Valuation

Goath

Hi all
I know this is subjective, and I no-one can provide a definitive answer to this.

But I have not slept for weeks worrying about this, and I bought and sold houses before with no problems, but this is the 1st time I have heard about this and now its causing me endless worry.

its about a surveyors down valuing properties.. I am selling and I spoke to my EA about it and they said not to worry about it to much at this stage (I will need to get an offer 1st)

I don't want to give away to much information on here, and scare of any perspective buyers, but basically in my area the "competition" of similar houses in this area is < 10 other properties (not on my street, but in the same area)

To cut a long story short the EA put our house on the market at X amount saying we would easily get that (we went with the same EA that has a high presence around here, and one that sold our previous house (in a different area) really fast - and we are getting lots of viewings, and acting on the feedback received.

After a week or so thinking about it, I decided that their "valuation" was too high, and I dropped the price to bring it into line with the "competition".
This brings it to slightly more than I originally paid for it.

to find out an average sale price for this street I have been scouring every valuation tool on the internet, I have also downloaded data from the LR and worked out of the average price of sold properties over the last 5 years (any sooner raises the average (and there was only 1 sale)) this gives me a average of < 10 properties. and the this is 3% Less than what I paid for it originally.

I am prepared to sell my house, also taking on the 3% hit to bring it slightly under the average sale price over the last 5 years I am not desperate to move, but have seen another property that I am keen to purchase.

The House was only bought a couple of years ago, I am prepared to sell it at the average figure which is less than I paid for it. It's in a good state of repair, good area and location, good schools. I'm just so worried that someone who will not probably even visit the house, is going to down value it even further that would make it financially impossible to move.

I just can't sleep over worrying about, and I have read on the internet all these horror stories, and even an accountant friend, when I mentioned my fears said the "Oh yea banks are all doing that now!"

I know that there is no definite answer, but is it likely that this will happen. I've never borrowed more than I can afford on a house. I've always paid for what I thought its worth - when we had the survey done on this place a couple of years ago it was noted on there as such "Our valuation reflect the general condition of the property in its present state" so if it gets down valued are they telling me that it has dropped more than 3% (or to what ever value they dream up) in just two years, when according to stats on the web house prices have levelled, or risen slightly..


So worried I can't sleep..

anselld

You have done your research and you are prepared to sell at a reasonable price so don't worry about it. The majority of "undervaluations" are probably where the vendor has been unrealistic on asking price and the purchaser has not researched or has had their offer gamed up by EA.

bowlhead99

Goath wrote: »

I know that there is no definite answer, but is it likely that this will happen.

.

If the surveyor doesn't have data showing price declines in your area and your asking price is in line with the competition and the price you paid two years ago wasn't outrageous, and someone is willing to pay your asking price, there's no rational reason for a surveyor to say it is worth some random lower amount. Let alone that *all* surveyors would say it's worth some lower amount.

I've never borrowed more than I can afford on a house. I've always paid for what I thought its worth

Well, to be frank, that's neither here nor there as it's not about whether you can afford it, is about what the average rational person would pay for it.

when we had the survey done on this place a couple of years ago it was noted on there as such "Our valuation reflect the general condition of the property in its present state"

Yes, that's the language a surveyor generally uses.

so if it gets down valued are they telling me that it has dropped more than 3% (or to what ever value they dream up) in just two years, when according to stats on the web house prices have levelled, or risen slightly..

*If* it gets down valued then the surveyor would be saying that based on market conditions, they don't believe it to be worth what your particular offeror has offered to pay.

However, you need to stop getting outraged - I can picture you saying, "are *they*, really telling *me*, that my house is worth less, when house prices are flat or up, this is an absolute scandal!". As of today, they are not telling you anything. They haven't even been approached by anyone to value your house yet, and you seem to be saying they are going to value it lower than the offer which you haven't even had yet. If they valued it at £x today, they might value it differently in a couple of months and a different surveyor might say that amount plus £5k or minus £5k, who knows. It is not an exact science. The amount someone is willing to pay (by offering that amount to you in an arm's length transaction) is usually a decent guide to fair value.

So worried I can't sleep..

No point being so worried, when you haven't had an offer yet. The offer may well (well, realistically, will) come in lower than your asking price because most buyers don't want to pay as much as asking price if they can help it. Then your buyer will get a survey. Then when the survey supports the valuation they will probably buy it. If it doesn't support the offer valuation they may want to haggle it down to make it easier for them to purchase, and you can choose whether or not to accept a lower offer or stand your ground, and they may really like the property and just accept a higher mortgage LTV, or they may not.

Goath

Ok thanks all for getting back to me.

Crashy_Time

http://www.bbc.co.uk/news/business-42344170


Lot more "down-valuations" to come IMO.

Typhoon2000

The surveyors valuation is not going to be dependent on your asking price or the offer price. So you have nothing to gain from that point of view by reducing your asking price. If your agent feels strongly he can get a higher price then let them go for it. You can always accept or renegotiate if the valuation comes in lower and it is a problem for your buyers.

Thrugelmir

Goath wrote: »

I just can't sleep over worrying about, and I have read on the internet all these horror stories, and even an accountant friend, when I mentioned my fears said the "Oh yea banks are all doing that now!"

Banks don't value properties. Independent surveyors working on their behalf do. Surveyors will obtain recent local prices by talking to a number of EA's (excluding your own). Ultimately the property has to provide adequate security for the money being adanced. Lenders have their own internal reasons for not being keen in certain circumstances. Never been any different.

Crashy_Time

Thrugelmir wrote: »

Banks don't value properties. Independent surveyors working on their behalf do. Surveyors will obtain recent local prices by talking to a number of EA's (excluding your own). Ultimately the property has to provide adequate security for the money being adanced. Lenders have their own internal reasons for not being keen in certain circumstances. Never been any different.

Except when they were blowing the biggest property bubble in history, and getting the taxpayer to take the hit for the mess...:rotfl: