Property seriously Down valued

mr_optamistic

Hi all

had our valuation done on Thursday done by Barclay's who have it done with Countrywide Surveyors.

house was up for £240,000 O.I.E.O, after a few bids we stuck at £247,000, and although 2 others offered more than us they accepted our offer.

now before we offered I looked around the area and other prices within a mile or so and also the last house sales within that area.

The last sale in the street was Oct 2015 and sold for £220,000
The house next to the one we offered was on the market for a while and was on the market for £249,000 O.I.E.O through a different estate agents.
Their is one currently one on the market 3 streets away which is pretty much exactly the same as the one we offered apart from garden is slightly bigger and this is up for sale at £260,000

other properties within a mile or so have been selling for around £210,000 - £260,000 depending on size, bedrooms etc

Anyway I got the valuation report sent over this evening and they have down valued the property at £220,000. A £27,000 difference.

How is the estate agent able to value it 27000 more, I could understand maybe slight variation.
everything is fine on the valuation report, no damage and nothing needs doing etc, only thing it says on last page is "The purchase price cannot be adopted for mortgage purposes as it cannot be supported by sales evidence of similar properties in the area.

now have to wait until Monday to speak to mortgage adviser and see what they say, would imagine they will tell us to re-negotiate the price, but if the seller has had higher offers then they will probably go elsewhere, but surely whoever they go with will have same issue.

RANT OVER LOL

:beer:

alchemist.1

The question is why you have valued it at 247000 when a similar house sold for 220000 in October 2015. Asking prices are not an accurate guide of valuations.

ACG

The agents can value it at whatever they like, it does not mean it will sell for that.
A local property has been up for £249k but it has not sold - so £249k is too much. £220k property has sold, so that means they are valued at £220k.

The other properties, the examples are too broad. You need to look at what is realistic.

Going forward however your options will be:
Renegotiate the purchase price,
Put the extra down yourself,
Appeal - I have never had an appeal overturned in 3-4 years.

It sounds like the property has been over valued though.

mr_optamistic

we offered £247,000 as it seemed a good price for a 3 bed house in a nice area, and having seen 2 beds sell for same within the area and also 3 beds for a lot more within the area then it seemed good value.

I appreciate that the estate agent wants to make more money for themselves but they must also must act in good faith and follow guidelines especially when valuing a property to their best knowledge.

I am no expert on the market as a first time buyer.

When you give advice to someone selling their property, any
figure you advise, either as a recommended asking price or as
a possible selling price must be given in good faith and must
reflect available information about the property and current
market conditions and must be supported by comparable
evidence. You must never deliberately misrepresent the market
value of a property.

amnblog

Values are paid to protect the Lenders interest. They are interested in what properties are selling for not marketed at.

Sounds like you have simply offered too much.

Your options are:

Bridging the gap in the lending with cash.

Renegotiate the price.

Combination of the two.

Or walk away.

Berger_3

This isn't much help but I'm currently at the other end of this... Had three estate agents round to value my flat, all three said £250k, put the property on the market on the Tuesday, had 12 people view on the Saturday and two offered £250k. I accepted the most suitable of the two only for their mortgage company/valued to down value it to £235k! there are properties locally that have sold for similar, but coincidentally Zoopla values my flat at... £235k I bought it 9 years ago so Zoopla isn't exactly going to be accurate.

Whatbis your deposit like? The only thing I can think of is that my buyer has a small deposit and the mortgage company down valued it to protect themselves.

mr_optamistic

Yeah I find it strange that estate agents who I know want to receive their money ASAP and want as much as possible but they also have to know that the property will get valued independently from the mortgage lenders and will be given a more accurate valuation.

Yeah we are only FTB and only have a 5% deposit so who knows.

For us its no massive issue but mostly just hassle, we have lost out on £210 valuation fee and will carry on looking unless the seller is willing to come down which I don't think they will.
out solicitor is no move no fee so no loss their and they will do searches on next property for free.

Just frustrating how they can value your property at £250,000 just to get their foot in the door and on their books and then have to go through the whole process over and over because they value it too high

mr_optamistic

Values are paid to protect the Lenders interest. They are interested in what properties are selling for not marketed at.

Sounds like you have simply offered too much.

Your options are:

Bridging the gap in the lending with cash.

Renegotiate the price.

Combination of the two.

Or walk away.

If I'm honest I thought 247,000 was slightly higher than needed but i wasnt expecting that much of a difference, thank you anyway for replying, we will probably try and get the price down if not then walk away and carry on looking

lush_walrus

Estate agents care very little about prices, it has a minimal affect on fees. The driver is the market and the vendors. My guess the EAs have based their valuation on the neighbouring 249. Imagine being the vendor seeing the one for sale for 249 your expectation would be for yours to also be in the region.

Anyway to the point, this is actual quite common in a rising market surveyors often value lower. The reason for that is their valuations are based on going into estate agents for comparable properties and hunt for sold prices of similar. If the last sold was 220 then that is likely to be where they have pitched it if they are a cautious surveyor.

Your options are to find the difference in cash or renegotiate the price or last resort change mortgage - each surveyor is different and this one could be cautious that if this is the house for you and actually the price is right will cost you the house. Of course pulling out stays an option. Only you know what move to make.

Berger_3

mr_optamistic wrote: »

Yeah I find it strange that estate agents who I know want to receive their money ASAP and want as much as possible but they also have to know that the property will get valued independently from the mortgage lenders and will be given a more accurate valuation.

Yeah we are only FTB and only have a 5% deposit so who knows.

For us its no massive issue but mostly just hassle, we have lost out on £210 valuation fee and will carry on looking unless the seller is willing to come down which I don't think they will.
out solicitor is no move no fee so no loss their and they will do searches on next property for free.

Just frustrating how they can value your property at £250,000 just to get their foot in the door and on their books and then have to go through the whole process over and over because they value it too high

I suspect (but maybe wrong) that your deposit has something to do with it. Nothing wrong with 5% but from the lenders point of view they are going to be ultra cautious and if there is even a sniff of it being over valued they under value it to protect themselves. I suspect if you had a 15%+ deposit they would have probably gone along with the figure as the risk to them is much less. I don't know my buyers full situation but for me this is the only plausible reason for them down valueing mine when as soon as it went on the market I had two people willing to pay the asking price, and by the time the open day was done the agent had another 6 people wanting to look at it.

mr_optamistic

Another quick question

if we decide after speaking to mortgage adviser on monday that it be best for us to look elsewhere does that mean we will then have to go through the whole full application process again with the same lenders and will it leave a mark on our credit??