Survey - valuation question

lowis

I have just received my homebuyers survey (organised through the bank) and the surveyor notes that the Market Value is £130k.

I am a bit shocked at how low this is when compared to what is available in my area for that amount i.e. absolutely nothing! A quick search on the various property sites throws up the cheapest property at £160k (1 bed flat 55 sq m in EC1, London - try it) .

The survey doesn't note anything seriously wrong - apart from stating that in a property of this type and age that there is possible use of asbestos in the construction. In the main though it just states that some things needs updating as they are not considered 'modern' i.e. decoration, bathroom suite, kitchen units, pipework (not seen but assumed to need updating).

My question is, is it normal for a surveyor's valuation to differ massively from the local market values of similar properties? I know that one property is different to another but I know for a fact that the block I live in, state of my flat and location are better than others listed with agents at between 160 and 170k. Is it possible to get the surveyor to explain his valuation compared with local market values?

MissMotivation

Surveyors work out their valuations based, primarily, on comparable properties that are SSTC in the vicinity, so it is unusual for it to be drastically lower UNLESS the property is in need of modernisation. There is no harm in ringing the surveyor and asking them how they came to their valuation, you can also try and dispute it IF you have evidence of comparable properties that have sold near you.

Just out of interest why did you have a survey done (i'm taking it that you already own the property?) was it for re-mortgage purposes?

lowis

i am buying it under the right to buy scheme so have lived in it for 8 years already.

i just spoke to estate agent who already has 2 flats in my block (and the adjacent one) for sale, i played a bit dumb (didn't mention the survey) and said 'it must be worth atleast 130' and he replied 'it will be worth significantly more than that, even it needs redecorating and updating'.

i guess i need to ask the surveyor how he arrived at his figures.

here is a flat very close to me that is similar i- 185k!
http://www.findaproperty.com/agent.aspx?agentid=4566&opt=prop&pid=312622&photo=2

the only thing I can think of is that he was lazy and just agree with the valuation the council did at 130k almost three years ago. or he looked up sold prices on rightmove and saw the flat like mine that sold for 130k almost four years ago.

lowis

ps - i do realise that EAs might inflate values to get more commissions.

MissMotivation

It's my understanding that surveyors have to provide evidence of properties that have sold within the last 6 months to back up their valuation, I would ask to see that evidence (address of property) that he has used.

For example surveyors regularly ring me to get purchase prices of properties I have sold and they always ask for recent sales, they ask date of sale, purchase price and address.

lowis

well - i just called the agent detailed in the link above and asked him whether he reached anywhere near the asking price on the flat shown - he told me that he reached the asking price but did have some problems getting a mortgage for the purchaser - but did get it eventually. that property is about 1/2 mile from mine, if not a bit less.

i just rang another agent too and he said a 1 bed flat in moderate condition would fetch around 160k - so even knocking 10% off allowing for over estimate still gives a price of about 145k.

thank you for your feedback, much appreciated. i have made two appointments with EAs now :-)

cattie

There is nothing amiss here & I'm surprised that none of the EAs you've spoken to have explained this to you.

Usually a surveyor will give the actual price paid for the property as the market price. It is very rare that a surveyor will state a price above the price that the property is being sold for.

It is just confirming to yourself & your lender that the property is worth the amount being paid.

lynzpower

Catties right

They are not going to tell you youve got a bargain ( although i will ) they simply say, yes, its worth what the mortgage lender is lending on it. Thats it.

MissMotivation

lynzpower wrote:

Catties right

They are not going to tell you youve got a bargain ( although i will ) they simply say, yes, its worth what the mortgage lender is lending on it. Thats it.

Unfortunately they are both right, i mis-read what you typed, i was going on the basis that it had been downvalued BUT if you are paying £130,000 for it the surveyor will only value it at that figure (unless he doesn't think it's worth that much)

lowis

ah - i didn't know that.

i realised that the surveyor would report to the bank and give an opinion on whether he felt it was worth the 130k stated in the offer from the council, but i assumed that as i was getting a homebuyer survey AND valuation that the valuation aspect of it would state how much it was worth on the open market today - and not just confirm the 130k the council valued it at 3 years ago.

so far, including the survey valuation, i have been quoted values between 130k and 190k - if i want to get an accurate idea of market value at todays prices, what should i do? who should I approach? estate agents? surveyors? gah!

cattie

If you want to get a free valuation then you would get an estate agent in to value it. Best to give the impression that you are thinking of selling the flat in the near future.

If you get a surveyor in to value the flat then you will have to pay him for this.