Survey results back... House is overvalued!!!

icklejulez

To anyone thats followed my house sale/purchase over the last 8 months(yes 8 months) may of realised I must be the most unlucky person at the moment! I had finally found the house I loved, scrimped and saved to afford it and the surveyor just come back to say its overvalued...

Originally it was on at 139950 and within a few days both myself and another couple kl=loved the house offering asking price. It went to final offers and we went to 143 and was successfull. Surveyor reckons its only worth 135k.

Yes it is lovely, ideal etc but we are worrying about the resale value in 2-5years when we plan to relocate. We know we are paying for the presentation of the house and know theres no way our kids will keep it to the same standard ie cream carpets and furnishings.

If you were in my position what would you know offer for the property bearing in mind our last purchase fell through because of 20k structural damage and our property exchanges and completes in the next 3 weeks!

fivemice

Perhaps not very MSE, but I think I'd just offer the £135K, especially if I was worried about losing the house.

Alan_M_2

This is something I find a little bizarre about valuations.

In a free market economy any commodity is worth what someone is willing to pay for it at that moment in time (see 3G mobile licences, tech stocks in the 90's etc).

I realise the surveys are designed as much to stop fraud as anything else, but really that's to stop someone telling the mortgage company the house is worth £300,000 when it's actually worth £150,000.

The difference between £135K and £143K is no more than sentiment, not factual value - as in reality you are willing to pay £143K.

Discuss.......:)

Amitoocautious

Personally looking at land registry figures (well for round here) i would say house prices are at best staying constant and in the case of detached are falling. We are umming and aahing about buying now but we plan to stay in the property for minimum 5 years so at least if we overpaid it wouldnt be such a big deal. If its overvalued and like me you think house price growth at best will be minimal then its unlikely you will recoup your costs in the time frame you are talking about

icklejulez

Id just like to thank everyone for their advice, some good points Ive taken onboard. Ive decided to go in and offer 138k to EA on the basis I was prepared to go 3k over what I presumed the value of the property was. Therefore 138k is now 3k more than the valuation of 135k. We are only able to go ahead with this sale on the basis that we have a deposit of 42k and if we did not have this available the mortgage application would of been refused so we are risking our savings. We have seriously considered this offer and compared recent selling prices and similar houses in the area and feel that based on the information we now have this is the most we can offer. We would like to know the outcome of this offer within 24hours as we would then be continuing our search for another property.

Does this sound reasonable or like Im trying to get a reduced price?

shelly

I agree with Alan M, something is only ever worth what someone is willing to pay for it. You obviously thought the house was worth 143K to place that bid in the first place Its worth that TO YOU despite what the surveyor says. What if the other couple allow their highest bid to stick? You will lose out. Personally I'd stick with my final offer.

silvercar

depends how much you want the house; you know someone was waiting in the wings, so reducing your offer could mean you lose the house.

that said I'm surprised that a surveyor has downvalued it, given that you are not applying for a 95%+ LTV mortgage and there is no need for the valuation to be so cautious.

icklejulez

Apparently he really looked into the value of the house and rang several agents in the area. I understand that the other couple are first time buyers so I am presuming that odds are (Im a mathmatical type of girl) they do not have a large deposit perhaphs 5-10% thus meaning that they too will be unable to secure a mortgage on the property. I love the house but I want to make sure I will get the cash out of it when I come to sell after all without that I will be unable to relocate to where I grew up in a few years time. The house is worth 143k to me but thats because where I am looking everything is grotty and rough. This house was in a quiet cul-de-sac and all the original features restored etc.

Am I being to cautious?

HugoSP

I have been in a similar situation.

My advice is to be hard nosed about it. Hide behind the mortgage co. Don't let the EA or seller have any information about what mortgage you're going for but explain - as I did - that the valuation and the fact that you're borrowing maximum loan to valuation etc means that you cannot pay the original subject to survey offer.

This is why you have to either renegotiate or pull out.

My guess is that the vendor will meet you half way.

In my case the vendor had received one offer of around £130k, which I matched. The other party wondered off. I got the survey back at £105k!

I went back to the EA and explained my predicament about the max load to valuation and max deposit we could put down. I offered £10k more than the valuation, and it was accepted, which was great, as the stamp duty threashold had just gone up to £120k that week!

MUSTBEFUNNY_2

Hi

we paid "over" the mortgage company's valuation of our house ....if WE hadn't someone else wld have.....5 years later we've made 150k and I'm glad we didn't believe that valuation.;)

sarahlouise210

when I bought my first house our propety was valued at under the asking price by £5000 - the house was perfect..in our price range everything else was grotty - we offfered the full price - because we we first time buyers we could not get all the mortgage - so took out a "car loan" for the rest and paid in cash! it hurt in a way --- but not as much as someone else getting the house!!