Quick Q about house price vs surveyors valuation...

jamtart6

Hello. I have a quick question about house prices and surveyors valuation as I am unsure how it works. This is a hypothetical situation, but I'm interested to know....

Say I offered £100k on a property, offer was accepted, then the survey came back and said the house was only worth £80k - do I get the seller to reduce price to £80k or do we have to pay the £100k because that was the offer accepted? (If the latter, I suspect we'd pull out!!)

Just not sure what surveyors valuations actually mean. Any advice gratefully received

border_collie

You would lower your offer. The seller can then accept or refuse.

The surveyors valuation is used by the lender to decide what amount to lend on that property.

jamtart6

thanks for the info. wasn't quite sure how it worked

poppysarah

You can of course pay higher than a valuation but only if it's your own hard cash but why would you want to?

If the sellers cringe, point out that other surveyors might put an even lower price on it as house prices tumble.

jamtart6

thanks poppysarah. Just was unsure of if the seller actually had to reduce the cost by law or something, definitely would not want to pay over the odds!!

Mutton_Geoff

House prices are usually set by estate agents in agreement with the vendor (seller). Estate agents are not required to be qualified people despite their shiny suits and clipboards designed to give that impression. The first properly qualified person to look at the house after a sale is agreed is the surveyor.

They can usually cut through the hype generated by agents and quote more realistic valuations for a house. It is this figure that is more accurate. In the current market they tend to be cautious (ie pessimistic in their valuation) because generally they are protecting the banks (and ultimately your) financial interest.

A low valuation is a great bargaining tool and only a fool would ignore the valuation.

jamtart6

Mutton_Geoff wrote: »

A low valuation is a great bargaining tool and only a fool would ignore the valuation.

Yep this is what I thought

theGrinch

its very difficult to accurately value a property in the current climate of falling prices, credit rationing, illiquid markets and oscilliating confidence.

at the end of the day a property is worth what the next person is willing to pay for it regardless of what a valuer thinks. I have seen two RICS valuers 25% apart on a property within a week.

your options are to negotiate a reduction, stick at the agreed price if thats what you are happy with or walk away.

50plusabit

The surveyor values the property, bricks and morter, area. He does not add value for a top of the range kitchen, fancy curtains, immaculate gardens. He is there to make sure if you defauted on your mortgage, the mortgage company can get their money back.

geoffky

Remember Estate Agents Have Not Got A Clue What To Value Anything In This Market They Have Not Got Any History Of It Being This Bad ..some Still Think Its Ok To Ask For 2007 Prices....sellers Are Being Just As Greedy...but With Each Passing Day The Market Is Going Against Them..

icebergx

Mutton_Geoff wrote: »

They can usually cut through the hype generated by agents and quote more realistic valuations for a house. It is this figure that is more accurate. In the current market they tend to be cautious (ie pessimistic in their valuation) because generally they are protecting the banks (and ultimately your) financial interest.

The most accurate price estimate is what similar properties have sold for. Surveyors get most of these 'comparables' from Agents to value properties (along with their own experience). Just because they are qualified, it doesmn't mean that their knowledge of the market is any better. Even their valuations can vary by upto 20% (I've seen this recently).
An honest Agent will give you the most accurate valuation as they have their fingers on the pulse more. Finding one may be more difficult.