Valuation Nightmare! It's falling through and it's not our fault

k6.bailey

We are in the process of buying a house that was on the market for 210K. We managed to buy for 203k, which we thought was great!

We are going through our Estate Agent for our morgage and have paid them a service fee for using them.

Up to now we have paid £1150 in fee's.

The valuation was done the other day and the Estate Agent's called to tell me that the house had been valued at 190k - 20k cheaper than they had valued it at!!!
The vendor wont budge on the price and still wants 203k out if us! The problem with this is the bank only lend, what the house it worth, we would therefore need to find the additional 13k (as if it grows on trees).

My questions are:
1. Is this normal? Do Estate Agents really know that little about what house's are worth?
2. Do we get all our money back? The Estate Agents say we will get it all, minus the valuation cost - I think thats rubbish - it's them who get the price wrong and it's the vendor being difficult on the price, surly someone else should stump up this cost!

Any help or advice on this situation would really be apprecieated!!

Thank you!

JQ.

You need to read your mortgage application to see if you get the fees back.

Yes Estate Agents do get it that wrong. They are salesmen with no professional training.

What price a house is on the market at has no relevance to it's actual value. Lots of people are putting houses on the market at the value they need to achieve to enable them to step up the ladder, not what they are actually worth.

paul1964_2

k6.bailey wrote: »

The valuation was done the other day and the Estate Agent's called to tell me that the house had been valued at 190k - 20k cheaper than they had valued it at!!!

The vendor wont budge on the price and still wants 203k out if us! The problem with this is the bank only lend, what the house it worth, we would therefore need to find the additional 13k (as if it grows on trees).

If I was in your position, I would consider the fee paid to the surveyor/valuer to be money well spent. This is an independent valuation (rather than one by an EA / optimistic vendor) and is what you should base your final offer on.

If the vendor really won't budge, I would walk away, but ask the EA to get in touch should their expectations become more realistic.

Cannon_Fodder

Say thankyou to the survey company. They have saved you £13k. Let the vendor sweat over Xmas...expect a phone call in January.

Grindle_2

It all depends on how much you want the house. This is an independent valuation and although this may be the value of the house there may be features that make it more attractive to you.

Was the valuation a free market one or was it a valuation at auction price. This will be lower

Milliewilly

Its not an independent survey it is weighted in the lenders favour.

I expect you have a high LTV otherwise the surveyor would have valued at the accepted price.

Remember everyone these are the same surveyors who were valuing in the boom times if they had some special training to value properly why didn't they value houses at todays values? Because they were told by the banks to get the mortgages pushed through and lend lend lend.

Now the shoe is on the other foot and Surveyors are preventing lending on the banks instructions.

They are not and never have been independent unless you instruct one yourself then they will only ask the local Estate Agents anyway and what do they know about values they only market houses for a living......

G_M

Estate agents don't set the asking price - they may advise but it's the vendor who ultimately decides how much they want to sell for.

Re fees:
Depends what is in your agreement with them. I can't see it from here so can't advise!

Generally getting the mortgage via the EA is a poor decision. Go independant.

zappahey

Milliewilly wrote: »

Remember everyone these are the same surveyors who were valuing in the boom times if they had some special training to value properly why didn't they value houses at todays values?

Because that's not how markets work. Values are not some static number, they are an assessment of a fair price at a given point in time.

hazyjo

G_M wrote: »

Estate agents don't set the asking price - they may advise but it's the vendor who ultimately decides how much they want to sell for.

Beat me to it. Everyone goes for the higher estimation from the EA (or their own) to 'test the market'. They usually end up dropping the price or taking an offer. Do you know how long it was on the market before you offered? Had the price been dropped before?

Also, you might think you got a bargain, but 10% off the asking price is becoming more common in this market. That puts it around the valuation price. tbh, I think they'll take your offer but you might have to leave it on the table and say you're going to look at other properties, then they can come back to you if/when they accept £190k. In the meantime, you might find something even better, and get more of a discount to soften the blow of losing money on this purchase potentially falling through.

Jx

G_M

zappahey wrote: »

Because that's not how markets work. Values are not some static number, they are an assessment of a fair price at a given point in time.

And a house worth £200,000 TODAY can be worth £150,000 TOMORROW if there's a 're-adjustment' of the market/crash! So a surveyor would be 100% right to value it at 200K today but 100% right to value it at 150K tomorrow.

dizziblonde

Ours came back valued at pretty much spot on what we'd agreed for it, but the mortgage company dropped the amount they were prepared to lend a touch because of some issues on the survey they weren't happy with (the usual surveyor's damp prongy thing going crazy routine). Took a while of waiting and toing and froing - but the vendor did drop the price to the mortgage company's figure in the end but it took a good couple of weeks of them and us playing who'd crack first in the waiting game for us to get there. Wasn't quite the level you're facing - we were quibbling over about 1.5k if I recall correctly, but to us it was a fairly large chunk of extra cash to potentially have to find (we could have if we had to to be honest - but it would have required the Bank of Mum and Dad).

The whole house buying process is ridiculous if you look at it coldly - EA tells vendors their house is worth more than it is to get the job, vendors stick their house on at a high price in the hope of getting lucky - and don't, then they inch down and down and down. Meanwhile buyers offer low and inch up and up and up and we end up meeting somewhere in the middle where we all planned to end up anyway! Daft thing with ours was - after all the negotiations - we ended up paying pretty much what was exactly our first rejected offer anyway!