Market valuation v.s. purchase price

ecpgffw

I paid a surveryor to provide a HOMEBUYER REPORT for me and the surveyor's overall opinion of the property:
I am pleased to advise you that in my opinion, this property is a
reasonable proposition for purchase at a price of £305,000.1 found evidence of dampness in the rear wall but nothing more of significance. I cannot foresee any special difficulties apart from this arising on resale in normal market conditions.

However, the market value in his opinion as of the inspection date was:
£ 297,000. He told me that the difference is caused by the dampness and low quality the loft as well as poor decoration. Also the valuation from my lender is only 290,000.

However, a similar property next door without the loft extension was sold at 295K last November, so the vender insists his property should be more expensive than 295K.

Which one is right? what should be do then? Thanks.

Fire_Fox

You can not extrapolate a value from the selling price of ONE property, what are the land registry sold prices for a range of others in the street and area? Do you want to pay more than you have to for the property? If so try to challenge the lender's surveyor's valuation. If you want to pay as little as possible, only tell the vendor about the lender's valuation and advise him that you cannot raise the full finance and renegotiate the purchase price.

Cannon_Fodder

There is no right or wrong answer.

All of you - lender, surveryor, vendor, buyer - can hold whatever opinions you like.

From your point of view, though, it is the Lender's opinion that matters as you wish to convince them to lend you some money. They want to be happy about seeing that money again, so are perfectly entitled to be cautious in their valuation.

From the vendor's point of view, they can ask whatever figure they wish. They might need a certain amount, for debts or next house.

If the two sides do not compromise to a figure somewhere in the middle, you will have to find somewhere else and the vendor will be stuck in the house they have mentally moved out of...

Depending on your region, some areas are still dropping in price. Even if yours is in an upward moving area, if there are no buyers with the cash or ability to raise a mortgage to the value necessary, then it will remain unsold. The question for the vendor, is how long they wish to remain 'on hold'.

Length of time on the market will affect the vendor's flexibility on price. Maybe wait a week and see if they come to you?

googler

ecpgffw wrote: »

However, a similar property next door without the loft extension was sold at 295K last November, so the vender insists his property should be more expensive than 295K.

WHY?

What makes him think prices in general have gone up since November?

Your lender's valuation is the end of the story. They give you lending based on their £295k valuation. If you're willing to pay more, you find the extra.

Doozergirl

googler wrote: »

WHY?

What makes him think prices in general have gone up since November?

I don't think he does, necessarily. The house has a loft conversion which the house that sold for £295k didn't have.

ecpgffw

Doozergirl wrote: »

I don't think he does, necessarily. The house has a loft conversion which the house that sold for £295k didn't have.

Yes, thats the reason the vendor insists a higher price.

I am happy to see a lower price can be offered and I can fund the gap between the two prices, but I really dont want to be ripped off.

ecpgffw

Thank you all for your replies. It appears neither the lender nor the surveyor would like to increase their valuations, so I would wait for one week to see how it goes.

Thank you again.

Doozergirl

That's a pretty good idea if you're able to restrain yourself - lots of people can't! WIthin that week I suspect that the vendor will move a bit - maybe not as uch as your valuer would like, but perhaps less than they were expecting initially.

Good Luck