What should I do with bank "Down valuation"?

user1977

amsjrt said:

user1977 said:

£65k is "large" in most contexts, but not when talking about a very expensive house. Assuming the "real" answer is halfway between the figures, it's £887,500 +/- 3.7%. Which is within the normal margin of error for valuations, so not necessarily all that significant.

In terms of % difference, what is the normal margin of error for valuation?

+/- 5% - and more than that where it's a newbuild, or there is a lack of comparables.

amsjrt said:

With recent property price growth, do you think the surveyor has taken that into consideration

My question is whether Surveyor could be undervaluing this property?

The surveyors only work from comparable data, which means completed transactions, which are often agreed six or more months prior to the data appearing. So they won't normally take into account very recent transactions (because they don't have any definite details about them), though sometimes will comment that they're aware of other current sales going for above asking price/valuations. In that sense, if it's a rising market then the valuations will tend to be undervaluations as the current values are higher, they just can't be proven to be. Given this is a money-saving website though, you might be better to consider this as you overvaluing the property (you admit you hadn't actually looked beyond the asking price) rather than the surveyors undervaluing it.

amsjrt

user1977 said:

amsjrt said:

user1977 said:

£65k is "large" in most contexts, but not when talking about a very expensive house. Assuming the "real" answer is halfway between the figures, it's £887,500 +/- 3.7%. Which is within the normal margin of error for valuations, so not necessarily all that significant.

In terms of % difference, what is the normal margin of error for valuation?

+/- 5% - and more than that where it's a newbuild, or there is a lack of comparables.

amsjrt said:

With recent property price growth, do you think the surveyor has taken that into consideration

My question is whether Surveyor could be undervaluing this property?

The surveyors only work from comparable data, which means completed transactions, which are often agreed six or more months prior to the data appearing. So they won't normally take into account very recent transactions (because they don't have any definite details about them), though sometimes will comment that they're aware of other current sales going for above asking price/valuations. In that sense, if it's a rising market then the valuations will tend to be undervaluations as the current values are higher, they just can't be proven to be. Given this is a money-saving website though, you might be better to consider this as you overvaluing the property (you admit you hadn't actually looked beyond the asking price) rather than the surveyors undervaluing it.

Thanks. So it sounds like it is possible that a surveyor underestimates it a little bit while the vendor/estate agent over-estimate it a little bit via the asking price. And I obviously blindly accept the asking price as I don’t have any comparable properties to assess whether it is a fair price or not. 

I will going to speak to my surveyor on Monday and understand more how he comes up with the valuation in case he may not have comparable or outdated properties to come up with this valuation. 

Thrugelmir

amsjrt said:

user1977 said:

amsjrt said:

user1977 said:

£65k is "large" in most contexts, but not when talking about a very expensive house. Assuming the "real" answer is halfway between the figures, it's £887,500 +/- 3.7%. Which is within the normal margin of error for valuations, so not necessarily all that significant.

In terms of % difference, what is the normal margin of error for valuation?

+/- 5% - and more than that where it's a newbuild, or there is a lack of comparables.

amsjrt said:

With recent property price growth, do you think the surveyor has taken that into consideration

My question is whether Surveyor could be undervaluing this property?

The surveyors only work from comparable data, which means completed transactions, which are often agreed six or more months prior to the data appearing. So they won't normally take into account very recent transactions (because they don't have any definite details about them), though sometimes will comment that they're aware of other current sales going for above asking price/valuations. In that sense, if it's a rising market then the valuations will tend to be undervaluations as the current values are higher, they just can't be proven to be. Given this is a money-saving website though, you might be better to consider this as you overvaluing the property (you admit you hadn't actually looked beyond the asking price) rather than the surveyors undervaluing it.

I will going to speak to my surveyor on Monday and understand more how he comes up with the valuation in case he may not have comparable or outdated properties to come up with this valuation. 

RICS surveyors will ring round a number of local agents and ascertain recently agreed selling prices and general market activity for properties in the wider locality.  From this they'll form their own opinion.