Homebuyer Report values our house at lower than sale price

fdl8

Hi

Having seen another house we really liked, we put our house on the market last summer for £285k based on valuations from two estate agents. We had a sale agreed within two weeks at £268k, which unfortunately fell through at the last minute when the buyer pulled out and took their house off the market. We dropped the asking price to £275k in the hope of a quick sale that would allow us to get the new house.

A couple of weeks ago we accepted an offer of £249,999 and we were lucky enough to still get the house we wanted last year. Our buyer's homebuyer report has valued our house at £240k. We bought it for £247.5k nearly 5 years ago and have spent approx £10k on it so I am shocked by the report. We had a copy of the previous buyers' report which agreed with the price of £268k. We had shown this report to the new buyer and negotiated to £249,999 on the condition that we would not negotiate any further. The buyer wants to speak to the surveyor to get an explanation of the £29k difference but I am expecting a lower offer to come in.

Does anyone have experience of such differing homebuyer reports? It seems odd that they can have such different opinions and the house be valued at less than we paid.

Thanks in advance for any advice.

hcb42

Being valued at less than what you paid 5 years ago is not that unusual and £10K is not a lot to spend on a house.

two different reports is a concern however, although ultimately it is one person's view and they were never going to overvalue it compared to the purchase price.

The canny buyer will not be fighting your corner unfortunately if they have any sense..

cattie

Although not exactly the same as what happened to you, I did some years ago have a buyer who's valuation report came back with a £10k drop in agreed price. The buyer was shocked as she agreed that the house was worth the price that we had agreed at.

What we had to do in the end to facilitate the sale was a 50/50 split, for buyer to come up with an extra £5k & for me to agree to take £5k off of the accepted price. I wasn't happy at having to do this, but really didn't want to miss out on the new place that I was buying.

I'm not sure where you live, but in many areas house prices are on the up & even if the market is not fully buoyant in your area yet, you would have expected the price to at least have stayed the same.

Unfortunately you don't usually get much of a return if any on what you spend on improving a house once you come to sell. I sold the year before last & had spent £30k+ on improving the house, but still only got back the price I paid for it.

fdl8

cattie wrote: »

I'm not sure where you live, but in many areas house prices are on the up & even if the market is not fully buoyant in your area yet, you would have expected the price to at least have stayed the same.

That is what we would have thought/hoped. We live in a desirable village in South Wales with good transport links. Our house is a cottage built around 1850 so is inevitably going to have some imperfections but the valuation is difficult to swallow.

bigadaj

The fact you're just round the jump in stamp duty from 1% to 3% won't have helped either, that can easily account for around ten grand difference on valuations.

fdl8

bigadaj wrote: »

The fact you're just round the jump in stamp duty from 1% to 3% won't have helped either, that can easily account for around ten grand difference on valuations.

The stamp duty was a big issue, which is why we agreed on £249,999.

bigadaj

fdl8 wrote: »

The stamp duty was a big issue, which is why we agreed on £249,999.

Which is sensible but isn't a justification for the valuation.

The main possibilities for challenging a surveyors report are either to compile selling prices for similar properties in the area or to get another surveyor to challenge the lower valuation.

Neither approach is guaranteed and ultimately it's down to an individuals opinion.

You either negotiate or stand firm and it's then down to your buyers to determine if they still want to purchase and whether they can afford to do so.

fdl8

bigadaj wrote: »

You either negotiate or stand firm and it's then down to your buyers to determine if they still want to purchase and whether they can afford to do so.

Yes you're right. I'm hoping we'll get what we paid but that's probably overly optimistic. It's reached a stage where, maybe desperate is not the right word, but we don't particularly want to go through the whole process of finding another buyer again, which could take another 6 months and mean us missing out on the house we want to buy.

kingstreet

Find the sold prices of similar property in the vicinity (within 0.5 miles) in recent times (last 120 days);-

http://www.rightmove.co.uk/house-prices.html

as these form the comparables surveyors use to justify their valuations.

Hominu

cattie wrote: »

Unfortunately you don't usually get much of a return if any on what you spend on improving a house once you come to sell. I sold the year before last & had spent £30k+ on improving the house, but still only got back the price I paid for it.

Whilst the house two doors down from me sold for £140K and was on the market two weeks ago @ 180K which what seems like a new bathroom, new kitchen and new carpets. Less than a week after being on the market it's sold. I don't know what it went for, but I'm guessing the seller didn't settle for more than 5K off the asking price. Houses around here at the moment are selling like hot cakes - some are only on the market for days before being sold!

Here's an example: Came on the Market 13th of this month, sold yesterday (15th)
http://www.rightmove.co.uk/property-for-sale/property-44895278.html

This one took 4 days to sell(!): http://www.rightmove.co.uk/property-for-sale/property-29210376.html

It's like you don't have time for second viewings and to think, you just need to jump in and buy!

phoebe1989seb

cattie wrote: »

Unfortunately you don't usually get much of a return if any on what you spend on improving a house once you come to sell. I sold the year before last & had spent £30k+ on improving the house, but still only got back the price I paid for it.

Same thing happened to us - spent in excess of £40k restoring a character property that had been neglected since the 1980s - and sold for less than we'd purchased at three years previously. All we succeeded in doing was make the house more saleable

Otoh, we previously sold a house we'd spent ten years in and around £80k *improving* (hate that term!) and sold for well over £400k more than our purchase price - purely down to a rising market and being in the *right* location......not our hard work, lol........