survey valuation less than i'm paying?? bit of advice please.

calicocat

Hi,

I am new to buying a house. Valuation and survey has just come in today and valuation is quite a bit under what i'm going to be paying.

This isn't a problem as my deposit is enough that the mortgage finance isn't effected, i'm just wondering if this is normal or often happens.

The survey hasn't particularly highlighted any major problems, so they aren't knocking money off due to work being needed to the property.

Is it simply a case of (as you see on all the house progs) that blokie A can value at one price and blokie B can value at 15K higher or lower.

Just wondered if this is something I should be concerned about. The difference between valuation and offer is 10K which seemed quite big to me?

motherofstudents

I would tell the vendor about this and say you want a reduction. I'm sure ykou wouldn't want to pay more than the house is worth. If you do, then just carry on as it isn't going to affect your mortgage. I couldn't bring myself to pay over the valuation and remember it is likely to happen again with other buyers if you pull out.

monty-doggy

My valuation came in at 3.5k under offer. My lender as far as i know was happy to still lend the full amount, but some lenders won't and you have to fund the shortfall.
In either case I was a bit cheeky and told the EA my lender will only give me 164k not 167.5 and the seller dropped the price.

Worth a try?

poormaria

If a property is down valued by the surveyor, no matter how little, you should ask the estate agent for a reduction. They may ask to see the report which is fine as long as you are happy with it. The worst they can say is no and in 8 years experience, I've only had one who wouldnt reduce to the surveyors price (as they couldnt afford to move). Worth a try and if they say no, say you want to meet half way

poormaria

And the lender looks at the loan to value, if your rate/product hasnt changed then you probably werent near a product range edge. Eg. If a client had 10 deposit and they were in the same situation, the lender wouldn't go ahead without changing the product or reducing the borrowing amount

calicocat

I don't even understand the thing.

Valuation is 10K under, but "reinstatement" of property cost is 3K under (which i'm assuming is cost to rebuild? )

I had to fight to get it, there were 5 other people prepared (at the time) to pay that money for it....but I do wonder at saying hang on it hasn't been valued at that and trying to knock a couple of grand off. it's a toughie to know what to do but I did get a shock to be honest.

However, anything is worth what people will pay for it, I like the house, it doesn't need to make money to re-sell as would either live there for good or rent out.

I just wasn't expecting that and wondered if it was something that often happens as it did freak me out at first.

Thanks for replies.

calicocat

poormaria wrote: »

And the lender looks at the loan to value, if your rate/product hasnt changed then you probably werent near a product range edge. Eg. If a client had 10 deposit and they were in the same situation, the lender wouldn't go ahead without changing the product or reducing the borrowing amount

Hi,

The loan to value I don't think will apply as what I am putting down is 2/3 of the value so would be a tiny mortgage...if I have understood you properly. I am rather a novice at this.

Thanks.

EDIT...however I do take on board people's comments about the valuation, and this was my gut reaction too. the problem is, if I go for a reduction do I lose it, knowing that there were 4 others at least wanting it, silly question I know as only I can make that decision, but I think I will let EA know in the morning and see what happens.

monty-doggy

Even if four others want it, they would likely all get the same valuation at survey, the seller will know this so it's worth asking. You can always agree to pay it if they say no.

Yes the reinstatement is rebuild. Mine was 20k less! Good for insurance purposes.

dominoman

We are in the same position. I know we have overpaid, as several other buyers were also chasing the property.

The valuation comes next week and if it is lower than what we offered I will use that to ask for a discount (maybe split the difference). In a way I will be using the valuation to help negotiate back to nearer what the house is worth.

I don't mind overpaying a bit as we will stay there for several years.