Surveryor undervalued house

littlesos

Hi,
I'm after some advice please.....
We're buying a house not far from us, it was on the market at £315k, we offered £295 and were turned down, we went to £300 and were accepted.

I've just had a call from the mortgage people who say the surveyor has valued the house at £285k. Now this isn't a problem mortgage wise as we only wanted to borrow £125k, but now I'm not sure about the house.

We won't get the homebuyers report till Monday probably, so I won't be able to see if there is something specific wrong, or just the surveyors opinion.

Should we go back to the vendor with an adjusted offer, bearing in mind that she already turned down £295k????

I've never bought a house "properly" before (this house was a new-build) and it's all a bit alien to me.

Thanks

Rachel

shell2001

Well guess you are lucky in that you dont need it to value up to the level offered inorder to get your mortgage but you have to think about resale value. I would wait and see what the HB report states and then go back to the EA, personally I would have thought they would have to negotiate down. If they refuse to be flexible and loose you the next purchaser may need a higher level mortgage and therefore be refused finance.

Maybe phone EA with your concerns and say you will be in touch once you have the full HB report. At least this way the vendor will be aware that your offer level may need to drop and have chance to discuss it. Or if you can stand it wait until the report comes and find out exactly what the issue is and then approached the EA (think I would go down this track myself)

straddie

If the vendor turns you down she's only going to find herself in the same boat when the next buyer comes along, has their own valuation done, and gets given the same news. How about offering something like £290k on the basis that whilst it's less than she wants, it's more than the surveyor valued it at.

MustStopSpending

I have come accross this a lot recently. I would wait for full survey report but then also speak to your agent and maybe another agent for some third party advice. It is sometimes the case that the surveyor may be from out of town and not know the market well. Living on the Isle of Wight surveyors come across from the mainland, not knowing the local market and down value for no reason.

https://www.nethouseprices.com will show what other houses in the road have sold for. Also see if your agent has any comparable properties that have sold recently.

Then it is just down to whether you are willing to pay more for the house than your surveyor advised.

Good luck!

Melissa177

A house is worth what someone is prepared to pay for it, no?

If you are prepared to pay £300K for it, it must be worth it to you.

King_Of_Fools

Melissa177 wrote: »

A house is worth what someone is prepared to pay for it, no?

Not to the mortgage company. The house is worth what it is valued at which would be a guide to what they could get back if they repossess the house.

No mortgage lender would lend you £300k on a house that has been valued at £285k!

danm

the next buyers suveyor might think otherwise so not safe to assume that will need to lower their asking price to sell it.

Valuations i'd pretty much take with a pinch of salt. Do some research in the local area and try to guage a value based on that information as to whether you are paying the right price for the property.


[QUOTE=No_mortgage_lender_would_lend_you_£300k_on_a_house_that_has_been_valued_at_£285k![/QUOTE]

125% mortgages??

Tiger_greeneyes

It also could be that someone entered the purchase price as £295k in the box on the mortgage application form in error or it could be that the house was over-valued by the estate agents to get the instructions to market it.

As you're not sure why, at the moment, then there's not much else I can add, except if the surveyor won't budge on the valuation, then I see it as your options are to:

1. pay the £300k
2. offer the vendor £295k
3. ask the vendor to split the difference
4. offer £300k with a view to splitting the difference

Surveyors are professionals and seldom get things wrong - although they're still human and mistakes can be made.

After all, you don't really want to be paying over the market value of a property do you? Not unless you really, really love it...

littlesos

Thanks all,

Got my mitts on the report this morning, and there are a few things we hadn't noticed.

He has found damp in the bathroom and has concerns about the two upstairs rooms (it's a dormer bungalow). The floor seems "soft" in the upstairs rooms and he has mentioned that the joists may not be sufficient to hold the load of the conversion. I noticed the squishy floor myself.

The decor is very 1960/70's : avocado bathroom suite with a huge corner bath! and the wall between the kitchen & dining room had been removed and a stone clad arch put in! Swirly very patterned carpets everywhere, and artex even on some of the walls!

Now I don't mind the decor, it's only superficial and I can rip it all out, but it we're going to have to have the joists replaced/increased and the roof may need looking at then I'm not sure whether I want to pay £300k.

To be honest I don't "love" this house, it was just the best one we've seen so far, and we're in a hurry to move cos our buyers want to be in here by the 13th April!!!!

All in all there doesn't seem to be anything that jumps out of the report, I think we will be going back to the EA and asking them to renegotiate the price downwards, as now I'm not that sure that I'm happy to pay £300k, and if we lose the house then so be it, we'll go into rented.

As for being worth £300k because that's what we were willing to pay, well I don't agree. Our offer was based on the fact that we would have to redecorate, and make changes we chose to (fitting another bathroom etc) It wasn't based on the fact we would have to fix the existing structure up first, and reroof the entire double garage and possibly the house.

Just checked nethouseprices, and nothing has sold on this road since 2004, so there's not much to compare it to.

Thanks all for your input.

Rachel

lypsey

Melissa177 wrote: »

A house is worth what someone is prepared to pay for it, no?

If you are prepared to pay £300K for it, it must be worth it to you.

Melissa , that is one of the stupidest thing I have read on these boards , when are people going to realise the EA's are overvalueing to get more commission . The market is at its peak and about to go over the edge. Any valuer worth his salt is not going to over value at this stage . The bank with have his guts for garters if they have to repossess .
If I were in this persons shoes I would be bidding 260k-270k

Prepare yourselves for the biggest housing crash in UK history . It has started in the US , France , New Zealand , parts of Australia etc

Good luck

Tiger_greeneyes

lypsey wrote: »

Prepare yourselves for the biggest housing crash in UK history .

Is that just based on the idea that corrections are going on elsewhere? It's not set in stone, as far as I'm concerned and tbh, I think statements like that just panics people imo.

We've been hearing the same thing for the last ten years and it's not happened yet!!!

The best thing you can really do to prepare yourself is to not overstretch yourself financially in case the interest rate rises a few percent and bear in mind that you may have to stay put for a few years to ride it out. You may be in negative equity for a few years but so will many other people. It's really not the end of the world.

Estate agents don't overvalue to get more commission - £5k extra on the asking price is neither here nor there. It's more to do with pitching above the local competition to win the business - a bit like an auction.