UPDATED: Nationwide valuation lower than offer, but mistakes on surveyor report

Carrotline

Had our valuation earlier this week. Just phoned Nationwide to find out the results and been told Countrywide have valued the house at £195,000. We offered £215,000.

As a bit of background, the property we're buying is being done up by a developer, who has redone the electrics, gas central heating and damp-proofed it all. However, every time we've viewed it, it's looked like a bomb site.

Last time was a month ago, and the kitchen and living room were still in a state of disrepair. We've been assured, since then that work has continued, so I'm wondering if the work hasn't been done and that's why the valuation has come in low.

Either way, what should our next step be? We're first time buyers and largely clueless.

amnblog

Nationwide are traditionally conservative when valuing new properties but having said that the difference between £215,000 and £195,000 should be a real concern - this is nearly a 10% difference.

If you wish to proceed you should talk to the developer about reducing the price in light of this.

Nationwide will only lend against the valuation, so if for example they were lending 90% of £215,000, they will now only lend 90% of £195,000. You will have to make up the balance of the purchase price cash.

If you cannot get comfortable with the price agreed against the valuation figures, be prepared to walk away. You will find a better deal and a better property.

amnblog

Incidentally, messy builders generally mean little concern and respect for the resultant work.

kingstreet

If the valuer was concerned about the stage of development, there will be a current value, in present condition and a future value, after works are completed.

Are there two figures?

Carrotline

Not sure if there is more than one figure, as our mortgage consultant is not in work until tomorrow and the amount of information the call centre staff could provide was fairly limited.

kingstreet

I must say, last time I has something like this, the owner was building an extention and our Nationwide BDM told me to hold off the application until the work was done in case it upset the valuation.

However, this was a remortgage, rather than a purchase.

Carrotline

It's a difficult one to gauge how the seller is going to greet this news, as they were originally pushing us to complete within 28 days of our offer being accepted (!), which would have likely left us with a half finished house to live in given his work rate.

I'm fairly resigned to the fact that we're probably going to lose it, as I just cannot see him being prepared to accept a lower offer and there's no way we can afford to stump up the shortfall.

Carrotline

Right, we've received a copy of the valuation. All the right boxes appear to be ticked, and there is no mention of any issues that would affect the price and - in turn - no explanation as to why the valuation is £20,000 is lower than our offer.

Only thing we have spotted is, where it asks, "has the property undergone any recent refurbishment," the surveyor has said no. But the property has.

Also, report claims there is no off street parking at the property, but there is a parking space (and drive) right outside and - as it is a terraced house - there are cars parked out in front of each house along the road in exactly the same spot.

Would we have any grounds to contest this? Starting to feel like we've been conned out of £300 here.

Carrotline

Anyone got any advice they can share with me on this?

GMS

Carrotline wrote: »

Starting to feel like we've been conned out of £300 here.

If you have paid £300 for a survey which has shown you were about to pay 20k over the odds for I would say it is totally the opposite of being conned.

You could try to challenge the valuation but this would need comparable sold properties in the area recently. Even then it is difficult to get a surveyor to change their minds.

Why not renegotiate the price with the vendor? After all the next buyer will find themselves in the same situation potentially.

Thrugelmir

Carrotline wrote: »

Would we have any grounds to contest this? Starting to feel like we've been conned out of £300 here.

If you overpaid by £20k for the property (plus interest on top). Then you may consider the £300 well spent.