Desktop vs RICS Surveyor Valuations

unclebatman

Hi all,

I just wondered if anyone had a similar experience to my present situation, and can offer advice. 

Currently going through a sale to FTB and offer accepted/progressing nicely on onward purchase. This all happened days before lockdown.

I received contact from my estate agent earlier this week who advised that my buyers lenders had performed a desktop valuation, which returned a value of £20,000 less (sale price agreed at £210,000)

Ironically, this news came less than 24 hours after my own bank performed a desktop valuation on the property I’m purchasing, returning a value of £50,000 more than agreed purchase price so I can see first hand how wildly different the results are of this process. 

Bearing in mind the present lockdown situation, I wondered if it’s likely that an appointed RICS surveyor who actually visits the property will return a different value? Or, must I accept that I fell for one of the oldest tricks in the book and my estate agent overvalued in the first place? 

Anyone experienced this, or even challenged the result of a desktop valuation?

Any help or pointers appreciated. 

csgohan4

Challenging a desktop valuation on the buyers side is not up to you. You can agree or disagree and ask for it to be done manually, but the lender is not under any obligation to do so. 

EA always overvalue property, how do you think they got your business?

I would ask for a copy of the valuation before considering dropping any price

eddddy

unclebatman said:

I received contact from my estate agent earlier this week who advised that my buyers lenders had performed a desktop valuation, which returned a value of £20,000 less (sale price agreed at £210,000)
...
Bearing in mind the present lockdown situation, I wondered if it’s likely that an appointed RICS surveyor who actually visits the property will return a different value?

So that's definitely a valuation arranged by the lender - and not a valuation arranged by your buyer?

If so, the lender have instructed their valuer to do a valuation.  The lender won't take any notice of any other RICS valuation organised by you or your buyer.

(In theory, the buyer could ask their lender to reconsider, and/or ask their lender to arrange another valuation with a different valuer - but I know a few people who have tried that, and it has never succeeded.)

unclebatman said:

Or, must I accept that I fell for one of the oldest tricks in the book and my estate agent overvalued in the first place? 

That's a slightly strange way of looking at things. Presumably, the EA said they could achieve an offer of £210k for your property, and they have.

But the lender is taking a more cautious view - perhaps because the buyer wants a 90% mortgage, and the economy is bit fragile at the moment.

So your options moving forward include:

• To refuse to budge from £210k
• To compromise at (say) £205k
• To reduce to £200k

I guess the factors to consider include,

• whether the buyer has another £10k in cash, or £5k in cash.
• who is in a stronger negotiating position
• who is more likely to walk away, if they can't agree the price they want 

unclebatman

csgohan4 said:

Challenging a desktop valuation on the buyers side is not up to you. You can agree or disagree and ask for it to be done manually, but the lender is not under any obligation to do so. 

EA always overvalue property, how do you think they got your business?

I would ask for a copy of the valuation before considering dropping any price

Thanks for this. I’d already considered asking for a copy of the valuation so will definitely do so now that I know it wouldn’t be considered unreasonable. 

unclebatman

eddddy said
So that's definitely a valuation arranged by the lender - and not a valuation arranged by your buyer?

If so, the lender have instructed their valuer to do a valuation.  The lender won't take any notice of any other RICS valuation organised by you or your buyer.

(In theory, the buyer could ask their lender to reconsider, and/or ask their lender to arrange another valuation with a different valuer - but I know a few people who have tried that, and it has never succeeded.)

Thanks for your input Eddddy
Yes, this is a desktop valuation arranged by the lender that has returned this value.
Very frustrating. I guess the options are to renegotiate on price or perhaps ask the buyer to try another lender.

numbercruncher8

Can't see why the buyer would try another lender.
They could go through the whole application again with someone else, and the valuation returns the exact same conclusion. 
Seems to be putting them through a lot of inconvenience.
Not sure there is a lot to be done here unless you just postpone the transaction until a later date. But even then, the same valuations might result even with a physical inspection.

What are the surrounding property prices and comparables worth? Is there a Rightmove link to a similar house? I probably wouldn't go ahead if the only option was to drop 10% which meant the property was badly undervalued relative to everything else.