House Undervalued by 9%, any advice?

tharsos

I just received by mortgage offer for a 3 bedroom bungalow with 2 reception rooms that I am buying for 220k, which I usually good news, but according to the qualified surveyor the 'purchase price is considered high and is not supported by evidence of sales of comparable properties in the locality.' and 'The properties frontage onto a busy road may deter some purchasers and effect marketability. This is reflected in he mortgage valuation'. The valuation is 200k.

My property would be as follows:
-220k for 3 bedroom + 2 reception rooms

Here are bungalows that sold since 2012 on the same street:

-(7.2014) 249k for a 3 bedroom + 2 reception rooms (a lot better condition)
-(6.2013) 190k for a 3 bedroom + 1 reception room
-(8.2012) 143k for 2 bedroom + 1 reception room
-(3.2012) 165k for 2 bedroom + 1 reception room
-(2.2012) 180k for 3 bedroom + 1 reception room

I am currently waiting for a call from my mortgage adviser, but I wanted to ask whether anyone was in a similar position as I am at the moment and how did the situation resolve. Also, any advice would be greatly appreciated!

somethingcorporate

It's very unlikely you will get them to over-turn the valuation, but speak to your broker.

It's not been undervalued by 9%, it has been valued, by a professional, at 9% lower than what you think it is worth, which is distinctly different.

tharsos

I forgot to add that I have a quite large deposit, and I would still be able to buy the property, so I am not looking into disputing the valuation price. However, even thought I could buy it right now I am concerned that I could end up paying too much.

Since the last sale on the road was for 249k I thought that 220k wasn't a bad price, but on the other hand there were properties on the road that sold for a lot less a year or two ago.

Thrugelmir

It's a matter between you and the vendor. Have you advised the EA of the valuation?

gazter

The seller will quite possibly just want to sell it at that. Play hard ball, tell them you can't pay more then £200k because that's what mortgage company has come up with. Their agent will advise them that another surveyor will just come with the same price.

After they've stewed on it be prepared to offer them another 5k and they'll take your arm off.

ACG

Lenders will want to see 3 similar properties in the local area in the last 6 months generally.

So are there any properties on neighbouring streets as there is only one on that list they will accept so is there anything else that might be used?

rajp

I am in a similar position however mine have been valued over 10% less than the offer. Same thing as your report as value doesnt believe property value is right considering others in the area.

Currently the only way I can see is either
- Vendor drops their price - highly unlikely as this property is in London
- I find the extra 10% somehow and hope that the valuer was wrong

Let me know how it works out for your or if anyone has been though this and outcomes....

tharsos

I sent the valuation to the vendor and on Monday I should have information whether the vendor is willing to reduce the price.