Surveyor Valuation Less Than Asking Price

Purple_Carrot

Hi all,

I'm expecting a bit of a bashing given the thread title, but please can I give some background information before you start kicking me!

We bought our current property at the peak of the market in Nov 2007 for £162,000. We had a home buyers survey carried out at the time and there were no serious issues reported, just a bit of minor damp (not unexpected for 1900's property) for which we had the asking price reduced by 1k. This has since been corrected. The survey stated the property was worth the agreed sale price. The house was in good order, but required redecoration in a number of rooms.

We've now been at the property for over 5 years, and have extensively redecorated the house to a high standard. Improvements have included adding fitted wardrobes to the master bedroom and installing an under-stairs cupboard in the hall. Our tastes are very conservative, and inoffensive. There have been no significant changes in the local area, and houses in our row are in good order.

We're now looking to move, and after having the property on the market for 8 months have just reluctantly accepted on offer of £135,000, a reduction of a whopping 17% from what we paid. We've had a steady stream of interest since being on the market and have previously had offers of £139,000, 137,500 and £135,000. Circumstances and stubbornness prevented us from selling at these prices previously.

Prices in the area according to price indexes have generally fallen 14%.

The buyer's lenders have just had a property valuation that despite not finding any notable issues, has valued the property at 5k less than the agreed price.

The estate agent has suggested that it's because the property is on a main road, with no off-street parking, which makes it more difficult to sell. In addition the buyers are FTB with only a 10% deposit. Both of which make it a higher risk for the lender, and therefore the surveyor has been conservative to ensure he's not sued if the property is repossessed in the future.

This seems totally un-fair, and it feels like the surveyors are effectively controlling property prices for FTB's. It seems like the surveyor is valuing our property based on who's buying it which seems totally wrong.

Is there anything we can do other than bend over and accept the valuation, and sell at this reduced price?

Sorry for the rant, I suspect I can predict the responses to follow....

Thanks

Purple.

Tancred

So, does this mean that the lender will refuse to lend? What are the implications? Can the buyer not negotiate with the lending institution? Maybe they can go for another lender?

If I were you I'd stick to my guns and ask the buyer to find another lender if the current one refuses to 'play ball'.

Purple_Carrot

Tancred wrote: »

So, does this mean that the lender will refuse to lend? What are the implications? Can the buyer not negotiate with the lending institution? Maybe they can go for another lender?

If I were you I'd stick to my guns and ask the buyer to find another lender if the current one refuses to 'play ball'.

I believe the lender is refusing to lend. We're also led to believe that changing mortgage providers is not an option they're willing to consider - we've not been told why.

I'm thinking we should stick it out, my wife however is totally against that idea - she's sick of preparing for viewings having our 18month old son to look after too.

Dan-Dan

Purple_Carrot wrote: »

I believe the lender is refusing to lend. We're also led to believe that changing mortgage providers is not an option they're willing to consider - we've not been told why.

I'm thinking we should stick it out, my wife however is totally against that idea - she's sick of preparing for viewings having our 18month old son to look after too.

Wow , this is exactly waht i meant on my other thread!
really sorry to read of these troubles , a casual "5k" below just to cover their own !!!!!! (dont lend to the couple in the first place rather than screw you???!) sounds like taking the michael to me , but of course i`m no expert in what you can do about it!

james_toney

do you have to move, why dont you stay another 5 years maybe then you will get almost what you paid for it.

when my friend was selling most of the valuations came in at lower than the agreed price. he just had to take the hit,

kingstreet

The lender is refusing to lend?

Because of a £5k downvaluation?

I very much doubt it. The lender will be offering to lend 90% of the valuation, rather than the purchase price, which is normal.

There is nothing untoward or exotic going on here. The surveyor will simply look at sales of similar properties in the vicinity and work out that a lower value is appropriate. I've never heard of a surveyor basing a valuation on a buyer type or the loan to value. What do the sold stats look like? Does your figure still look realistic?

The indeces you mention are a very broad brush for an area, a shotgun approach, where the surveyor has used a rifle with a telescopic sight to value yours.

Your purchaser can appeal the valuation if there is comparable evidence to support the higher figure; perhaps request a new valuation at his expense; or approach a new lender, which will result in a new valuation. This may get a higher value, it may simply see the same surveyor value again, as most lenders use Countrywide, Allied or Esurv.

To proceed with the current one, they have the option of making up the £5k shortfall, if you won't reduce the price.

Purple_Carrot

james_toney wrote: »

do you have to move, why dont you stay another 5 years maybe then you will get almost what you paid for it.

when my friend was selling most of the valuations came in at lower than the agreed price. he just had to take the hit,

We don't have to move, but we're wanting to

a) move closer to family - we've both ended up in the South West where as our familes are in the midlands / north west. and...
b) we're hoping to have another baby in the next few years, and we've already out grown our 2 bed terrace.

Purple_Carrot

kingstreet wrote: »

The lender is refusing to lend?

Because of a £5k downvaluation?

I very much doubt it. The lender will be offering to lend 90% of the valuation, rather than the purchase price, which is normal.

We're just going on what we've been told by the EA, I have no prior experience of this. If you consider this to be unusual, I'll raise a query with them. That's useful to know. Thanks

Purple_Carrot

kingstreet wrote: »

There is nothing untoward or exotic going on here. The surveyor will simply look at sales of similar properties in the vicinity and work out that a lower value is appropriate. I've never heard of a surveyor basing a valuation on a buyer type or the loan to value. What do the sold stats look like? Does your figure still look realistic?

We're definitely on the high side, but then it's an attractive property that needs no work doing to it. The EA has assured us it's priced realistically and has offered details of comparable sold houses in the area.

Tancred

Purple_Carrot wrote: »

I believe the lender is refusing to lend. We're also led to believe that changing mortgage providers is not an option they're willing to consider - we've not been told why.

I'm thinking we should stick it out, my wife however is totally against that idea - she's sick of preparing for viewings having our 18month old son to look after too.

Does the prospective buyer only have a small deposit? I would assume so if the lender is refusing to lend.

kingstreet

Yes. I'd expect the purchaser to receive a mortgage offer for 90% of the valuation, rather than a decline decision.

If the purchaser does request a price reduction, ask to see the mortgage report and valuation to ensure they are telling the truth. If they are, they should have no problem providing you with the evidence.

It will also reveal if this is due to a simple market downvaluation, or if the surveyor feels there are essential repairs needed which will see a higher value after they are done.

You'll also see the surveyor's general remarks on the property/area.