Valuations

Made_Without

I just dont get it :undecided

How do the surveyors do the valuations

I means say a property is on the market for £100k
and and offer is accepted of 95k

Mr. Surveyor goes off does survey and comes back saying the property is worth £100k

But he is likely to have done the same for anything from 95-100k surely?
And what if the offer accepted was for 94k

Would he have ever reported back that the property was worth 95k?

It seems on the whole all they really do is confirm the amount you are paying is ok - not that you got a good deal or that you could saved yourself a little

(Im not talking about the extreme cases where the property is considerably undervalued)

Rant over
C*F

[Deleted User]

This is something I've been wondering about recently. We're in Scotland where we have a fairly new system in that the seller has to get a survey done prior to putting the house on the market (previously potential buyers would each commission their own survey).

In many ways I think the new system is better, but a lot hinges on the surveyor doing his job well. If his survey comes in low it's highly unlikely that you'll get a fair price for your property.

Take for example the situation in my street. Only two properties similar to mine have sold in the past few years. Both were sold at well over valuation price - obviously there was competition for them.

Houses in surrounding streets have much lower values. What does the surveyor do? Value my house highly based upon just two sales or value my house in line with property in surrounding streets which are less popular.

The area I've moved to is traditionally a slow selling area and the people I bought from were expecting to have real trouble selling - in actual fact there house was on the market a couple of days! In this small street of 15 houses three houses have now sold in the space of a few months and every one of them is well up on 2007 peak. Was this luck (3 buyers with more money than sense skewing the figures)? Or does it just take a few people willing (or daft enough) to pay over the odds to dictate future valuations in a given area/house type? And conversely if a couple of people in a street sell at rediculously low prices because they want to move fast and don't care about the cost does that lower the value of everyone's property in a street?

Sorry, that's a bit of a ramble. But I'm just curious as to how the surveyors do the valuations.

Made_Without

Yep me too scarter! I really dont get it
Another example of a property I was interested (and fell through in late stages after considerable money spent)

On the market for £385k (as the 3 agents who went to value it came up with that figure).
2 months later it price was lowered to £350k
After a spell of making offer - reject, raising offer, reject, my offer of £317k was accepted.

And guess what, survey valued it at £317k ! I just find the whole thing bizzarre - so if £315k had been offered would he really have said no its worth more?
If I offered £318k would he have said no?

I guess they must work within a 'range' but then that begs the question of how wide a range? !

C*F

turtlehomes

There are three methods of property of house valuation:

• cost approach
• income approach
• comparables approach

The most generally accepted method of valuation in the residential property market is the is by using comparables. A valuer should be able to gain a rough idea of what your property could be worth by looking at local papers, estate agents’ windows, property websites and similar house in the area. This method, therefore, incorporates relevant market conditions and activity within a particular location.

A valuer will also consider the following factors

• the age and type of property,
• the accommodation available,
• the fixtures and features of a property,
• the property’s construction and state of repair,
• the position within the locality and the surrounding amenities available,
• the tenure, tenancies, service charges or any other liabilities.

Made_Without

@turtlehomes - looking at similar prices in the area - but these vary considerably - majority of properties on that street and around are on market at lower value, bar few (with agents who overprice and have already shown reductions from the start out price) - mouse price etc they too show the property as being worth within a range - to cover for obvious differences in decor and upkeep / work done.

The other points you mention are all fair - but my question is - there must be a range - they tot all the factors together and come up with a figure - I find it surprising that it matches the offer on most occasions and are never 1-9k out

Has anyone got experience of the value being over the amount they are paying? and if so, how much by?
And similarly, who has had their property undervalued and by what amount?

I'm just curious as to how it work and whether if i offer 1k more or less whether the surveyor would have come up with a different result.

C*F

DVardysShadow

Chocolate*fish wrote: »

I means say a property is on the market for £100k
and and offer is accepted of 95k

Mr. Surveyor goes off does survey and comes back saying the property is worth £100k

Mr Surveyor will only value at a max of 95k. Reason is that someone would have offered more if it is worth more.

googler

I feel surveyors also take into account size of a property, too, in comparison with others.

Might the purpose of the valuation have some bearing? If the surveyor is providing a valuation for mortgage purposes, the mort lender is essentially looking for a Yes to the question "Is it safe to lend our money on this property at £x ?" If it's reasonable in this context for a surveyor to tie in with either a previous sale price, or an asking price, and no compelling evidence or reason to disagree, then is there a possibility they might do that?

Made_Without

@DVardyShadow - normally I would agree but - this is the score

Seller bought place for 95k 2 years ago

Puts property on market at £100k and was offered £100k
then the buyer late in the day reduced the offer- Seller said no-go and sale fell through.

Seller within a month put property back on market again for £100k
I put in offer for £90k - declined
Offered 95k accepted.

Agent had mentioned that previously there had been two offers for £100k and they chose one offer over the other and he could really have gone back to the other person (i dont know why he didnt)

So people were willing to pay more - property 2nd time round was only on market 2-3 days before offer accepted.


C*F

DVardysShadow

It is worth 95k

You are the highest capable bidder. The first offer at 100k is irrelevant, because making offers you can't complete on is ridiculously cheap. The second offer which the agent did not follow through is also irrelevant - if it could have gone anywhere the agent would have followed through - basically, he was spinning you a line.