Valuation is lower than the offered price. Your opinion please.

londonlydia

hi,

I know Woolwich/Plumstead very well, I live a few miles away in East Wickham/ Welling.

I think that the home buyers report has come up with a few things as it is a Victorian house, like many houses in Woolwich, and older houses do cause problems. I think I would pay for the additional surveys suggested if you decide to proceed.

However, it doesn't seem you have gone for a building survey, just the homebuyer report- and these arent as thorough(some building surveys quote the cost of fixing the problems too). If there are stage 3 issues on the homebuyer report- these could be very pricey to fix...beyond £10,000...as you mention it is to the external walls. And there are quite a few 3s...I mean some mortgage lenders would probably refuse to mortgage it if they are too serious anyway.

So, I think your decision will rest upon if you think the house is worth it. Woolwich has got a bit more expensive recently due to good transport and the town centre being redeveloped...but personally I wouldn't proceed unless you knew how much you will need to pay out getting the house fixed. And if I'm honest, I think for £190k you could probably get a house in the area without those problems...and avoid the hassle.

KateLiana27

I've never heard that surveyors routinely undervalue properties to cover themselves.

Our surveyor valued our house at the agreed sale price. He phrased it verbally as "I'm happy with the price you're paying for it".

I think that's the crux of it. People often get suspicious as to why valuations so often come out spot on what the agreed price is. But surveyors aren't there to pat you on the back if you got a bargain. They're there to represent your (and the bank's) interest by pointing out if you're being ripped off - because that's what matters.

I'd take an undervaluation seriously, and wouldn't pay more than the valued amount, even if I could afford it.

Caz3121

1) the property was advertised with a guide price as £180k-£190k, was £190k your first offer? what made you go up to the top of the guide price?

2) If the survey is £182k then your mortgage offer will be based on that value and not your offer price, eg if you were planning on borrowing 90% - £171k, they will reduce this to £163.8k or adjust the LTV as the original borrowing, in this scenario, would be 94% and they may not offer this and, if they do, it would be a higher %, so to keep the same LTV you would need to find the additional yourself

3) I do not think the comparison with the house next door is too relevant here, it looks a very different property from the pic and has an additional reception room

you are left deciding whether you are prepared to pay more than the property has been valued at or negotiate with the seller

Kynthia

So it needs major work and isn't worth what you've offered to pay. I think many people would find somewhere else unless they were experienced buyers who planned to renegotiate the price.

Mickygg

Let's remember that a house is only worth what someone is prepared to pay for it. You're prepared to pay x for it, so that's what it's worth.

girl_withno_name

There must be an element of location built into the valuation - the same property in this area (South Wales) would not attract a valuation of £182k. The surveyor will generally be local and have knowledge of the local market and sold house prices.

I guess you might be willing to pay more in the expectation that the area, transport links and hence house prices will rise in the near future... the surveyor will not value on this basis, but on the current value in the current circumstance. Imagine if they valued at £+++k because it's an "up and coming area", which later turns out not to up or come!

kingstreet

At the moment, the figures are not particularly reliable. You need to get your structural engineer's report to establish exactly what the cost of any repair work is likely to be - if there is any.

http://www.findanengineer.com/

Use the dropdown for your area and pick "Surveying: Domestic Proeprty"

In addition, you need to get an independent timber and damp surveyor to report on the property. Don't accept a "free" report from a firm which carries out the work. They want business and may overquote to get yours.

http://www.independentdampsurveyors.co.uk/

Once the surveyor has looked at the reports he's requested, he may decide the value is what you've agreed to pay and that no essential repairs are actually necessary. This process is pretty normal and it's not yet time to take your ball home. If you want to buy an older property, it's a fact of life.

If repairs are required, the reports will give you the ammunition to renegotiate the price - if you wish to do so.

Do not accept the estate agent arranging either of the reports for you.

trulys

Firstly, you should call the surveyor and speak to him. Ask him if he has undervalued it because of the work required, or has he valued it at that based on comparable research. I work for a firm of RICS chartered surveyors and valuers, and they they'd be happy to discuss why they have put a certain value in a report. In the section above the condition ratings at the beginning of the report is a box which gives a brief comment on valuation - yours should have something similar. Sometimes if we think a property is over-priced we would say that the purchase price of £X is full, but not excessive. This would mean that its slightly overpriced but if someone's happy to pay that price, then so be it.

Speak to them, they'd rather explain it to you than have a confused client I'm sure.

kingstreet

Think of your surveyor as a GP. He thinks there may be something wrong but needs you to get a Consultant's view before recommending treatment.

You could pull out, but what happens next time, or the one after that? Like I said, these issues are facts of life on older properties and you may miss out if you don't view the issues in the correct manner.

Your call, though.

trulys

I would say that, before you exchange contracts, you get a structural engineer's report for the movement, and a damp and timber specialist to advise and quote for works required in that respect. Based on your surveyor's comments you will also have to ask an electrical contractor (one registered with the Institute of Electrical Engineers) to advise and quote for upgrading the electrical installation.

All-in-all, it sounds like it might be quite a costly house to look after and maintain.

Speak to the surveyor Monday - a chat often proves very useful and he will be able to recommend specialists to look at the above works for you, if you decide to go ahead. Always get people via recommendation, not just off the internet!

Remember also that you are going to have to get some buildings insurance. Based on the fact that there is evidence of structural movement this might prove very difficult/costly.

If you do buy the property, try and get an assignment of the vendor's buildings insurance, that way the insurer cannot evade liability based on any pre-existing conditions! Do not exchange without obtaining a quote for insurance.