How often are houses undervalued by the survey?

AAS

Hi

We've just pulled out of buying a house due to the mortgage company under valuing it due to work that needed doing - roof repair, chimney repointing & repair. They also wanted reports on damp and electrics which we would have had to pay for and felt it was likely from what the surveyor had said to add to the list of repairs.

We had saved enough for the deposit plus, mortgage fee, solicitor fee, insurance, survey but had very little left so couldn't meet the difference between what we had in cash and the £5k the mortgage company wanted to hold back until work was complete. I thought, stupidly I guess, they would lend us the amount in it's current state and then say we had to get the work done within a set time.

How often does this happen? Have we been unlucky or do we need to save another £5k as this is likely to happen with other houses. We've now lost £1.5k on surveys, fees etc... so will take us a year to save another £6k so just wanted to know have we been stupid or unlucky or both!!!

Thanks for reading.

BitterAndTwisted

I think you've been unlucky. I'd say that a lot of mortgage valuers are being extremely cautious at the moment as it's a falling market and who knows how much further prices are likely to fall? Maybe they've done you a favour

Plans_all_plans

Hi, can I ask what the asking price was and what your accepted offer was?

AAS

The asking price was £155k, our original offer was accepted at £150k after a long wait, we then got them to agree to £145 after the survey but the mortgage company wouldn't budge and we had to walk away - the valuation said it would be worth £152k once the work was done.

mikthe20

Did you not ask the vendor to reduce the price accordingly OP?

AAS

Yep - as above from £150 to £145, but it only helps if you have the cash anyway as the mortgage company would withold £5k whatever price we paid. I thought they would be ok if we got the price down and agreed to do the work but no.

TheSaint_2

That happened to us too - real nightmare! We got the house a lot under its market value - yet they still insisted on holding on to some cash until we had repaired the faults. We still bought the house though, got the money back within 2 months. As others have said they are just being over cautious. If you think you got a bargain for the house you should try to get the money from family as quick loan

poppysarah

Think of it not as undervaluing by the surveyor but overpricing by the seller.

kingstreet

If you got the reports/estimates/quotes done, you might have found the cost of the repairs was nowhere near what the surveyor recommended as a retention.

In those circumstances, the surveyor would probably have lifted the retention or reduced it (eg Abbey won't hold a retention of less than £2,000 IIRC) and the purchase could have continued.

People looking to buy older properties should factor-in obtaining reports and costings as they are a fact of life. They can be a deal breaker, but in some circumstances they can make a deal as they demonstrate to the vendor you've done your homework and any future sale could be similarly affected if you're allowed to walk away.

In my years as an advisor, I've arranged timer and damp, wall-tie, structural engineer, roofing, electrical, gas, sub-floor infill, all kinds of reports on properties my clients were buying. I've always seen it as part of the service and I'm pretty sure I've helped clients get a few quid off the price of their home by getting all the information needed to convince the vendor to negotiate.

AAS

Yeah I know we probably should but it's just been such a bad week - my partner's car had to be replaced as it was beyond repair and then our fridge freezer broke so we've just shelled out over £1500 sorting that out. Maybe it's not meant to be!

tristinh

Thought I was reading about our situation there, but the valuation came in a whopping 25k under agreed purchase price PLUS a 10k retention for roof, chimney & damp. We were expecting the retention, but not the valuation!! Seller dropped by 15k, but we still can't do it. Hoping they will drop again, but I doubt it!

I did feel the valuation was a little cautious on the surveyors part, but he is there to protect the mortgage company - and us. He is the expert I guess!!

Hope yours gets sorted!