Homebuyer's report says house is overvalued

Bekikia

We are currently trying to buy a house which was advertised at £229,950. We initially offered below this, however the sellers told us that they had someone offering the asking price but because we are first time buyers with a large deposit and they wanted a quick sale, they would go with us if we met them half way between our offer and the asking price at £225,000.

Everything was going quite smoothly until yesterday after we got our homebuy survey report back - the surveyor called us and said we would be mad to pay £225,000 as he valued it at £200,000 maximum, based on the state of the property and everything else that is currently selling or has sold in the area.

We are in a difficult situation as we really want the house, and our current tenancy ends in 3 weeks, meaning we will essentially be homeless, and we don't want the added hassle of having to find new rented accomodation and go through this whole house buying process again - stress and cost!!

We plan to try to renegotiate the price down through our solicitors, however we are worried that the vendors may pull out if they think they could get their original asking price from elsewhere.

Just wondering if anyone else has had experience of this situation, and any advice or similar tales would be welcome...

Eric1

3 weeks is usually not enough to exchange and complete anyway. I'd find new rented accomodation and would not rush the purchase. Until you exchange, anything can happen.

Bekikia

Sorry - should have said we are actually quite far through the process by now, and most conveyancing, searches, mortgage offer etc. have been completed. Advised by our conveyancer today that we are still on track to complete by 23 July. It's just that the surveyor now has thrown a spanner in the works. Thanks for the response though.

Charliezoo

Just out of interest, looking at other properties in the area, do you feel you're paying over the odds for this house?

Eric1

Unusual. If the lender is happy with the valuation and mortgage offer, the surveyor has no reason to undervalue unless it's really overpriced.

Bekikia

Looking at house price reports for that street, it would be the highest price anything on that street has gone for, so if we could get the price down then it would obviously be a much safer investment.

Any money we can save is obviously a bonus, it's just slightly worrying at this point when we have already invested both money and emotions in it.

I am really looking for similar tales of how people have handled this situation, whether it's a common issue, and what the outcomes have been.

mcc100

Do you really believe that the seller has actually received another offer matching the asking price?

Has this been passed on to you via the estate agent?

Not for one minute would I believe this.

If I was in your situation I would withdraw your offer and walk away, advising the seller or estate agent that you can only afford the price that the surveyor has valued the property at.

john_white

I assume this is an 'extra' survey. I.e. mortgage lender did a basic valuation and you've commisioned a homebuyers survey?

We did this. The valuation came back at 6k under our offer but the only thing the survey found was the sofits needed sanding down prior to painting. The mortgage valuation was OK.

So we couldn't see why they valued it as they did. Comparables showed the price was about right. Being cynical I assume it is to try and justify the fee. Lets face it you pay hundreds for a report only to be told everything you already know!

If the mortgage co valued it at 225k it's really your call 1 values it as you do 1 does not. Do you know what the current owners paid for it and when? If so try the nationwide price index for a GUIDE. Assuming nothing major has changed.

We did this on a house we looked at on at 220k. Nationwide valued it at 206k. Vendor ended up dropping the price to 200k. And it sold within a week.

tyllwyd

Is your deposit large enough to cover the difference between the mortgage valuation and the agreed price? Is your mortgage offer still OK with the new valuation? If it is, then it is your money you are spending, so you can decide whether you are willing to risk it or not (if you need to sell in the short - or maybe even medium - term, it seems very likely you would lose that money).

Is the vendor in a chain? If they are planning to buy another house, they will have done all their sums on the agreed price - if you try to reduce the price by £25K late in the day there is a big chance that they won't be able to go through with their purchase, so you are taking a risk that the sale would fall through.

I think if it was me I would try to negotiate the price down, but you have left it very late so you have to be prepared for things to fall apart if you do that.

DVardysShadow

Bekikia wrote: »

... Any money we can save is obviously a bonus, it's just slightly worrying at this point when we have already invested both money and emotions in it.

Why did you get the homebuyer report? Surveyor may think you want to negotiate price down and that he is doing you a favour by giving you some well founded ammunition. You may be thinking you want your confidence boosting and want the value upholding.

If the mortgage is sorted, this does not have a lot of bearing on the purchase. But if you have your doubts, then say goodbye to the money and emotions and walk away.

poppysarah

Negotiate down.
Seriously. If you don't you'll sit in this house in 6 months and know you've wasted 25k