Homebuyers Report - Valuation Woes

marmitemarmot

Hi all,
I feel like I've trawled through a lot of very similar threads to this one but couldn't find my answer, so please forgive if I'm asking again. I'm a first time buyer, everything is new and scary.

The Homebuyer's report has come back on a 4 bed, 3 storey townhouse. The market value is £200k (what I'm paying) but the reinstatement is £142k.
I've read lots of different threads that contradict whether this is expected or not, but I suppose what I'd like to know is:
1. Is this large difference in values something I should be concerned about?
2. Could it give some wiggle room for negotiating the price downwards?
3. Should the surveyor have provided a different market valuation figure? (not just the one I'm paying)

Thanks in advance for anybody's help. All will be gratefully appreciated.
Ruby

iDragon

depending where a house is, it's location and land may well make it more valuable than how much it would cost to rebuild it, hence difference in prices.

So, no, the difference between those values won't give any wiggle room as such.

davidmcn

marmitemarmot wrote: »

1. Is this large difference in values something I should be concerned about?

No.

2. Could it give some wiggle room for negotiating the price downwards?

No. The reinstatement value is only of interest for your buildings insurance.

3. Should the surveyor have provided a different market valuation figure? (not just the one I'm paying)

If the actual market value is less than what you're paying, yes.

glasgowdan

Reinstatement value has very little to do with what he house is worth. It's a very rough guess at what a builder would charge to rebuild the house and has nothing to do with land/plot value, desirability eta

Davesnave

marmitemarmot wrote: »

3. Should the surveyor have provided a different market valuation figure? (not just the one I'm paying)

No. These figures will usually just match if there are no valuation concerns.

Rambosmum

If the valuation of £200k, is the same as the amount you have offered for the house (or there abouts) then that's good - it means it is worth what you have offered (in the eyes of the surveyor). You have no wiggle or negotiation to do.

The 'reinstatement value' is the cost to rebuild your house should it burn to the ground or fall down. It has very very little to do with a properties market value. You'll need this figure when buying house insurance.

greatgimpo

Rambosmum wrote: »

The 'reinstatement value' is the cost to rebuild your house should it burn to the ground or fall down.

You would already own the land, so wouldn't need to buy it again, hence the main difference.

G_M

So the land you are buying is worth £58K and the building you are buying is worth £142K.

Combined together, what you are buying is worth £200K.

marmitemarmot

Thanks for your clarification everybody.
I really appreciate your input, my mind is a little more at ease now