AAARGH!!! Surveyor massively downvalues flat

Tim_Bisley

This is just venting really, but it's just so frustrating...

Mortgage valuation was booked a week after the application went in, so happy days! Until the IFA got an email from Halifax yesterday saying that "in the surveyors opinion" the flat is actually worth £220,000 rather than the £295,000 that has been agreed. Stunned is not the word...

It's a big penthouse flat in the centre of town with lots of outside space, so I'd imagine that there aren't that many comparables around. The estate agents weren't even asked to provide any though, so god knows what the surveyor has based it on. This isn't a flat where the vendor was pushing the price, and it stacks up against the rest of the market - we've been looking for 6 months so we know pretty well what is around.

£220k would put it cheaper than flats half the size, further out of town, without the amenities the building has - gym, pool etc. It just does not make any sense.

We currently still haven't seen the report. I actually called up the surveyors this morning, who wouldn't talk to me!! Apparently they will only speak to the Halifax, although this may be because the IFA put a complaint in pretty much straight away because the valuation was so far out.

EA is putting together comparables to back up the price today. Not much else we can do until we get the report I guess...

kingstreet

Surveyors use comparables from sold prices they gather from the land registry, usually the recent sold prices (last four months) of similar property in the vicinity (less than 0.5 miles).

However, they are guided by the RICS Red Book on how to value in circumstances where there are no comparables.

The surveyor probably won't speak to you if you only had a mortgage report and valuation as this is done wholly for the lender and not for you, despite you picking up the tab.

Colleys surveyors are usually reasonably approachable. Has your broker spoken to them?

Tim_Bisley

No, he said it might be quicker if I tried. I've asked him to get hold of an electronic copy of the report, because we need to see it ASAP.

I appreciate that it's difficult if nothing has sold recently, but it's a huge down valuation that's totally out of line with the market. I'd love it if £220k did get that size flat, of course, but it's just not realistic.

Mortgage_Mark_2

Tim_Bisley wrote: »

No, he said it might be quicker if I tried. I've asked him to get hold of an electronic copy of the report, because we need to see it ASAP.

I appreciate that it's difficult if nothing has sold recently, but it's a huge down valuation that's totally out of line with the market. I'd love it if £220k did get that size flat, of course, but it's just not realistic.

Why did your broker put in a complaint rather than an appeal?

Tim_Bisley

He said they were refusing an appeal, I think, which was strange given the difference was so large.

ultrafox

There are probably be reasons why it's be undervalued. This might be due to the flat or it might be due to the banks policy. Either way you could go with another bank (although the same might happen), you can complain or appeal (but I wouldn't hold out much hope of it changing), you can aggressively negotiate with the EA on the flat price or you can pull out.

As a buyer, if the bank undervalued a property I was thinking of buying by that much I would see it as a major warning sign and pull out.

Flashmanchop

why don't you turn it around, and use they report to save you money?

Tim_Bisley

Flashmanchop wrote: »

why don't you turn it around, and use they report to save you money?

It's not £10-£15k short where you can push for a reduced figure, it's as good as a 25% reduction. Also, as the sale price is in line with what else is around, sold prices not just asking prices, if I was a vendor I wouldn't come down too much.

Tim_Bisley

Got the report. Issues seem to be:

1. Service charge is "higher than average." It is high, £4k a year, but we got some figures from similar properties in town and it's along the same lines. This flat has a gym, pool etc and other buildings were charging the same with no amenities. We saw one flat with a £4k service charge that had just a communal staircase and no parking..!

2. "Properties of this type and age are valued between £170k and £220k" Maybe they are, but they are smaller...

3. It then talks about limited future saleability because of the number of buy to lets and students in the building and that it's near to "other commercial premises" and a nightclub. It's a city centre flat!!

Halifax apparently waiting on comparables so they can go back to the valuer now.

happy_2008

Do you have a link to the property in question?

harrys_dad

Some key issues in that report that maybe you need to consider. You keep saying the market says it is worth......". the valuer clearly has a different view of the market, and maybe you are overpaying.