Surveyor might value house less than developer?

buel10

theartfullodger said:

Surely the question should be do developers ever value their speculative jewels at more than any level headed, accredited and trained, surveyor would?

This was brilliantly put!! Thank you.

Freecall

theartfullodger said:

Surely the question should be do developers ever value their speculative jewels at more than any level headed, accredited and trained, surveyor would?

You are not suggesting that developers overvalue their new-builds are you.

That can't be right, surely? 

  

AdrianC

Umm, the very definition of a market price (which is what we mean by "value" here) is the price at which a seller is willing to sell and a buyer is willing to buy.
https://www.investopedia.com/terms/m/market-price.asp

So, if there's somebody wanting to buy, then by definition it is not overvalued.

It just happens that the buyer is more optimistic about the value than the lender. It happens. Different people have different opinions. It doesn't make the buyer wrong...

csgohan4

the valuer might be doing you a favor and scope for renegotiation and reduce exposure to negative equity if they down value.

MOST  new builds are over priced and once you put the keys in, it will lose a % of it's value and take a few years to increase

Freecall

AdrianC said:

So, if there's somebody wanting to buy, then by definition it is not overvalued.

In economics ‘market price’ makes several assumptions (perfect knowledge, balanced trading etc.)  It also assumes that there is no hysteresis present in the marketplace and that the demand/supply curve is not significantly distorted by external factors.

 

For many marketable goods, where there is strong supply and strong demand, ‘market price’ is a useful concept but where significant hysteresis exists or demand/supply is distorted, it is not a particularly useful tool for measuring value.

 

In the UK, housing is one such market.

The foremost mechanism in this market is price-demand elasticity.  When demand for something vastly outstrips supply as is the case with housing, then other external factors come into play.  In the case of housing, the dominant factor is the supply of credit. 

davidmcn

AdrianC said:

Umm, the very definition of a market price (which is what we mean by "value" here) is the price at which a seller is willing to sell and a buyer is willing to buy.

That's a buyer who can actually complete the purchase, not a prospective buyer who changes their mind once they realise they can't get funding.

OldMusicGuy

I don't think anyone answered the specific question from the OP. If the valuation is being done for the lender, you will not get to see it or be able to ask "why" it is a certain value. The valuation is done for them, not you. 

Paying for extras as part of the house price isn't what happens normally (most developers want you to pay cash up front with no chance of a refund if you pull out). So you have inflated the cost of the house without necessarily adding to its value. Hope it turns out ok for you.