Valuation surprise

worriedfirsttimebuyer

Yes the more i think about this , the more i think it's a bit of a scam.
We only have a 3% deposit. So.. the building society undervalue the house forcing us to either find extra cash for the deposit or abandon the sale, having paid them £500-odd for their survey. Either way, it's win-win for them...
I am not an expert on house buying and selling but I have done my research in the last 6 months since we decided to look for a house, and in my opinion, the house IS worth more than they say.

The asking price was £118,000. So either the estate agent got it really wrong (doubtful, the price is in keeping with many similar houses in the local area) or the surveyor was told to value it under.
Grrr, so angry!

silvercar

In my experience the higher the loan to value ratio the more cautious the valuation. If you were putting down a 50k deposit the valuer wouldn't really care whether the house is worth 110k or 111k - he's not going to have the building society breathing down his neck on whether they are lendind 45.4% or 45.0% of the value.

For a 95% mortgage, especially if that is their max percentage, he is going to be very careful.

Heth_2

If you've got a 3% deposit and you agreed to buy for 111k (presumbly your deposit is 3,330 pounds then) and the bank was lending you 95% of 111k (ie 105,450) then how were you going to afford the house since that doesn't bring you up to 111k?

worriedfirsttimebuyer

Bank is lending 97%.

Just got survey back. House urgently needs a damp course, or so it says... How do I go about arranging this?

Also, another strange thing? The valuation says the purchase price is reasonable. Also says similar houses in area go for 110k-120k. Cost of re-building is 108k. So, where are the BS getting their 110k figure precisely from?

apples1

I would explain situation to seller, ask if they can meet you in the middle, they drop £500, you scrape together extra £500. When I was in that situation (quite a few years ago) it worked! Good luck

apples1

sorry worriedfirsttimebuyer - our posts crossed!

apples1

The cost of rebuilding does not equal the cost (or value) of the house. The rebuild cost is what it would cost to rebuid the house (if it was burnt to the ground for example). The value of the house includes the actual house but also the land/plot its built on.

Don't know anything about sorting damp course - damp scares me I'd be wary. Howver I'm sure someone else can better advise on this.

silvercar

Damp course is a protective membrane put in a couple of layers of brick above ground level to prevent rising damp. Saying the house needs a damp course does not mean the house has damp. You are preventing a future problem.

This is the exact reason you have a survey done. All houses need to have a damp course (also now required for building regulations) either house is very old or house has had an extension and a danp course wasn't put in or the existing damp course has perished in total or in part.

Damp courses cost from a few hundred upwards. They need to be done professionally. This is something you should ask the seller to pay for. Any survey is going to show this up. If you don't buy the next person will have this show up on their survey.

worriedfirsttimebuyer

After further thought, am now quite optimistic that the seller will agree to drop the price or at least half of it.

If I get an expert out to check damp levels and give me an estimate, how must will this cost?

Sorry if my questions seem silly, as a first-timer, it's hard to know who to look for for advice. The estate agent is working for the seller, the building society are just out to make money and protect themselves, so who answers all my silly questions...?

[Deleted User]

You can get a free quote. I had 2, one from a specialist that I found myself and a second one carried out by a specialist recommended by the estate agent. They both found nothing. That shows how 'accurate' surveyors are. Best of luck!