House significantly downvalued by surveyor!

CG77

Well that wasn’t the problem I expected we’d encounter!

I’ve chased up our broker today to be told by another memeber of the team that our lender’s surveyor has valued the house at £170k and we have offered at £200k!

Any advice on next steps?

Thank you!

glosoli

Options as far as I can see would be:

1) Advise the vendor of the down valuation and see if they would be prepared to reduce the purchase price to £170,000. It might be the case that the property is in fact overvalued at £200,000.

2) Proceed with a different lender, who would maybe use a different surveyor, to see if it comes back at a different amount.

3) If you really want the property and are prepared to pay £200,000 (or any other amount above £170,000), then put down a percentage of the £170,000 (which the lender would use to calculate the LTV), and pay the additional £30,000 (or whatever) above and beyond that to secure the purchase.

4) You could try and appeal the valuation with the original surveyor, but to be honest with you, it is a very difficult thing to achieve.

Sometimes on the report it says why the property has been down valued, for example proximity to commercial premises, or comparable sales in the area not justifying the purchase price.

Thrugelmir

Obtain a copy of the valuation report before doing anything.

PKaurK

If you are able to find recent sold prices of comparable properties in the area that support your offer of £200k, you can appeal it.

Maybe you should also consider whether you are overpaying and is the property actually worth that much?

amnblog

Glosoli has summed it up here.

CG77

Thank you all. The vendor originally wanted £208k and took a while to be persuaded to come down to £200k so I can’t see him budging much! Will he not have this issue again in future though?

He’s a developer so no chain involved or anything but does seem keen to move quickly. A similar house on the same road but more bedrooms and an attic conversion went for £182 last year. Hmmm...maybe the surveyors aren’t so far off?

glosoli

Will be exactly the type of thing to have influenced his figure to be honest.

CG77

glosoli wrote: »

Will be exactly the type of thing to have influenced his figure to be honest.

Thank you Glosoli. Do you mean the other house would have influenced the surveyor’s figure? I’m wondering what made the vendor (very experienced seller!) think the £208k was reasonable? I think that’s why we went with it-both he and the EA seemed certain we were getting it for a good price when we got it down to £200k!

TrickyDicky101

CG77 wrote: »

Thank you Glosoli. Do you mean the other house would have influenced the surveyor’s figure? I’m wondering what made the vendor (very experienced seller!) think the £208k was reasonable? I think that’s why we went with it-both he and the EA seemed certain we were getting it for a good price when we got it down to £200k!

Did that really come as a surprise to you? You would hardly expect him and the EA (who works for him, not you) to tell you to your face you've overpaid would you?

Lilla_D

Valuation isn't an exact science, but it's a subjective matter based on comparable properties and by making adjustments for differences between the previously sold properties and the subject property as well as taking into account how property prices have moved since the previous sales. So yes, past sale for £182k would have influenced the valuer's result. Developers and estate agents are naturally trying to sell newly built / converted / modernised properties at a higher price, but how much higher is reasonable is a subjective matter. Down valuations are quite common and another buyer may have the same issue as you, but as glosoli said, a different lender's valuer may come back with a different figure.

CG77

Thanks all. I’ve spoken to the broker who has requested the report from the lender so I have something more concrete to discuss with the estate agent.

Can you just humour me on this basic maths please? So the lender will only lend based on £170k, the mortgage is a 90% mortgage so we need to borrow £153k, we have £20k deposit, and could possibly scrape together another £2k, meaning the we can offer £175k? Have I got that right?

Thank you-I appeeeciate the help