instructed a solicitor and commissioned a Homebuyer’s Report for the property. We’ve just returned from a weekend away to find a copy of the Standard Valuation Report in the post-box; the valuation is 10% lower than our offer.

Our accepted offer was 9% below asking price (the house is a 1900 built semi-detached in a fairly sought-after village location) and our mortgage was 29% LTV on that offer. Before the valuation came through we were perfectly happy with the price we’d agreed, but now we’re not so sure. The only things mentioned in the Standard Valuation Report are “higher than normal levels of damp”, “signs of attack by woodboring insect in outbuildings” (the outbuildings are very small and not a major feature of the property), “natural levels of radon gas in excess of the limits considered acceptable” and a loft conversion that is “understood to be non compliant with Building Regulations in terms of fire escape requirements”. We’ve been led to believe that the valuation nearly always matches the asking price unless there’s anything significant in mentioned the survey. Surely there’s not enough in there to warrant a 10% lower valuation, which suggests that we’ve just been numpties and offered way too much (I’m quite prepared to accept this, but it’s always nice to get a general consensus as to one’s numpty status :rotfl: ). Anyone else currently buying had experience of such a low valuation? Are surveyors simply taking account of the plummeting market?

We’re thinking that we ought to drop our offer to match the valuation on the premise that our lender may choose to drop their mortgage offer by this amount. I’m fairly confident that’ll lead to the sale falling through, as our vendor doesn’t need to sell (a bigger property that they like in the area has come on the market, but it’s not the be all and end all for them) so we’re sort of resigned to the fact that we might lose this one, but I thought I’d canvass opinion.

Any advice, comment, p1$$ taking (anything to lighten our mood at the moment :rotfl: ) gratefully appreciated!

Thanks

GDB2222

The Radon problem is not to be taken lightly.

Some valuers are over-conservative, and in any case unless there are 100's of similar houses, it's hard to value to within 10% in the current market. Apart from that, you may well be over-paying on a house at a time when the market is dropping like a stone.

If the sale falls through, you may be very fortunate.

hethmar

At first I was going to say just lower your offer but have to say that Radon gas report sounds worrying. Is that something common in the area where you live?

the_worried_one

I was under the impression radon is as a result of local geology, and so is not something you can particularly do anything about, and would most likely be at the same levels throughout the same area? Is this not correct?

I would offer at or slightly below the valution, if they don't accept then let it go. good luck anyhow.

domcastro

I was in a Radon area (only found out when I bought the house) I was really worried especially as I smoked! As I had moved for a job and the whole area was mountainous and granite - it was the same everywhere. I bought the house and paid for a radon test (about 35 pound and put readers in house for 3 months) - the results were 25 (average 20) but action level was 200. I was pleased. You can do things to reduce Radon but normally costly. I would put in a 10% lower offer - show the EA the valuation. Focus on damp and insects and possibly the Radon, but any house in that area will have a radon problem.

Sonofa

If you are only asking for 29% LTV why do you think the mortgage company would reduce their offer?

hethmar

http://www.hpa.org.uk/webw/HPAweb&Page&HPAwebAutoListName/Page/1158934607718?p=1158934607718

If you arent concerned about the radon wotsit (we dont get that in our area) then go in for a price lower than the valuation and just bite the bullet if the vendors drop out. The next buyers are going to get the same sort of report and probably a lower valuation and they will surely know that.

green_tree_2

i was in a similar position 6 months ago, when my home buyers valuation came back - it was a little worrying to have a down valuation. But once i showed it to the agent she showed it to the vendor and they dropped the price to match it. Sh*te thing was after all that tooing and throwing the whole sale collapsed with the market crashing :mad:

Paley71

The valuation for the house we're buying came back at 2k under out agreed price.
I was quite amused as the vendor has mentioned many times what a 'bargain' we were getting.
We just got him to knock off the 2k.

GDB2222

“natural levels of radon gas in excess of the limits considered acceptable” - I assume that's above the 200 Bec/m3 limit? I haven't had to do it myself, but I understand that measures to reduce the Radon levels inside the house can be very expensive.

FCJ77

Thanks very much for all the replies.

Not sure what the actual measured level of radon was (the house is indeed in an area where the level is high in general), but we'll look into how much we'd have to spend to reduce it to an acceptable level and if we can afford it, we'll bang in the lower offer and see what happens. We like the house a lot, but not so much that we won't walk away if we have to.

Sonofa: I very much doubt the mortgage will be a problem, but I suppose there's a slight possibility.

Thanks once again, everyone, for the advice.