Higher market valuation than agreed price

Pupnik

I've come across valuations pricing the property at less than the agreed sale price but can't seem to find much information about when they price it as higher.

Our valuation came back today- our agreed price is £72,000 which is listed as the 'purchase price/ estimated value provided on application' but there is another figure for 'market valuation in present condition- £87,000' and 'market valuation when essential repairs have been completed- £89,000.' I had been under the impression that they would price it at the selling price unless there was something wrong with it in which case they might lower it, why on earth would they price it higher, especially in this climate?

Even though the valuation now prices the property at almost double what they would be lending us there is still a £2,000 retention until a timber and damp specialist looks at it and the bathroom is treated for damp. I'm a little confused about why they would withold £2,000 when they have valued it so much higher than the sale price.

Anyone come across this before? I do not want to end up in a situation where the vendor/ EA try and increase the price based on the valuation. I do feel like we are getting a good price on the property but I really don't think it is worth £87k in this housing market.

We're first time buyers so everything like this is new to us! Thanks for your help

G_M

If the surveyor thinks it's worth more than you're paying.... be pleased. You've got a good deal.

The retention is only partly about ensuring the pre-repair value is worth what you're borrowing. It is also about incentivising/motivating you to do what are considered to be essential repairs.

jackomdj

The survey is for you, the ea & vendor don't get to see it so they are not going to try to renegotiate the price

motherofstudents

This does happen sometimes and as long as the vendor doesn't see it, then yes, you have done well. This happened to someone I know but unfortunately the estate agent got to know and told the vendor.....end of sale.

Pupnik

Thank you for your replies- good to know that the ea/ vendor don't see the survey, I wasn't sure about that.

I would have thought that if the estate agents did somehow find out they would be quite embarassed at pricing it so low and might not want to let on to the vendor that they messed up- then again, maybe they have no shame I did wonder if they could well have intentionally priced cheaply to sell it quickly as the vendor wants to move out and does not have a chain so is not relying on the property sale to fund another purchase.

So I suppose rather than securing that the property is worth what they are lending me they also want to make sure we don't keep it in such a state that it falls down and thery can't sell it on if the worst happens some years down the line? I didn't think about it from that angle but that makes sense. Thanks again for the replies