Negotiating an offer - after survey with no major issues

srodgers123

Hi,

I have a survey completed. The survey revealed no major defect or issues and the property is structurally sound (other than notes on minor points that should be part of routine maintenance and typical limits of observation as well as associated suggestions for specialist checks). However, Surveyor valued the property 10% less than my offer based on comparables. Before my offer, the property was sold a couple of times within weeks but sale fell through each time due to changes in buyer conditions (what a time we live in!). As a result, the seller increased the asking price by roughly 10% in the first re-advertisement, then decreased as expected close date is now past stamp duty holiday. Both asking prices are significantly higher (within the region of £50k to £100k) than the surveyor valuation. 

So, basically I don't have anything that I can ask seller to fix or get quotes and use them as a basis for lowering my offer. I would have expected my offer price is 5-10k more than the "actual" value of the property but didn't mind that as I wanted to close this one quickly. But now, I am not quite sure what to do.

Any advice?

Mickey666

There is no "actual" value of the property.
You guessed one figure was appropriate when you made your initial offer and now your surveyor has guessed another figure.  Pay for another another valuation survey and you'll likely get yet another figure.

You were (presumably) happy with your original offer, the survey has not identified any problems, so why not just stick with your original offer?   Alternatively, just drop your offer if you want to (you don't even need to justify why), but be prepared for them to refuse.  What will you do then?  Walk away or sheepishly go back to your original offer, thereby painting yourself as an untrustworthy chancer?

greatcrested

This was your own,private, survey?

Are you getting a mortgage and has the lender done a separate Valuation? If so, what was that valuation and has your mortgage been approved?

If a cash purchase, you will have to decide whether you now believe the property is still worth to you what you offered.

If so, pay what you agreed.

If not, reduce your offer and be prepared to walk away.

srodgers123

Thanks Mickey666 and greatcrested. 
Survey is was a private survey I commissioned. Mortgage is already approved, they did a desktop valuation and said all good unless the property value drops below a certain threshold (low LTV mortgage). Surveyors valuation is still considerably higher than the threshold lender put down.

RelievedSheff

So where is the problem?

If you still want the property just go ahead with the purchase.

Property valuation isn't an exact science.

srodgers123

Thanks RelievedSheff.
It's only the resale value that is worrying me. In the end, this is also an investment, right? 

amandacat

The house I’m buying was valued by the mortgage lender at 8% less than I’m paying for it. I did think twice and worry I’m overpaying or I’ll lose money if I sell but there seems to be a lot of down valuations currently and I don’t think the seller would’ve reduced any further. 

greatcrested

srodgers123 said:

Thanks RelievedSheff.
It's only the resale value that is worrying me. In the end, this is also an investment, right? 

You planning to sell in the next year or two?  In that case i's a poor investment anyway once you take into account SDLT, estate agent fees, removal costs, legals etc. Better to put the money in unit trusts or under the mattress.

If you plan to live there longer term, well, the market will move, up, or down, and any difference in purchase price will become increasingly swallowed up/irrelevant.

And if it's a home you're buying, the investment aspect becomes less important anyway - though granted not irrelevant. You get a place of your own to live in for X years and that has a value in itself.

Nike79

if the surveryer downvalued the property i would re-consider. Remember that with mortgage valuation the lender is only interested in recovering their lending bit and NOT your deposit. So if the property worth 100K and lender gives you 80K they only interested in checking  if the property worth 80K or not. 

Falafels

I'm not sure what the problem here is, exactly. You've sufficient funds and your lender is fine. There are no significant issues thrown up by the survey. I wouldn't worry about the valuation given by the surveyor; as has been said elsewhere, it's not an exact science, and a different valuer would likely give you a different figure.

The resale value is only relevant when you come to sell; if you try moving within six months you wouldn't be able to sell to anyone who needed a mortgage in any case. Since you put up your original post, the SDLT holiday has been extended - presumably offering you further savings - and house prices are still rising (according to Nationwide).

Sure, you can drop your offer, but what are you going to do if your vendor refuses?

In your place, I'd heave a sigh of relief at the OK survey, and carry on with the purchase. Good luck!

Hannimal

If you were willing to pay what you offered, then that would be the value of the property. You would request sellers accept less because someone else - who has no interest in buying it - said it was not in their opinion worth quite as much as you've offered. 

If it's an investment property that is one thing. But it sounds like you're buying a home. It is up to you to decide what you think the property is worth for you and with what you have offered it sounded like you thought it was that. You can now re-negotiate and depends how desperate the sellers are what they'll do with that. No harm in trying - and it's a big business transaction so you could let them know you are getting cold feet due to the valuation.

HOWEVER, how does the surveyors valuation compare with EA valuations? They're all experts at that.