Valuation from Surveyor differs from Bank Valuation

Definite

Hi

Not stressed but thought it worth asking the question. We offered on a house and agreed at the beginning of December. Mortgage was applied for and approved at the agreed price (350k) . Banks valuation was at the agreed price and all is going along nicely. We engaged a surveyor to complete a homebuyers survey in addition and she did so a few days ago. Her valuation came in 16k under the agreed price. She shared this info with the estate agent, who called me this morning and proposes to ask the vendor for a reduction based on the survey. If the vendor is happy to move the price, then we are happy, but if not, we are still happy as we are not buying the house for the short term and would be more than comfortable paying a premium for the location and for the house. 

My question is this. If the vendor is unwilling to move the price, are we under any obligation to inform our solicitor or the bank about the new valuation?

davidmcn

No - and the two valuations are within normal margins of error anyway, so I wouldn't get overly concerned if it's not affecting your affordability etc.

greatcrested

I'm amazed the EA, who works for the seller, not you, is proposing a price reduction. If I was the seller I'd be furious that my EA was doing this.

eddddy

I got flamed on this board for saying this previously - but I'll say it again anyway.

Your surveyor is working for you (not the bank), therefore they do things in your best interest. So your own surveyor often tends to value low, because that may be helpful to you.  You can use then use their valuation to try to negotiate a price reduction. 

Definite

greatcrested said:

I'm amazed the EA, who works for the seller, not you, is proposing a price reduction. If I was the seller I'd be furious that my EA was doing this.

I think that the Estate Agent felt that the house was over valued through the bidding process ( price went 90k over asking, although it was put on at a lower start price to encourage bidding). Also, she is a very decent person and we have been very straight and transparent with her throughout, so perhaps she has a sense of fairness. Who knows? 

numbercruncher8

The EA also works for themselves though. If they have a sense of fairness I think it's co-incidental.

For instance if they think the seller is a gullible soft touch who badly needs the sale and panics at the thought of bad news it's entirely understandable why they may do this.

Definite

Just an update to this. Thanks all for the advice. We approached the Vendor and suggested a 10k price adjustment based on the survey valuation. We felt that this was a fair offer. They accepted and we are moving forward. 

lookstraightahead

That's fab news.

EAs will over value
 banks are wary of inflated prices
surveyors are on your side. 

What a headache it all is 😂

Crashy_Time

Definite said:

Just an update to this. Thanks all for the advice. We approached the Vendor and suggested a 10k price adjustment based on the survey valuation. We felt that this was a fair offer. They accepted and we are moving forward. 

Down I presume? The seller is probably punching the air that you didn`t ask for more.

Davesnave

greatcrested said:

I'm amazed the EA, who works for the seller, not you, is proposing a price reduction. If I was the seller I'd be furious that my EA was doing this.

The EA may have their own reasons for thinking a small reduction now will keep everyone sweet, rather than have the OP brooding on the valuation and then asking for something off further down the line. They work for themselves first and a minor change like this will scarcely affect their fee.

Definite

Davesnave said:

greatcrested said:

I'm amazed the EA, who works for the seller, not you, is proposing a price reduction. If I was the seller I'd be furious that my EA was doing this.

The EA may have their own reasons for thinking a small reduction now will keep everyone sweet, rather than have the OP brooding on the valuation and then asking for something off further down the line. They work for themselves first and a minor change like this will scarcely affect their fee.

I think she appreciates that we have been transparent from day 1. We had a DIP before we offered, we were clear throughout the process and she has facilitated visits from an architect, a builder etc to the property so she knows that we are committed. Also, we didn't look for an unreasonable adjustment in the price.