Valuation below a sales price

J234

Hi all,

We had an offer of 410k accepted on a property but found out the valuation came in at 400k.

We've been told by an advisor that the reason for this is probably because the property was originally on the market for 400k. However, I'm thinking that surely the whole purpose of valuation is to estimate the real value of a property independent of the asking price?

Can anyone confirm whether the asking price has any bearing on the valuation outcome?

movilogo

Valuation is a surveyor's (often subjective) opinion about the value of a property from bank's perspective.

If valuation comes below your offer price - you have 2 options.

1. Negotiate price with seller citing this.
2. Top up the difference (because bank won't lend over valuation price) from your own pocket.

lee111s

It's only around a 2% difference, unlikely to be changed. As mentioned abovec negotiate down or you'll need to increase your deposit.

kingstreet

J234 wrote: »

Hi all,

We had an offer of 410k accepted on a property but found out the valuation came in at 400k.

We've been told by an advisor that the reason for this is probably because the property was originally on the market for 400k. However, I'm thinking that surely the whole purpose of valuation is to estimate the real value of a property independent of the asking price?

Can anyone confirm whether the asking price has any bearing on the valuation outcome?

If you are talking about a mortgage report & valuation done for a lender, all that is designed to do is tell the lender if the property is suitable security for the loan and the price is reasonable in the current market.

It is not a market valuation.

[Deleted User]

I agree with Kingstreet, it's not an exact valuation, but a yes/no to the offer amount. Sounds like someone put an out of date amount on there, if so a call to the bank / broker / advisor could sort it out. Good luck!

chris344

Is there an important factor between market valuation and a bank's valuation?

Let's say the market value is 65k more than the banks valuation for example and all local agents are quoting this but the bank state 65k less?

MaxTheCat

chris344 wrote: »

Is there an important factor between market valuation and a bank's valuation?

Let's say the market value is 65k more than the banks valuation for example and all local agents are quoting this but the bank state 65k less?

Yes there is a very important difference. The bank lends based on its valuation not yours/vendors i.e. the market. Therefore you will have to pay the difference because the bank won't regardless of what the market thinks.