undervalued house

welshyb

Hi, I am trying to find out some info for my sister, first time buyer, My sister has found her home that she loves, she is doing it all herself not using a mortgage adviser and she picked nationwide, surveyor has devalued the house by 18% which we know it is wrong as we looked at the house next door when it was up for sale and needed to much work for what they were asking so when this house came up it is brand new inside from floors to ceilings including all solid doors he has moved walls around to make the space bigger brand new bathroom plus he has put a downstairs shower room in also brand new kitchen with built in appliances, new combi boiler plus a new roof. It has not been lived in since the work has been done. The valuer has valued it less than the house sold for next door with needing work plus new windows. House price was accepted by the buyer of £97500 she is having a mortgage of £90000 so a deposit of £7500, the house was up for sale for £99950, The valuer has valued it at £80000 :mad: less than the house next door needing thousands spending on it, Within 24 hrs nation wide has come back and upt the value by £5000 still £12500 lower than the agreed price. She wants to go with a different mortgage company as nationwide uses county wide surveyors and looking at all reviews it is a common occurrence of down valuing houses, would it go against her credit rating as she has just had a hard search for nation wide, it went straight through but as she is looking for another provider she will need to pass another credit check . Any help would be very helpful Thanks.:)

A_Nice_Englishman

What have other similar houses in the area sold for recently?

It might be that the one next door was overvalued?

welshyb

Anywhere between £84000 (house next door) to £130000 all on the same street, its a cottage my sister has been accepted on, all the houses are different some are 3 story houses , bungalows cottages and flats, there is not one house the same. There has only been 1 house sold this year on the street and that was next door and 1 sold last year £120000,

A_Nice_Englishman

If all the houses in the street are different comparing prices seems a futile exercise but maybe the one next door is bigger, has a bigger garden, useful outbuildings, a better position or other features? Or maybe the valuer just got it wrong.

Personally, I'd try to use the valuation to my advantage, offer £85,000 and see what happens.

Sorry, this doesn't answer your question. Hopefully someone who can will be along soon.

dunstonh

surveyor has devalued the house by 18%

A broad guide is that the estate agent will price it around 15% ABOVE expected value. So, how much did your sister offer compared to the estate agent price?

Thrugelmir

welshyb wrote: »

There has only been 1 house sold this year on the street and that was next door and 1 sold last year £120000,

You need to broaden your comparisons. The surveyor will have enquired about selling prices in a far wider area from local EA's.

How much was the property purchased for and when? This may have a bearing on the valuation given. Likewise if the property is a complete refurbishment, the lender will be disinclined to offer a high % mortgage.

welshyb

Yes total referb down to the stone (stone house) as house was not liveable before as she viewed it the same time she viewed the house next door which needed referb as well but it came back on the market complete referb and added a downstairs shower room and toilet and thats why she went for it as she can move straight in. We can not get our heads around how the house sold next door for £84000 knowing it needed a new kitchen, bathroom and double glazed windows and the house she wants has been valued less at £80000. It is like walking into a brand new house.

BoGoF

You haven't answered Thrugelmuir's questions - how much was the property last sold for and when?

amnblog

welshyb wrote: »

surveyor has devalued the house by 18% which we know it is wrong

You may have your view but the Surveyor is the Professional and the source that the Lender relies on.

Your Sister has four choices:

1. Appeal the valuation - which is a lot more involved that saying your do not agree and next door sold for xxxx. Remember, you are asking the valuer to admit a mistake and alter their professional opinion. To have any chances you will need to provide evidence of two or three similar properties in the immediate vicinity that have sold so more in recent months.

Similar means similar, not another x bedroom house
Immediate means immediate, not 6 streets away
Sold means sold, not up for sale
Recent means 6 months not 2017/2016

2. Try a new Lender. Who may appoint a different valuer whom comes up with a similar figure, or even the same one who comes up with the same figure.

3. Put in the extra cash to bring the gap and buy it at the agreed price. Ask the seller to drop the price. A combination of both.

4. Ask why pay £97,500 for a £80,000 property and walk away considering the valuer has saved her a lot of money.

csgohan4

I would offer lower and mention other buyers will have the same problem if they need a mortgage as the house is over valued

FTBNow

As csgohan4 said: offer lower and explain why. We had the same problem and had to lower our valuation by £16,000 - sometimes one house can stick out in an area but if similar houses (same bedrooms, bathrooms, number of outhouses and so on) within a mile radius haven't sold for over £80,000 in the last three months then Nationwide won't budge.