House down-valued 'ex local authority'

Lovem

Hi,
Our property has been down valued. General seems to be accept it without any questions as to why?

We are the first to sell in the area. House is unique so not the traditional houses around that area.

Also, the surveyor has noted the house is 'ex local authority' where is it not. Could this bring down the valuation?

I have no idea what to do from here. Do I pull the plug on the sale? The valuation is only more £7,000 than when we purchased it 9 years ago just as the recession hit.

sevenhills

Lovem wrote: »

Also, the surveyor has noted the house is 'ex local authority' where is it not. Could this bring down the valuation?

I have no idea what to do from here. Do I pull the plug on the sale? The valuation is only more £7,000 than when we purchased it 9 years ago just as the recession hit.

Prices are going down a little at the moment. Tell the surveyor, or is it lower because its a council house area?
I live in a council house, mostly private now.

Lovem

sevenhills wrote: »

Prices are going down a little at the moment. Tell the surveyor, or is it lower because its a council house area?
I live in a council house, mostly private now.

Hi,
It is a council house area. However, it has undergone extensive regeneration. Our particular house area is all private owned from new build.

Cakeguts

Lovem wrote: »

Hi,
It is a council house area. However, it has undergone extensive regeneration. Our particular house area is all private owned from new build.

It is probably the council house area. Houses that are close to a large council estate tend to drop in value to nearer the price of an ex council house rather than match the price of non council houses. It is due to the fact that people would prefer to buy a house that is not near a council estate.

Davesnave

Because you don't ID your general area, no one here can tell if prices in your location ought to have risen substantially. If they haven't, then the valuation may be correct, barring the misdescription of 'ex-council.'

If the surroundings don't look particularly great, then challenging the description might not make a lot of difference.

We also can't comment on whether you should stop the sale. Many people in all sorts of houses find that a valuation is less than expected, or receive offers lower than they want. I got about £60k less than I expected in the recession, but it didn't stop me selling and gambling on finding another at a much reduced price. We all treat risk and disappointment differently.

In your case, it may be that you could meet the buyer half way over the shortfall. You won't know till there's a bit of horse-trading. It also depends on what you want to do next, what you have in the way of savings etc. Too many imponderables really at this point!

Lovem

Davesnave wrote: »

Because you don't ID your general area, no one here can tell if prices in your location ought to have risen substantially. If they haven't, then the valuation may be correct, barring the misdescription of 'ex-council.'

If the surroundings don't look particularly great, then challenging the description might not make a lot of difference.

We also can't comment on whether you should stop the sale. Many people in all sorts of houses find that a valuation is less than expected, or receive offers lower than they want. I got about £60k less than I expected in the recession, but it didn't stop me selling and gambling on finding another at a much reduced price. We all treat risk and disappointment differently.

In your case, it may be that you could meet the buyer half way over the shortfall. You won't know till there's a bit of horse-trading. It also depends on what you want to do next, what you have in the way of savings etc. Too many imponderables really at this point!

Hi,
The house went over on asking price and sold within a week. So this down-valuation has really surprised us. I did worry about it happening but when all EA's gave the same guidance price. We thought it would be ok.

I have already given the EA's the offer that we will meet the buyers half way but I don't think they will.

Ithaca

Lovem wrote: »

We are the first to sell in the area. House is unique so not the traditional houses around that area.

This might be part of the reason. Surveyors like to justify their valuations by referring to recently sold properties... i.e. if an identical house down the road sold six months ago for a similar amount they are much more confident with their valuations.

As yours is (1) unique and (2) the first to be sold there's limited data on which to base a valuation, and some surveyors might downvalue to take account of that uncertainty (and to cover their a*ses).

What sort of percentage decrease are we talking about?

eddddy

You don't specifically say - has the buyer reduced their offer to the valuation figure?

It could be that that they don't have sufficient cash to pay above the mortgage valuation.

You could try suggesting that the buyers try a different lender, who would use a different valuer, who might value it higher - but that might be grasping at straws.

teddysmum

Cakeguts wrote: »

It is probably the council house area. Houses that are close to a large council estate tend to drop in value to nearer the price of an ex council house rather than match the price of non council houses. It is due to the fact that people would prefer to buy a house that is not near a council estate.

This is not necessarily the case.Our 1970s private estate has council estates all round ,from1930s to some also 1970s,but our houses sell for quite a bit more than even the newer council houses and also sell for slightly more than on another estate of the same design by the same builder. (A bungalow is 'sold' after only having the EA's board up for 2 weeks and for most of that time there were no details on the EA's website).

Cakeguts

teddysmum wrote: »

This is not necessarily the case.Our 1970s private estate has council estates all round ,from1930s to some also 1970s,but our houses sell for quite a bit more than even the newer council houses and also sell for slightly more than on another estate of the same design by the same builder. (A bungalow is 'sold' after only having the EA's board up for 2 weeks and for most of that time there were no details on the EA's website).

What I had in mind is what is near this house. http://www.rightmove.co.uk/property-for-sale/property-58504666.html There is a new development not far from here and the houses on there were cheaper to start with than in better areas and are likely to drop to match the surrounding area prices. So anyone buying on the new development rather than an ex council house can be expected to make a huge loss when the new houses become 2nd hand. The ex council houses like the one above on this council estate are cheaper than most of the 2 bed terraced houses in better areas. So unless the new houses are sold really cheaply they aren't going to be desirable to anyone to buy.

In this case I would expect all the new houses close by to be down valued by quite a lot when put up for sale because I can see that the banks and mortgage providers would be worried about how low the price would have to be on a repossessed property in order to sell it.

Cakeguts

http://www.rightmove.co.uk/property-for-sale/property-64902605.html Found a better example of a modern private house on a large council estate.

http://www.rightmove.co.uk/property-for-sale/property-47840664.html Why would anyone buy the first example when you can get a better house for much less in the same area?