Mortgage valuation lower than our offer - what to do?

HECTOR86

WE ARE FIRST TIME BUYERS AND ALL THE PROCESS HAS BEEN A COMPLETE NIGHTMARE- PLEASE HELP::eek:

We have found (and had offer accepted on) our "dream home".
We had our own buildings survey done last week on the place we want to buy - as result the house has been valued 30K less than the agreed price.

The report has shown several issues that if I buy the house at the current price I wouldnt be able to pay as we are putting all our saving towards the deposit.

Can you please advise me on the best opttion to undertake ...we are very stress about this ..but if a professional survey report has established that the house that I want to buy is valued 30k less than the asking price I MUST TAKE SOME ACTIONS... PLEASE HELP :T

purcel

Don't buy it? Go and find another one!

G_M

Or buy it with a reduced mortgage, which means

a) finding extra cash to make up the balance and
b) finding extra cash to undertake the repairs

Or negotiate a lower purchase price.

What are the £30K works?

And what does £30K represent? 10% of £300K price? 5% of £600K? 20% of £150K?

cajef

Just what actions do you expect to take, the choice is get the vendor to do the issues the survey has highlighted or reduce the price by 30k but you will still have to do any repairs and you state you have no extra money available, or pull out and look for something else.

thelem

Go back to the vendors with a new offer £30k lower, citing your survey. If they accept you've saved £30k, if not then at least you aren't overpaying for the property.

Regarding the work the survey has mentioned, some of it will be essential and must be done now, others will cost more if not done now, and some is just a nice to have. Think about what work falls into each category and therefore what work you'd want to do immediately. Take any prices mentioned in the survey with a pince of salt - surveyors are not tradesmen, so they don't really know what something will cost to fix and often err well on the side of caution.

Building_Surveyor

do you have a copy of the valuation?

surveyors do not normally specifically price the work - well i dont and normally any mortgage valuation will state that estimates need to be gathered from the relevant qualified tradesman, there may be a rough guide cost. i don't know any surveyors working in this capacity who would start quoting for work.

the survey should recommend ESSENTIAL work to be carried out if any. Could be something minor like a gas survey or could be something essential like DPC needs installing. Essential work will be differentiated from the rest.

The surveyor does not advise on how much money the bank should lend, that's entirely up to them.

If no work has been highlighted, then the property may not be worth as much as the vendors hoped it would.

Your only options here are to make up the shortfall, reduce your offer and hope for the best, or walk away.

ruggedtoast

You can try another mortgage provider, but you may just end up with the same surveyor.

Really what this thread needs is... A Rightmove link!!! :T:T:T:T:T:j

kingstreet

I would expect the essential repairs are suggestions, which may (or may not) be required. If you are instructed to obtain reports and estimates, do that and you may find the essential repairs are not as essential as you think. Instruct independent surveyors for things like timber & damp work, as asking a contractor for a "free" report is more likely to see work needed. Otherwise, how would they make a living.

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

Following the receipt of the reports and estimates, the surveyor may revise his valuation and reduce/remove any retention.

I wish someone would advise buyers about this issue during the mortgage/sales process. I know I do it for my clients, but it seems those who go direct, or via EA advisers, get no guidance and read their survey/valuation and assume it's a done deal and all over for them...

florence4

Thanks kingstreet, that's useful advice that may come in handy... I had a mortgage valuation yesterday on the house I've lived in for 20+ years, and from the noises the valuer was making, am expecting him to value it at a lower figure than any of the three EAs' valuations, and lower than I'd hoped... I didn't realise I would be able to challenge his valuation, so it's good to know I can - for instance if he highlights any things as 'possibly needing work', which I have recently had work done on (specifically damp cellar tanked, new condensing boiler fitted and some new electrics).

Hector, it's not clear from your post whether you had a mortgage valuation or a full building survey - you use both terms but they are quite different.

Put simply, a mortgage valuation is for the mortgage company to assess how much of their money they want to put into your house - it's their very basic judgement of risk. They won't actually have looked at most of the things they highlight - so for instance, if they are saying 'damp might be a risk', they are not necessarily saying it is, just that it might be, given the age/condition of the property, and they don't want to take the risk. You can (as kingstreet just told us!) prove that it isn't, in your case by asking the vendor to prove it with other/previous/recent survey reports, or by putting it right.

On the other hand, if you had a full building survey, then it is likely that the things highlighted actually are a problem. In this case, you have the option of asking the vendor to put right the problems, or reducing your offer, or pulling out, if the problems identified feel too serious for you to want to take the risk.

Good luck!

kingstreet

A mortgage report and valuation will normally see two figures. A value in present condition and a value after essential repairs.

If you obtain any requested reports & estimates and they conform no work is needed, the surveyor will then apply the higher value to the property now.