Survey gives lower valuation than agreed price;

Seanymph

We are looking to buy a property that needs work to increase our investment. However we wold like to live in it whilst we do the work.

Our house has sold - and the process is going through.

We found a house on the market for £175k. The people selling bought it in Feb of this year for that price. They have decided to sell again, and I have heard a number of reasons why.

We offered £168 and agreed on £172k. We knew we would need a lot of work doing, but instructed a full survey in case they were selling because of something really serious.

The survey has come back with extensive works, I learn not only is it in a conservation area, but an Article 4 area! And the valuation is £155k.

Now I feel awful going back to them to renegotiate the price - it was obviously a property that needs work, so it isn't news that the valuation is poor, and I know they did pay £175k.

I don't want to lose the house, I like it, but it's going to take a lot of work, and the valuation has thrown me.

I need help to straighten my head out before I call the estate agents please?

jc808

ok:

1) survey coming back lower isnt necesarilly a bad thing. puts you in a good negotiating position

2) are you getting a mortgage? can you get a mortgage on this house? (note lenders sometimes dont lend on houses that have changed hands within a year/ need extensive refurb)

3) if youve heard a 'number of reasons why' theyre moving it potentially smells a rat...

4) 'extensive works': like what?

Seanymph

thankyou.

no mortgage - cash purchase funded from sale of mine.

I have heard they are professional property people and employ two builders - didn't get a survey. That they bought it as a holiday home and don't have the time for the work needed. That they have financially overstretched.

Re-roofing, new windows throughout. New boiler and probably entire heating system. brickwork needs tying back in at rear. damp problems (no guttering functional), but that could be for worse reasoning, bargeboards throught need replacing. chimney stacks need repointing. It's a shed. I knew that though - although didn't expect it to be AS bad, wet rot is not a phrase that one likes to see in a survey However there is no movement, structurally it's sound, but it needs new kitchen/bathrooms, new fuseboard, electrics checking, new doors....

However it was priced as a 'renovation project'. it went to auction in feb and didn't sell - they bought it for £175k after the auction (without a survey). They put it back on market for the price they paid.

jc808

fair enough

just wonder if the different stories on reasons for selling indicates theyve found something theyre not disclosing?

your survey sounds pretty comprehensive though

Seanymph

that was my worry - which was why I had a full survey. I think he was fairly good though - and as there is no furniture, carpeting or tiling on floors he had pretty good access!

There are even areas where they have taken the ceiling down and he could see the joists underneath!

I wasn't expecting QUITE as much work, I knew there was work of course. But it's the valuation figure that has thrown me.

So I need the support of the MSE members here to give me the courage to take it to the EA's and try to negotiate again. I feel bad about it. But reading just this realise how silly that sounds.

david29dpo

Have calculated the cost of works? What is the aprox value when finished?

zappahey

Seanymph wrote: »

There are even areas where they have taken the ceiling down and he could see the joists underneath!

Is it possible that the work they have started has actually lowered the value, e.g. opened the ceilings, etc?

Perhaps it was basically intact before and now there is more work that must be done.

Of course, they may simply have overpaid.

Seanymph

Top value will be £235.00.

I haven't valued all works - but roofing £12k, scaffolding £1k. Boiler and associated £5k. Windows £10k (at least - three bays). the rest will be ever mounting smaller costs and self buildy type things. Add in two planning applications mind you - and the damp. That could be as easy as new guttering and opening up the airbricks from vegetation, or as sinister as collapsed clay drains further down a long run which would remain my responsiiblity because it's on an unadopted highway.

The ceilings in those parts had to come down - because they were under leaky toilets and the like. So they won't have devalued it in ripping out carpets, exposing wet rot etc. But they obviously started doing the job.

I guess that's the bottom line - they overpaid according to valuation.

However, someone else offered £175 and the seller turned them down, went to auction and didn't sell - then these people bought it for £175k.

I now have £172 agreed and going through (so they took a loss which is strange huh?). But the surveyors valuation is clearly and in black and white £155k.

evansmummy

Speaking from the other side (i.e sellers) valuations done by someone who doesn't know the area and uses nethouseprices.co.uk as a guide are really annoying. We were undervalued by £20k purely because two houses on our street sold low due to being bought by developers as they were in near derelict state. The fact that 2 agents in our area all priced the same wasn't considered.

pinkteapot

You're a cash buyer in a very bad market. They obviously feel they've made a mistake buying the house and want rid. With the survey report you are in an excellent position to renegotiate price, even if you don't go as low as the valuation.

If they are professional property people I very much doubt they would have bought it without a survey. Unless they're inexperienced developers. Anyway, the point is, it's not like it's an elderly couple who poured their life savings into it and are now penniless. Don't overpay because you feel bad. :money:

Seanymph

Thanks pinkteapot - that's exactly what I needed to hear!

I think they also run a business, so it's a 'hobby'. And I know that they didnt' have a survey, they just had their builders in there, because I know the person who sold it to them in the first place AND I've spoken to her about it.

evansmummy I'm sorry that a valuation worked against your situation, but can assure you that I'm not having a mortgage, so it isn't a multinational valuing it. I have got a local, trusted, recommended RCIS surveyor to do me a full building survey. In fact he lives several miles away and has for years. He was also in the property for about three hours - I spent one hour there with him - and the report is thorough and comprehensive.

It's not a 'valuation' report, or a 'homebuyers' report - in fact, I didn't expect a valuation it was a surprise. But I know he values property for the local council, and does reports for their grants too.......... he's a respected individual who works for himself.

Like I say, sorry it happened to you, but I think I've done as much as I can to come up with a fair survey.

*he's also recommended a damp/timber specialist, a drain specialist, an electrician and a boiler specialist *