Surveyor values house at £2k less.

chocoholic1_2

We have sold our flat as we are relocating. The buyer had a survey done, and she sounded like a complete numpty. She spent a good proportion of the time looking in the wrong garage. Anyway, she valued the flat at £2000 less than the agreed price. (Which was already £9000 less than the asking price).

Has anyone else had this happen? What was the outcome?

Tiger_greeneyes

This is par for the course. If a surveyor has comparable evidence that your property is worth less than the asking/sale price then they'll downvalue it. How you overcome this is up to you. You could maybe negotiate with the buyer to go 50/50, insist they find another two thousand pounds or just write the two thousand pounds off by readjusting the sale price.

If you're sure your flat is worth more than the surveyor has indicated then you can always search out direct comparables - ie similar properties in the local area that have recently sold. The surveyor has to do to that when they're researching the property value but if you turn up evidence that a surveyor has missed then they'll usually have another look at it.

The market value has nothing to do with asking price - you can ask what you like for your property but the true market value will always be directly comparable with similar properties in the surrounding locality. No surveyor worth their qualifications will say a property is worth more than the market value, even if someone has paid over the top for it - which seems to be what's happened in this case. It's just the way the market is at the moment - in a rising market this scenario is much less likely to occur.

Hailstorm

The lower valuation may also affect your buyer's mortgage offer. Say for example they are already borrowing the highest percentage the lender is prepared to let them borrow (say for example 75%) then they will only lend up to 75% of the survey valuation, not 75% of what was offered.

Tiger_greeneyes

Hailstorm - it doesn't really work like that because surveyors don't have anything to do with lending decisions, their only brief is to ascertain the condition and value of the property so the lender can make their financial decisions knowing the property is a sound security prospect. The survey is completed independently prior to a mortgage offer being issued.

psoley

I may be wrong but i thought it did work like that. The lender will base its mortgage offer on whichever is lower, the valuation or the accepted price. Chances are the valuation will never be more than the accepted price as the valuer is only stating if the property is worth what has been agreed.

That is, if this valuation is instructed by the lenders.

Welshwoofs

We had a valuation increased when we were buying our current house. They valued it around £10k below the offer we'd agreed and when I queried what had led to such a down valuation was told that similar sized houses in the village sold for that much lower than ours. However I pointed out that although there were other cottages exactly the same as ours in the same village, none of them had more than a tiny back yard and none had parking - whereas we had a double garage and half acre of land (neither of which the surveyor had looked at). A few days later I heard from my lender that the surveyor had adjusted the valuation to my offer.

chocoholic1_2

Thank you for all your comments. We are waiting to get quotes from electricians, the surveyor reckoned it might need a rewire. We had one round who thought it would only need a new fuse box, which is good news. Then we just wait to hear wait the buyer thinks. I think it will depend on her mortgage, we are prepared to split 50/50 if we have to.
WW - How do we go about questioning the surveyors verdict? She did seem particularly useless?

Tiger_greeneyes

psoley wrote: »

I may be wrong but i thought it did work like that. The lender will base its mortgage offer on whichever is lower, the valuation or the accepted price. Chances are the valuation will never be more than the accepted price as the valuer is only stating if the property is worth what has been agreed.

That is, if this valuation is instructed by the lenders.

Yes and no!

Neither the surveyor or lender will be bothered about the price the estate agents value the house at or even the figure the sale was actually agreed on. They're both only interested on the surveyor's figures.

Tiger_greeneyes

chocoholic1 wrote: »

Thank you for all your comments. We are waiting to get quotes from electricians, the surveyor reckoned it might need a rewire. We had one round who thought it would only need a new fuse box, which is good news. Then we just wait to hear wait the buyer thinks. I think it will depend on her mortgage, we are prepared to split 50/50 if we have to.
WW - How do we go about questioning the surveyors verdict? She did seem particularly useless?

As surveyors aren't electricians, they can't be particularly specific in that field, no matter what survey you opt for. If they're concerned about the electrics, they will recommend or ask for further investigation.

It's a bit like going to see your gp and being referred to a specialist for a proper diagnosis - if you see the surveyor as a gp and the electrician as a consultant, you won't go far wrong.

Challenging the surveyor's advice is simple - gather together your evidence and take it along to your lender who will pass it on to the surveyor who will be happy to look at it again to see if it changes anything.

As for downvaluations, they're there to protect everybody, although it doesn't always seem like that at the time. The lender won't want to lend too high and the purchaser won't want to pay over the odds for the property. If a property is over-sold, the purchasers and lenders will be in financial difficulty if the purchaser defaults on repayments for any reason as the property (unless it's in a rising market) will be worth less than the actual market value - which means the purchaser was in negative equity from the day they bought the property.

However much you want the property, putting yourself into negative equity from the outset is never the best scenario - so see the surveyor as your friend!