Homebuyer Survey report less than Valuation

irishheartbeat

Hi

I have recently put an offer in to a house which was valued by the estate agents at 165k.

My valuation report was included with my lender but I paid for a homebuyer report survey to be carried out for piece of mind.

The homebuyer survey came back at 158k market value as it needed work doing to it.

I informed the estate agent of this and they told the vendor, who were surprised at this quote and are not sure if they can drop to this.

My lender have carried out a valuation survey and has come back at 165k as obviously this was not an in depth survey and they are willing to lend us that money.

The estate agent has asked to see the valuation report from my lender before negotiating with the vendor on a lower offer.

Please can I have some advice.

1. Do the estate agents need to see the valuation offer?
2. What offer would you put forward?
3. Legally, are the estate agents allowed to tell the vendor about the price of the valuation survey?

I am a first time buyer so I am unsure what to negotiate.

Any comments would be greatly appreciated. Thank you in advance.

G_M

irishheartbeat wrote: »

Hi

I have recently put an offer in to a house which was valued by the estate agents at 165k.
How could you possibly know this? The EA will tell their client (the seller) what they value the property at - but not you. It is then the seller who decides what price to market the property for - they may ignore their estate agent's advice/valuation.

.....

The homebuyer survey came back at 158k market value as it needed work doing to it.
So this was your surveyor's opinion of the value.

I informed the estate agent of this and they told the vendor, who were surprised at this quote and are not sure if they can drop to this.
Entirely up to the seller whether to drop the price or not.

My lender have carried out a valuation survey and has come back at 165k as obviously this was not an in depth survey and they are willing to lend us that money.
The lender is only concerned about whether the property will be good security for their loan. In 99% of cases, the 'valuation' is identical to the agreed sale price (what are the chances!?) which basically says "Yes it's worth enough to justify the loan". Mortgage valuations are never more than the sale price, but sometimes less (if the risk of lending that much is not covered by the property).

The estate agent has asked to see the valuation report from my lender before negotiating with the vendor on a lower offer.
Very common. If the lender is willing to risk the loan based on their valuation, the seller can respond "well, that's what the property is worth".

But imagine a situation where a buyer is only borrowing 50%, and has 50% in savings: the mortgage valuation will still probably be for the exact sale price (ie no risk to the lender), even if the surveyor actually thinks it's worth 20% less.

Please can I have some advice.

1. Do the estate agents need to see the valuation offer?No. Show them whichever Vauation suits you.

2. What offer would you put forward? Depends
a) what I think the property is worth in the open market (ie compared to other properties)
b) what it is worth to me (ie how much I want this property)
c) whether I think the seller might reduce their price or not

3. Legally, are the estate agents allowed to tell the vendor about the price of the valuation survey? Of course. The EA works for the vendor (not the buyer) so can (indeed should) tell their client everything.

I am a first time buyer so I am unsure what to negotiate.

Decide how much you want this property.

Note: there is no magical 'market value'. It can never be known until a sale completes - that is what establishes a property's value.

Until then, there are only opinions. The seller's opinion, the mortgage lender's surveyor's opinon, the buyer's opinion, the buyer's surveyor's opinion, the buyer's mum's opinion.

Some of these opinions may be more reliable /knowledgable than others, but none of these people can claim to know the market value.

Crashy_Time

Any chance of a link?

G_M

Crashy_Time wrote: »

Any chance of a link?

http://www.mypropertyguide.co.uk/articles/display/10002/how-to-value-a-property.htm

Crashy_Time

https://www.mumsnet.com/Talk/property/3174006-House-valuation-help-please

irishheartbeat

G_M

Thank you for all your comments I appreciate it.
I will have a think about it over the next few days.
The estate agent told me they vendor wanted to see my lenders valuation before discussing negotiations.

Anyway I will let you know the outcome but thanks again your comments were very helpful.

Crashy_Time

G_M wrote: »

http://www.mypropertyguide.co.uk/articles/display/10002/how-to-value-a-property.htm

Thanks. :money:

Taanya

So what happened at the end ?
Did you get negotiated with the HBV report?
We are having the similar situation