RICS valuer undervaluing by £100,000!

tk2k3

Hi,

We are selling our flat but are required to get a valuation from a RICS qualified valuer because it is shared ownership. We got a couple valuations from local estate agents and they valued you it at £650,000. Even though we only own 30%, we were very happy. We live in a great part of West London and it's a seller's market right now. In the current market we would have no problem selling our flat at this price and could even sell it for more as there is a huge demand for properties.

The problem is that the RICS valuator has valued our flat at £550,000. £100,000 less than what we could sell it for! Absolutely crazy!

To be fair to the valuer, he wants to increase the valuation because he doesn't want us to miss out but he doesn't seem to be able to increase it for whatever reason. I've given him the details of one of the estate agents so he can see how they came to their valuation. We're waiting to hear back at the moment.

What is the best thing to do in this situation? We don't want to miss out.

Thanks,
Tom

princeofpounds

Why is it an issue selling at an overvalue? I would have thought it would only be selling at an underavalue that they would worry about.

The surveyor will be following RICS procedures. There is latitude in interpretation but he simply may not have the necessary evidence of recent comparable transactions if the market is that fast-moving.

charleyroo

hi,

sorry if this sounds a bit dull, but what consequence does the lower valuation have to you?

you have to sell at the lower value? (which is good?) or.... you have to find the cash to reimburse the loss?

pinkteapot

Not sure how it works with shared ownership, but normally it's only a problem if your buyer's mortgage company values it at less than the agreed price.

If that happens, their mortgage company won't lend them as much as they wanted and they'll have to pay the shortfall themselves if they want to proceed at the originally agreed price.

tk2k3

We want to sell our flat for as much as possible but we may miss out, that's the problem.

Valuation from estate agents: £650,000
Valuation from RICS valuer: £550,000

We have to use the RICS valuation because we are required to by our housing group, who have the right to look for a buyer for the first 8 weeks and only if they don't find a buyer can we go with an estate agent on the open market.

We need the RICS valuation to be much closer to that of the estate agents valuation, or we'll be missing out on the full value of our property. Currently it's £100,000, less which is absolute madness!

The surveyor will be following RICS procedures. There is latitude in interpretation but he simply may not have the necessary evidence of recent comparable transactions if the market is that fast-moving.

princeofpounds, it is indeed a fast moving market. We had a valuation from an estate agent about 2-3 months ago pricing our flat at £575,000 and the same valuer came back a couple of weeks ago with £650,000. I hope that by getting the RICS valuer to talk to a local estate agent will convince him to raise the valuation because the estate agent will have more up to date information.

I've also found similar properties that are on the market for significantly more and sent that to the RICS valuer in the hope that helps bring his valuation up.

Is there anything else we can do?

princeofpounds

OK I get you now. The rules still seem odd but at least we know what they are.

If I were you, I would look really carefully at what the marketing rules are. The housing group might be able to market the flat for £550, but it may not mean you are locked in to sell at those levels.

You might be able to allow marketing, either with a view to getting past the 8 week window and recovering control, or with a view to telling anyone the real asking price and backing out if any sub-£650 offers (or whatever) come through.

pcgtron

pinkteapot wrote: »

Not sure how it works with shared ownership, but normally it's only a problem if your buyer's mortgage company values it at less than the agreed price.

If that happens, their mortgage company won't lend them as much as they wanted and they'll have to pay the shortfall themselves if they want to proceed at the originally agreed price.

My wife had a shared ownership flat.

Some councils insist you sell it at the price the RICS valuer has valued it at. There is no negotiation on the price, the price is the price if they can sell it in there 8 week window, hence unless the OP can get the valuer to up the value, it will go on the market at£550,000

gaz141

Can't you just pay for another valuer to come in and see what they come up with?

brit1234

I think I would believe RICS rather than an estate agent in a Burton suit and half a tub of hair gel.

ging84

could it be that 550k is it being values, as sold under shared ownership, where as on the open market you could get a lot more
that would work out well for you if the housing association will allow you to sell it on the open market through simultaneous stair casing with the housing association only taking the RICS valuation for their share
would mean the whole extra £100k would be yours, not just 30% of it

ethank

This is one of the pitfalls of shared ownership. A majority owner who does not care about maximising the sale price, because they need to maximise the housing need and a minority owner who wants to sell for the maximum price they can get.