Massive difference between offer price and surveyor's valuation

Findyourbacon

We're in the process of buying a 3 bed Victorian house and we've just had our building survey back - and its a bit of a shocker! There seems to be lots of structural issues and damp, and the survey said that the instability cannot be remedied. We're cash buyers so this wasn't a mortgage valuation but the surveyor put the value at £230k - it was on the market for £550k and our offer was £530k!! my instinct is telling me to run like the wind but just checking there aren't any other (sensible) alternatives.

Daerve

You could get a second opinion..........

roje

How much do they think it would cost to rectify the issues (the ones that can be rectified obviously)? I think some structural movement and damp is pretty normal in old properties isn't it? It depends on the extent of it. If the surveyor is really saying the problems knock £200k in value off the house then yes I'd be running as fast as my legs could carry me, that's pretty excessive!

csgohan4

Is it the cost to build the house from scratch?

davidmcn

csgohan4 wrote: »

Is it the cost to build the house from scratch?

...or the value of the land is £230k after the house has fallen down...

Surrey_EA

csgohan4 wrote: »

Is it the cost to build the house from scratch?

This is definitely worth checking.

Have you spoken to the surveyor who carried out the buildings survey for you? If not I think this is your next step.

However, it doesn't sound like you were expecting the survey to contain any major problems, and if you haven't budgeted for what sounds likely to be some expensive jobs this may be a house to walk away from.

Jhoney_2

Could it not be a typo?

Ring your surveyor so that you know your initial concerns are regarding a fact - and not a misprint.

HouseBuyer77

A surveyor will normally write a few sentances summing up the property, which would include reasoning for valulation (I've had two homebuyers surveys on two properties, both stated value slightly below offer price and both gave reasoning). For such a massive difference you'd expect something along the lines of 'Given the severe issues detailed in the report to bring this property up to a decent standard will require extensive and expensive rennovation works (in particular the instability issue may require a total rebuild of blah blah blah), the likely cost of these works is reflected in the valation' or possibly 'This property is beyond redemption, suggest you buy this for the land only, valuation is for land value minus demolition cost'

Surrey_EA

I would expect any surveyor making that much of a price downvaluation to pick up the phone to the person they are doing the report on behalf of and explain they've found some major problems and talk it over.

My bet is this is a typo or rebuild cost.

Conrad

Building surveys are often the kiss of death, I used to dread it when a mortgage client wanted one as I just knew it would result in the property sale falling through.


Most any property when subject to a building survey can make it appear the place is about to fall over.


As to that down valuation, what a joke, I will bet if you pull out another buyer will willingly pay the original price tag and some.

Findyourbacon

I don't think it's a typo - he's supplied a market value valuation at £230k and a reinstatement valuation of £200k.

The survey also said that given the condition of the building that consideration should be given to demolition and rebuild. They have highlighted lots of concerns around bulging walls, rising and penetrating damp, sagging roof and instability.

We should walk away, shouldn't we? I think I've answered my own question there!