Under valued survey

RX-78

Just had a shocking news today - despite asking for 10-15k less then other flats around my apartment complex and agreeing on price thats 7k less than my original asking price, the surveyor valued our flat 7k less than agreed sales price (hence 14k less than original asking price, and 30k less than the most expensively priced similar specced flat in same place's asking price)!

I would understand if there was structural problems or any other faults but apparantly there were no problems. I know several flats around mine has sold for more than our agreed price. In fact a ground floor flat on same block has just sold for 12k more than the serveyor's valuation of my flat (and we are on 2nd floor, exactly same size, layout etc)!

I know the reason the surveyor's valued the place is because there were several repo's sold for cheap in last few months but they had everything ripped out, including kitchen, lights and even doors. I know this as I've been keeping an eye on property prices around here. Unbeleivablly he's decided those repo houses should be the going price for flats in here.

Is there anything I can do?? I know I can simply say no and put it back on the market but we really need to move due to work constraints and we are not sure if we can take the risk, so thats probably not the best option.

Fire_Fox

The asking price of your flat and the neighbouring flats is irrelevant, the sold prices are relevant. Does the ground floor flat have access to outside space? What evidence do you have of the condition of the repo flats, no kitchen or bathroom may have made them un-mortgageable? Other than that the repossessed flats do give an indication of the market, as lenders are obliged to get the best price, and a building full of repos can indicate or contribute to problems with the desirability of that particular block. Is your buyer willing to try to renegotiate with the lender or is he insisting on a reduction in price?

RX-78

Thanks for the reply!

I know the asking price doesn't indicate the actual sold price - but I do think they are helpful to know the local trend. From what I can see it was at its lowest 12 months ago, and now the asking price seems to be climbung back up where I live. I also know from my estate agent who sold a few flats in my complex the lowest (non repo) they sold & others that sold here recently. The lowest sold my agent sold is still 3.5k above valuation of my flat and when the average asking price was at its lowest.

I also know of couple of repos that sold without kitchens etc as I heard it from people that got beaten to the sale (well, assuming they are telling the truth). They sold at same price as my flat is being valued right now.

Ground floor doesn't have any more space than ours outside/inside as its a mass built flats with exactly the same spec. Being on higher ground we do have better view (partial view of river and full view of the pond) and of course, security. There are no lifts which I suppose might discourage some buyers.

Thankfully our buyer seems reasonable and is willing to re-negotiate. I'll probably end up taking 3-4k hit but feel very angry as other surveyors who valued similar flats in our block seems (of course no proof of this but judging by the sale prices I was told from agents/neighbours/friends etc) to be putting it at much higher price than mine!

p.s. if I think the surveyor has made an unrealistic valuation and want to consider complain/legal action, does anyone know where to turn to? Does RICS have powers to investigate/compensate or will I have to do this through solicitor? I've not decided on this but might consider it if valuation is severly out of sync with other similar flats.....

Fire_Fox

The problem with asking prices is that the realistically priced properties disappear quickly leaving the overpriced properties. If vendors new to the market look to what remains to value their own flat they are going to be overpriced too. Why are you only looking at the sold prices supplied by from friends, neighbours and estate agents, why not the official land registry figures?
www.houseprices.co.uk

Unless you can prove the surveyor was negligent in his research, I don't think you are going to have any recourse just because he is a little conservative in a market that is falling again. Getting RICS involved seems a bit OTT - this is someone's livelihood! What would you be claiming for, you haven't lost any money as you don't have to sell to this buyer? Get together facts and figures (not hearsay) and work with your buyer to challenge the valuation.

lovethymini

The first thing to do is talk to the surveyor to understand how he came to his conclusion, he will have record of the properties that he used as comparables.

RX-78

FireFox:

Thanks. I did have a look at that before but its difficult as some of the flats in the front/back dont have balcony/water feature view like mine. Anyhow, average for 2009 comes out at £125k - 10k more than what our surveyor is valuing. So unless he has some proof of continuing fall in price around our flats (judging by rising asking price I think it is to the contrary), I dont know where he derived his valuation from.

I'm a professional so I know how damaging a complaint to professinal body can be. But if surveyor cannot justify his figures, and he is damaging our livelyhood & costing several thousands in pounds, potentially loosing the sale on top, I feel I should complain. Is that unjust?

lovethymini

A good surveyor will justify his valuation. He will tell you what he used to reach his conclusion. He may help you understand what does and does not have an affect on the valuation. I worked for a large surveying company a few years ago and had an insight to the industry.

However.

Last year, we had an offer accepted on a house, and the surveyor undervalued it by 5pc (£11k). We spoke to the surveyor and discussed in detail, and concurred with him. The egotistical estate agent argued that the surveyor didn't know the area (!) and disagreed, saying that if we didn't buy the house at the original sum, he had several buyers lined up who'd pay more for it. The seller took the EA's advise. We weren't happy with this and pulled out. The house didn't sell and was eventually taken off the market.

smug

A flat in a block with a bunch of repos. Take whatever money you can and think yourself lucky to shift it.

RX-78

lovethymini wrote: »

A good surveyor will justify his valuation. He will tell you what he used to reach his conclusion. He may help you understand what does and does not have an affect on the valuation. I worked for a large surveying company a few years ago and had an insight to the industry.

However.

Last year, we had an offer accepted on a house, and the surveyor undervalued it by 5pc (£11k). We spoke to the surveyor and discussed in detail, and concurred with him. The egotistical estate agent argued that the surveyor didn't know the area (!) and disagreed, saying that if we didn't buy the house at the original sum, he had several buyers lined up who'd pay more for it. The seller took the EA's advise. We weren't happy with this and pulled out. The house didn't sell and was eventually taken off the market.

Thanks, it nice to have someone with insight. I've been calling the surveyor since yesterday with no joy (and EA has been trying since 5 days ago), always on answer phone. Funny how they had no problem answering the phone when they needed to arrange the survey. I get a feeling even when I do catch the surveyor he'll be too bigheaded to justify is valuation.

Asked the buyer to show me the survey report so that might shed some light onto it.

Milliewilly

lovethymini wrote: »

A good surveyor will justify his valuation. He will tell you what he used to reach his conclusion. He may help you understand what does and does not have an affect on the valuation. I worked for a large surveying company a few years ago and had an insight to the industry.

However.

Last year, we had an offer accepted on a house, and the surveyor undervalued it by 5pc (£11k). We spoke to the surveyor and discussed in detail, and concurred with him. The egotistical estate agent argued that the surveyor didn't know the area (!) and disagreed, saying that if we didn't buy the house at the original sum, he had several buyers lined up who'd pay more for it. The seller took the EA's advise. We weren't happy with this and pulled out. The house didn't sell and was eventually taken off the market.

So if you had an insight into the industry why did you offer £11K too much in the first place to be corrected by the valuation surveyor?

Cannon_Fodder

If you are certain of your figures, tell the buyer to go away. Another is sure to be along shortly.

Then cross your fingers.