Surveyor undervalued our house by £15k (Arggh!)

Legacy_user

Our buyers undertook a basic mortgage valuation. The results of the survey were that they recommended the bank only lend £200k to the buyer against the property (£15k lower than the accepted offer).

Does this mean the house is only worth £200k on the open market or is it that the surveyor is being over-cautious on the bank's behalf and covering their exposure on any future house price drops?

At the same time, the survey we have done on our intended property (Homebuyer's survey) has also come back stating their valuation is £25k lower than our accepted offer.

My main questions are these - is the Homebuyer's survey telling us the actual market worth whereas the basic mortgage valuation only states what the bank should advance as opposed to the market value?

Secondly, we don't think the valuer's assessment is fair on our sale property(if it does indicate market value). There are many other examples in our locale with similar prices and even assuming 95% offers being accepted they are still higher than £200k. Is there anything we can do to counter their assessment (e.g. complain to RICS)

Cheers MSEers, I hope you have the advice we need!

PROFESSIONAL_LANDLORD

Surveyor's opinion ! another could easily value more or less , Few months ago had a survey carried out by collliers (HBOS) for a BTL under valued at least £15000 ! In Scotland Surveyors play ball with estate agents ( within reason ) If they diden't, buyers would have to find bigger deposits for their purchase , E A would lose their fees and they would not get instructed. A FARCE


Don't think there is much U can do.

olly300

balfralf wrote: »

Does this mean the house is only worth £200k on the open market or is it that the surveyor is being over-cautious on the bank's behalf and covering their exposure on any future house price drops?

A mixture of both.

Surveyors have to investigate the actual sold price of similar properties in the area and allow for house price inflation. So in your case there may of been one or two very similar properties that sold within the last 2 months for 25K less than the price of your house is valued at. (This happened to a friend approx. 7 years ago. She had to increase her deposit to cover some of the short fall.)

balfralf wrote: »

My main questions are these - is the Homebuyer's survey telling us the actual market worth whereas the basic mortgage valuation only states what the bank should advance as opposed to the market value?

All surveys have a market valuation aspect for the bank.

The bank doesn't need to know the particular faults in the house unless they are so major which will then decrease the value of the house i.e. subsidence, property made of concrete. The bank just needs to know that that if the people (you) they lend the money to default they can get all their money back.

balfralf wrote: »

Secondly, we don't think the valuer's assessment is fair on our sale property(if it does indicate market value). There are many other examples in our locale with similar prices and even assuming 95% offers being accepted they are still higher than £200k. Is there anything we can do to counter their assessment (e.g. complain to RICS)

You can't but some estate agents manage to. I suggest talking to your EA.

Professional opinions are just that professional opinions. The majority of people who make professional opinions can back up their claims.

Have a look at the house price sites e.g. nethouseprices.com to view land registry prices. (They are out of date due to the time it takes for properties to get on the land registry.)

nelly_2

There 1 thread a week like this now on here.

Mark_petty

I had a similar issue with my old flat.

We agreed to sell it for £195k but there mortgage valuation came back as £170k (£25k short)
We had 3 people who wanted the flat at this point all willing to pay £195k so it was very frustrating.

The buyer kept saying we had to drop the price. I said to him he either goes through another lender or we sell to someone else.

In the end he went through another lender and it was valued at £195k

They lost £250 on the valuation fees but they got the flat in the end.

So to cut a long story short if you believe it to be worth x amount DO NOT BUDGE ON PRICE

Do what I did and get print outs of similar properties going for more etc and hand it over to your buyers

helenandkev

I have my home on the market at the moment and have had a valuation recently done on it. I obtained a copy of the report and it has been undervalued by £9,000! Now either the estate agents where I live have got the prices all wrong or the valuers are trying to drive the house prices down on the market. I can only guess how they have arrived at their conclusions as they will not divulge, my guess is that they are basing it on 2 sales of houses which are not the same size house and were both repossessions and in a bad state of repair.

You would think in the current property climate that they should be trying to encourage people to buy decent homes, not stagnating it.

BitterAndTwisted

They don't care about that and I really don't think they should in any case. All they care about is protecting the lender's interests. What would you want if you were a lender, lend £200k on a house valued at £180k in a falling market? I know I wouldn't!

ILW

Much of the current credit crunch and recession is down to banks lending on overvalued property (here and in the US). I can see why they are being a little cautious now.

LandyAndy

helenandkev wrote: »

I have my home on the market at the moment and have had a valuation recently done on it. I obtained a copy of the report and it has been undervalued by £9,000! Now either the estate agents where I live have got the prices all wrong or the valuers are trying to drive the house prices down on the market. I can only guess how they have arrived at their conclusions as they will not divulge, my guess is that they are basing it on 2 sales of houses which are not the same size house and were both repossessions and in a bad state of repair.

You would think in the current property climate that they should be trying to encourage people to buy decent homes, not stagnating it.

They haven't undervalued it.

They have valued it. You just don't like the value.

PasturesNew

I think you can write £10k off most prices ... EAs 'value' properties above what they're worth, expecting people to offer less and the butter up the current owner so they get the business.

On the telly EAs always say stuff like "market it at £190k ... to try to get £180k ...." and similar.

Congratulations on resurrecting a 3 year old thread though
I thought Nelly was back!

LandyAndy

PasturesNew wrote: »

I think you can write £10k off most prices ... EAs 'value' properties above what they're worth, expecting people to offer less and the butter up the current owner so they get the business.

On the telly EAs always say stuff like "market it at £190k ... to try to get £180k ...." and similar.

Congratulations on resurrecting a 3 year old thread though
I thought Nelly was back!

:rotfl:So did I.:rotfl: