How to complain

Chinkle

Look at it this way, the buyer was happy to make an offer of £300K, but someone else is buying the property for them (the mortgage company) and they will be paying them back over 25 years. So it's like the mortgage company coming in and saying we're offer £270 for it.

Mortgage companies and buyers alike are much more cautious in these days with negative equity hanging around like a bad smell.

You don't say if you are buying somewhere else yourself - if so, maybe that valuation will be 10% under too - or maybe you can renegotiate the price with the vendor based on the shortfall in your sale.

If I was your buyer I wouldn't be prepared to take the risk on the extra £30K you believe the property is worth.

The EA will do his bit to convince the surveyor he got it wrong and revalue higher, maybe your buyer will be prepared and able to pay a little more than this. However, if you are unwilling to budge, I think you'll just have to wait out the property slump.

1echidna

Chinkle wrote: »

Look at it this way, the buyer was happy to make an offer of £300K, but someone else is buying the property for them (the mortgage company) and they will be paying them back over 25 years. So it's like the mortgage company coming in and saying we're offer £270 for it.

Mortgage companies and buyers alike are much more cautious in these days with negative equity hanging around like a bad smell.

You don't say if you are buying somewhere else yourself - if so, maybe that valuation will be 10% under too - or maybe you can renegotiate the price with the vendor based on the shortfall in your sale.

If I was your buyer I wouldn't be prepared to take the risk on the extra £30K you believe the property is worth.

The EA will do his bit to convince the surveyor he got it wrong and revalue higher, maybe your buyer will be prepared and able to pay a little more than this. However, if you are unwilling to budge, I think you'll just have to wait out the property slump.

There is another option which we would have taken if the surveyor had not shifted his valuation. That is to drop the buyer if he cannot pay the agreed price and look for another purchaser. We had a few also interested. Of course there is the risk of another low valuation.

firsttimetom

As others have mentioned, a value of something is a very personal opinion. What someone thinks is good value, someone else won't (Hence all the people buying newbuild properties through Homebuy direct).

My personal opinion is that 95% of the property in this country is over priced. If house prices halved tomorrow, the housing market would pick up and people would live fuller lives without crippling debts and more spare cash to spend elsewhere in the economy.

The valuer simply thinks that the house is not worth what the buyers do. And as someone else pointed out, the bank is buying the house on behalf of the purchaser and will not want to lose out should your buyer get repo'ed.

Jewel_2

1echidna wrote: »

There is another option which we would have taken if the surveyor had not shifted his valuation. That is to drop the buyer if he cannot pay the agreed price and look for another purchaser. We had a few also interested. Of course there is the risk of another low valuation.

That's what we will do if the surveyor doesn't shift or the poor buyer cannot find the extra money. Irrespective of what the lender is willing to lend, we cannot afford to sell at that price, so story over really. It's a case by the looks of things of both buyer and seller thinking it's worth the extra, but the lender doesn't. This in effect will mean that the whole chain goes to pot, because the chain has already waited while the house they first wanted was 'undervalued' too. I think if this is the case, then the RICS valuer hopefully can give a very good explanation, otherwise a whole load of money right up and down the chain has been wasted, and therefore this should be questioned. I don't see where the banks have helped in this instance at all.

misskool

Jewel wrote: »

That's what we will do if the surveyor doesn't shift or the poor buyer cannot find the extra money. Irrespective of what the lender is willing to lend, we cannot afford to sell at that price, so story over really. It's a case by the looks of things of both buyer and seller thinking it's worth the extra, but the lender doesn't. This in effect will mean that the whole chain goes to pot, because the chain has already waited while the house they first wanted was 'undervalued' too. I think if this is the case, then the RICS valuer hopefully can give a very good explanation, otherwise a whole load of money right up and down the chain has been wasted, and therefore this should be questioned. I don't see where the banks have helped in this instance at all.

It doesn't really matter how much the vendor and the buyer presume the property is worth. The bank is underwriting the risk of the purchase. With house prices fallen 10-12% in the last year, your house is now worth 10% less than it was last year.

The banks are trying to lend prudently, you can ask them to revalue but having already had the same valuation twice, you should now start to consider that 270k is the true value of your house.

1echidna

misskool wrote: »

It doesn't really matter how much the vendor and the buyer presume the property is worth. The bank is underwriting the risk of the purchase. With house prices fallen 10-12% in the last year, your house is now worth 10% less than it was last year.

The banks are trying to lend prudently, you can ask them to revalue but having already had the same valuation twice, you should now start to consider that 270k is the true value of your house.

Have I missed something - I didn't notice that the OP had had two valuations? Clearly there is a risk of this if the new prospective purchaser applies to the same lender who will use the same firm of surveyors who will wish to be consistent. With lenders such as Lloyds (with its various arms) occupying a large share of the market this risk can be quite high.

I think people have a misconception about what surveyors should be doing when valuing. They should be valuing on current market conditions not what may be happening in one or two years time. Lenders can protect themselves from this kind of risk by asking for large deposits of 25% or more. In our case the surveyor was clearly trying it on, without looking at what similar or in some cases slightly worse houses had recently fetched. Not wishful thinking, actual sale prices which despite what anyone may assert here the value of which is what people are prepared to pay, not some wishful thinking that the worth is 50% or whatever of what people are paying.

Blacksheep1979

1echidna wrote: »

Again you are talking nonsense. When the sale goes through with the forced lower price one has indeed lost, and lost considerably.

You don't work in finance or with figures do you :rolleyes:

By your logic if I now offer 1 and a bit million for the property now and all of a sudden can't get the financing they're £1million down...

1echidna

Blacksheep1979 wrote: »

You don't work in finance or with figures do you :rolleyes:

By your logic if I now offer 1 and a bit million for the property now and all of a sudden can't get the financing they're £1million down...

Actually I did work with figures, and big ones at that and I know that one loses considerably if 500,000bpd of oil production turns into 0 bpd overnight. The example you quote has little to do with the argument at hand which is to do with erroneously low property valuations (which may even be deliberately low) and which could reduce the amount the vendor is able to realise.

Blacksheep1979

Sorry but your example is totally different again - if you're used to a certain output of course you're not going to be making money if that stops but again that's not a loss that's ceasing a flow of income...

The op isn't churning out a number of houses per day/week/month they have one item and all that matters is the buy and sell price, nothing in between. If you want an oil analogy that would be like buying at $50 a barrel at the start of 2007 not selling at the peak of ~$140 and selling now for $70 - you've not lost $70 you've made (ignoring inflation/time value of money or anything else you want to bring into it) $20

1echidna

I think you are guilty of concrete thinking. The example I quoted is pretty universally known as lost production. One can also insure against loss of income to cover for essentials in the event that one becomes unemployed. You seem to think that "loss" as a word is only used validly in relation to a balance sheet This is not the case.