House purchase low valuation

billynbk

Hi,

Please can someone keep me some advice.

I put in an offer on a property for 205000. The original price was 210000. The valuation has come in at a staggering figure of 150000. I was shocked at the huge difference. There are no defects in the property. The valuation report stated that there was no justifiable evidence to indicate that the property had a valuation of 205000.

Firstly, I know survey valuations can come in lower than the offer price, but what is the average percentage one would expect them to come down by?

Can I bring this issue up with property ombudsman stating that the estate agent deliberately misrepresented the marketing value of the property.

The vendor (according to the EA) is wanting the sale close to the original offer based on the high rental yield of the property.

If I have to increase my offer. What % increase above the valuation price seem fair sensible?

Any advice anyone can give would be greatly appreciated as the whole thing is causing me a bit of stress.

DRP

Have you done your research on sales in the area?

Presumably the valuer has done this and found similar homes that sold for £150.

If you think the valuer has made a !!!! up then I would speak to the valuer and the bank... (after getting evidence together)

billynbk

thanks for reply. I did some property research and suspect the valuation is quite close to being accurate. A sale of an identical property on the same street in dec 2012 was around 130k. The EA has vastly overpriced the property as far as I can see.

wary

Presumably your research was done after the offer & valuation otherwise you would have been crazy to offer 205000.

Can I ask what made you think it was worth 205K in the first place? Was it simply an assumption that if it is on the market for 210K then it must be worth at least 205K?

A lesson to be learnt for would-be buyers.

go_cat

Any buyer with a mortgage will probably get a similar valuation so I think your seller and maybe the estate agent need a reality check

good luck in your negotiations

dimbo61

The vendor/seller and estate agents are having a laugh!
You should have done your research before spending any money on surveys , legals etc
You are NOT buying a residential property you are buying a business as this is a BTL!!!!
What is important is the Yield from the rent compared to the purchase price and the condition of the property.
You need a good deposit of 25/30% but the vendor is dreaming if they think he/she will get £205K
Walk away

billynbk

I was essentially attracted by the rental yield on the property, about 13% and the EA seems to be justifying the high offer price based on the current yield and how much I could make in years to come. But property prices can come down and don't want to suffer from a crash.

billynbk

I am feeling like walking away. I appreciate that valuations can be lower than the actual offer price but the £55k difference is staggering. The EA says that on average that valuations are 15-20% lower than the actual offer price.

hcb42

billynbk wrote: »

I am feeling like walking away. I appreciate that valuations can be lower than the actual offer price but the £55k difference is staggering. The EA says that on average that valuations are 15-20% lower than the actual offer price.

I would love to know what he based that on.

graspandsave

I wouldn't believe the EA- he has a vested interest in the property being sold for as much as possible

If it were me, I would walk

Hope you get a good resolution to your dilemma

billynbk

Thanks for the advice.

Walking away would be better rather than letting EA get the price he wants. But the painful lesson will be losing the survey fee and some legal costs.

Can I make a complaint to the property ombudsman ?