Survey has come back as less than what we've agreed to pay!

Justadmin88

Thanks for the replies everyone and all the advice.

A bit of an update - because of the size of our deposit apparently Natwest will still lend us what we need but we'll be paying a little more each month. We're keeping that as a last card to play if the vendor decides not to budge and we decide we still want the house.

The issue is that in the area we want to buy the type of property we want is quite rare to come up - we want a one bed house with private garden, and I'd say about 90% of the ones that come on the market around here are back to back starter homes with an open to the pavement front garden. Add to this the fact that this new house is literally 3 doors down from where we currently live (in a street we really love) and it means that we are really keen on the property. I'm trying not to appear too keen to the EA though.

Last night our offer of the valuation price of £225k was refused as apparently the vendor bought the house in 2007 for £190k and they feel that an increase of £35k isn't enough considering they've made improvements (new kitchen, new bathroom, extended porch that none of our other little houses have). We went back at about 5.30pm yesterday with an offer of £235k and now we're waiting for a response to that. I know this is £10k more than we should perhaps be paying, but we really want the house. I was hoping when they refused the £225k they might have come back with a counter offer so we could get into a real negotiation, but I guess that isn't how it works?

It's such a headache, and it was all going so well!

Wish me luck!

Jaunty_One

Good luck Justadmin88!

I've just had a valuation knock £5K off my original offer due to suspicion of damp. They're bringing in a damp/timber company but I plan to find a surveyor, get a Home Buyer's report done then take negotiations from there.

ACG

If your 235 fails I would go back and say 237,500 is your final offer.
Put the ball in their court and see what they say, if they say no you can always say how far off are we.

Nobody elseis going to pay £12,500 over the asking price, unless you are very unlucky.

Maybe geta horrible rusty van and caravan and park it on the street. Or get a few friends kids to hang around in your front garden with hoodies on? That might drive away any potential buyers, maybe throw a few empty bottles of stella around to add to the affect?

oli_ro

amnblog wrote: »

They try to value to the best of their Professional opinion. The majority of properties meet valuation.

Totally agree. As I suggested, try to get hold of them on the phone. Sometimes they will explain how they arrived at this price.

Friend of mine was exactly the same situation and the conversation with the surveyor was quite an eye opener.

amnblog

You may find the valuer says a one bed house in the area has never sold for over 225K

Jhoney_2

Justadmin88 wrote: »

Thanks for the replies everyone and all the advice.

A bit of an update - because of the size of our deposit apparently Natwest will still lend us what we need but we'll be paying a little more each month. We're keeping that as a last card to play if the vendor decides not to budge and we decide we still want the house.

The issue is that in the area we want to buy the type of property we want is quite rare to come up - we want a one bed house with private garden, and I'd say about 90% of the ones that come on the market around here are back to back starter homes with an open to the pavement front garden. Add to this the fact that this new house is literally 3 doors down from where we currently live (in a street we really love) and it means that we are really keen on the property. I'm trying not to appear too keen to the EA though.

Last night our offer of the valuation price of £225k was refused as apparently the vendor bought the house in 2007 for £190k and they feel that an increase of £35k isn't enough considering they've made improvements (new kitchen, new bathroom, extended porch that none of our other little houses have). We went back at about 5.30pm yesterday with an offer of £235k and now we're waiting for a response to that. I know this is £10k more than we should perhaps be paying, but we really want the house. I was hoping when they refused the £225k they might have come back with a counter offer so we could get into a real negotiation, but I guess that isn't how it works?

It's such a headache, and it was all going so well!

Wish me luck!

Ask the surveyor if these factors merit the asking price. If not renegotiate or accept that you are buying over the market price as it suits your circumstances,rarity of stock etc.

Best of luck.

Thrugelmir

Justadmin88 wrote: »

Last night our offer of the valuation price of £225k was refused as apparently the vendor bought the house in 2007 for £190k and they feel that an increase of £35k isn't enough considering they've made improvements (new kitchen, new bathroom, extended porch that none of our other little houses have).

Doesn't sound anything like £35k of improvements.

Scrubber

Jaunty_One wrote: »

Good luck Justadmin88!

I've just had a valuation knock £5K off my original offer due to suspicion of damp. They're bringing in a damp/timber company but I plan to find a surveyor, get a Home Buyer's report done then take negotiations from there.

Just cause they've spent money, doesn't necessarily mean they've added any extra value. You can spend loads in a falling market and it not add any value to a house.

So any value is perhaps market values that have risen, but keep in mind, you're a market participant, and the price you end up paying will effect other values for houses on the road.

---

Conformity: If the neighbourhood consists of 2,000 square feet, three-bedroom home, improving a property above that standard may not be profitable. Converting a home by adding 500 square feet and changing the internal layout to four bedrooms and three baths could be money poorly spent, based on the principle of conformity.

Contribution: This principle acknowledges additional market value one may expect from improving a property is not equal to cost, but to the contribution those changes make to actual market value. Thus, in a low-demand market, an improvement may add only £2,000 to market value even though the actual cost was £5,000.

Substitution: This principle is, "A property's greatest potential market value is limited by the market value of other, similar properties." Thus is would not be realistic to judge market value in a vacuum. Without considering the market value of similar properties located in a similar area, we cannot accurately analyse market value of any property. This theory is easily observed. When two similar properties are for sale, the lower-priced one will tend to sell first and, as a result, the market value of the remaining property may be lowered.

pjread

Personally I wouldn't even have gone as far as you have.

If nothing else, you're increasing your LTV which I suspect will cost you another few grand over the mortgage term on top - not ran the numbers, but if it's a 0.5-1% rate jump it'll cost you ballpark another 1-2k a year in interest, and if you need to sell in the next few years for whatever reason I can't see a terribly good outcome. (e.g. if you decide a 1 bed house is too small, start a family, etc)

I suppose it's only money at the end of the day though and probably beats renting even if you overpay.

sinizterguy

amnblog wrote: »

They try to value to the best of their Professional opinion. The majority of properties meet valuation.

Agreed. Never had valuation issues in any of the 4 property transactions I have had to go through.