House significantly downvalued by surveyor!

Thrugelmir

CG77 wrote: »

He’s a developer so no chain involved or anything but does seem keen to move quickly. A

How much did he pay for the property?

CG77

Thrugelmir wrote: »

How much did he pay for the property?

He bought it in 2002 for £64k ish and then the land registry shows another ‘putchase’ but no change of owner about 4 years ago at £130k. A solicitor suggested he had maybe remortgaged at that point?

silvercar

CG77 wrote: »

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

Yes, provided you have other money set aside for the other costs in house buying eg solicitors, mortgage fees, stamp duty etc

Still begs the question why would you pay 200k for a property only valued at 170k. If you pull out, the seller is going to come across the same problem with the next buyer.

TrickyDicky101

CG77 wrote: »

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

That's essentially correct (assuming you also have funds for the SDLT, conveyancing solicitor and moving costs set aside).

PKaurK

Of course the estate agent and vendor will say you are getting a good price, they want to make money from you. Yes the surveyor will base his valuation on recently sold comparable properties.

Think of it as a blessing in disguise as you could have paid significantly over the odds for it.

CG77

Thank you all. Yes i know the estate agent and vendor will want the best possible price but the fact they were so reluctant to come DOWN to £200k did, naively maybe, surprise me.

Anyway, I now have the report and am waiting to speak to the estate agent to discuss next steps.

Thank you

Amst

You're buying a house from a property developer (experienced seller - lol) and expect them to be selling it at a 'fair' price?

They are professional salespeople and will work off profit margins i.e. buy house for £150k + £10k to renovate = £160k, therefore I must make £30k profit for my 'time'. House
goes on sale for £190k and is subsequently downvalued repeatedly.

Offer £170k or tell him to go swivel (proverbially).

Edit: also, the golden rule with buying/selling a house is just to ignore anything the estate agent does or says and deal only with your lender and solicitor. EA's are interested in one thing only and it's not helping you buy your dream house at an affordable price. Where I work, one chain of EA's (who will remain nameless) are notorious for contacting the lender and their solicitors trying to circumvent the Data Protection Act to get information on the sale process etc. despite repeatedly failing security and impersonating sellers/brokers.

PKaurK

If you don't go ahead with this property, just bear in mind with any further properties, base your offer on recently sold properties and not the asking