Valuation accuracy

chappers

robbiejustice wrote: »

Thanks all for your responses. I said no, and the buyer agreed to the original sale price.


I feel there should be a statement in the standard report about accuracy based on comparables and market conditions. People see a single number and don't question it when it clearly is a range.

there would be in a commercial valuation and that is all part of the justification and professional indemnity.
Today I have just received the valuation for the property we are buying, it has cost us £2.5k and whilst I still find that hard to swallow, I am amazed at how thorough it is. It runs to 46 pages including all the things you mention and more, including potential future hazards to the valuation, environmental issues and reports.
But don't expect a homebuyers report to contain anything more than a finger in the air guess.
The commercial report uses a range of parameters and then explains how that has been honed down to a single value.

Back to your original question, I would point out to them that whilst there is a difference of opinion as to the value, there is nothing highlighted as wrong with the property and that the time for making an assessment of it's value was before they made their offer and not after. Two days ago they were happy with their own valuation and were probably patting themselves on the back as to how they had seen off the other competition.
I would politely remind them that they know how much competition there was as they themselves participate in the sealed bids process, that you had other offers over the surveyors valuation and that fact alone would suggest that the surveyor has the figure wrong and that you will have to decline their revised offer.
If you want to put the pressure back on them then tell them you are quite happy to offer the house to the waiting list if they want to pull out. You have to mean this though.

AdrianC

robbiejustice wrote: »

I am in the process of selling a flat. The buyer had their mortgage approved for the agreed sale price. The buyer had a separate homebuyers survey, which down valued the property by 4% (11k). The buyer is now lowering the offer based on this.

Interest in the property was extremely high and we had to go to best and final offers. I could easily put it back on the market and achieve the same again. The buyer has sent the report to me and it does clearly state that they consider that they are paying a premium.

The valuation is for the lender's benefit - so that they don't find they're in a situation where they're lending an exaggerated LTV. They will either not lend the extra, or will regard it as the higher LTV, depending on their view of the borrower's creditworthiness.

There doesn't appear to be any caveats about accuracy, I am struggling to see how the surveyor can give a single number and not a range? A property valuation must be very difficult and I struggle to see how a valuation can be that accurate as to say a 4% difference between sale price and valuation is not within normal tolerances. Does anyone know how accurate these valuations are?

They're the surveyor's professional opinion, based on his personal experience and on market comparables.

If it went to sealed and final bids, is it not possible that the surveyor is actually right? And that any future buyer will have the same issue if they offer the same amount...?

Surrey_EA

AdrianC wrote: »

The valuation is for the lender's benefit - so that they don't find they're in a situation where they're lending an exaggerated LTV. They will either not lend the extra, or will regard it as the higher LTV, depending on their view of the borrower's creditworthiness.

Sounds like the lender had a mortgage valuation carried out, where the surveyor agreed with the purchase price, and then the buyer had a home-buyers report carried out for their own benefit, and the report included a valuation, which came in 4% below the agreed sale price.

glentoran99

AdrianC wrote: »

The valuation is for the lender's benefit - so that they don't find they're in a situation where they're lending an exaggerated LTV. They will either not lend the extra, or will regard it as the higher LTV, depending on their view of the borrower's creditworthiness.



They're the surveyor's professional opinion, based on his personal experience and on market comparables.

If it went to sealed and final bids, is it not possible that the surveyor is actually right? And that any future buyer will have the same issue if they offer the same amount...?

You've ignored the fact the lenders valuation was happy at sale price

AdrianC

glentoran99 wrote: »

You've ignored the fact the lenders valuation was happy at sale price

Ah, yes. My bad. I did indeed miss that.

So we have two slightly different professional opinions.