low valuation on house sale

shazza1_2

Hi

we recently put a house on the market at £120k and got an offer within 4 weeks for £115k, which we accepted.

To our shock, the surveyor has valued it at only £100k - not because of any work needing doing but on the basis of his opinion of house prices in that area.

We have been researching the market for some time and there are plenty of similar houses for sale at a similar (or higher) price - and the house is totally refurbed with all new fittings etc so can't understand why the valuation would be so much lower.

does anyone have any experience of this?? :eek:

:eek:

Happy_saver_4

The valuation is only the valuers 'opinion'.

There is always a range of opinions of any particular properties value. Depending who wants or is employing the valuer to carry out the valuation and for what reason.

For instance, Building Society valuations always will err on the low side particularly if the purchaser want a 100% mortgage and/or a falling value market; as presently occurring.

nelly_2

He could be basing his price on what he thinks the value will be in the near future.

Maybe the lender has told them to do a six months from now valuation, if they lend 125 on a house thats worth 100 and have to repo it for whatever reason, then they will lose out big time, and bank's/building societies dont do "losing out".


Edit, in the interest of fairness I am in the firm belief that house prices are dropping and will drop further. Some one else who doesnt think they will drop might add an answer for you here, saying something like;

"the surveyor might have had a bit of indegestion that day"

Debt_Free_Chick

You say there are houses for sale at a similar or higher price, but unless they've actually sold at that price, then they could simply be overpriced.

Any valuation I've had - where the mortgage company has asked for the value - has always been on the low side, compared to both the asking price and the price actually agreed with the seller.

What do your buyers think? Are they bothered? Did they get their own survey & valuation?

cattie

shazza1 wrote:

Hi

we recently put a house on the market at £120k and got an offer within 4 weeks for £115k, which we accepted.

To our shock, the surveyor has valued it at only £100k - not because of any work needing doing but on the basis of his opinion of house prices in that area.

We have been researching the market for some time and there are plenty of similar houses for sale at a similar (or higher) price - and the house is totally refurbed with all new fittings etc so can't understand why the valuation would be so much lower.

does anyone have any experience of this?? :eek:

:eek:

This happened to me a few years ago. My buyer's surveyor put a value of £10000 less than my accepted selling price. What a huge shock & even my buyer was stunned as she believed the property was really an excellent price at the agreed price, which it was. My buyer was really keen & I didn't want to lose the new house I'd found so the solution we arrived at was that I drop my accepted price by a further £5000. I did consider paying out for an independent survey to back up the valuation of my property carried out by my estate agent when the house was going on the market, but I couldn't see that would actually make the buyers surveyor admit he had under-valued. I had also considered pulling out of the sale & going with one of the other potential buyers who had been really keen, but knew any delay would result in me losing this house I now have to someone else who desperately wanted it & had already tried gazzumping me.

I've never heard of anyone else having the same terrible experience of an undervaluation before now, so really feel for you.

Just as an aside, I paid about £5000 more for this house than I sold the other property at. This one has increased by about £30,000 in 3 years, but the other property has increased by £55-£60,0000 during the same time.

WHA

Have you seen the survey or is it just what you've been told by your buyers?

I have come across this a number of times when the buyers pretend their valuation is lower to negotiate a discount - it may be worth asking to see the report before you think about lowering the price.

I don't think that getting another survey would help. The buyer's mortgage company will use the report they've asked for and will not usually budge however many other reports you get, unless their valuer can be persuaded he's made a mistake.

shazza1_2

Hello again all - thanks loads for all your replies - i have now had the chance to speak to my EA who got the news from the surveyor - basically - he has valued the house at £100k after asking them for comparables - they have only sold 2 or 3 on the estate my house is on - and most of those are 'do-er uppers' (council/ex council houses) - although there were other houses which had sold for more than mine, he said he had to take the mean (as in average, not nasty!) of the prices - I'm stunned as i thought the basis of a survey was the condition of the place - it kinds of makes it pointless making any improvements it that's the basis of a valuation dunnit?!

It's a similar situation to Cattie's in that the buyers are gutted and have scraped together another £7k to add to it - I don't blame them to be honest as there is nothing on that estate in the same condition for any less than our agreed price - and some of them are up for more - so they are unlikely to get a 'done' house on that estate at that price.

My EA asked him to contact one of their competitors who has sold dozens of houses on that estate - I'm not sure if he did this - ironically, in the spring there were around 6-8 houses all up for sale for around £115-£120k - and they are all sold, leaving hardly anything else on the market there, so its hard to believe they were all down valued to the same extent.

The EA intimated that the surveyor was looking at at property price website and using that which is worrying as the area is in the midst of being regenerated - new shopping centre etc and prices are likely to have risen as a result of that .....

As you say, Nelly, our buyers are likely getting at 95-100% mortgage, so this has increased the risk for the lender and made them more cautious.

At the minute, my EA is going to see if its worth getting a second survey done and I've offered to go halves with the buyer - I'm tempted to drop the price to their £107k - although this means I'll need to pull out of my project on the same estate as it will no longer be viable - that one incidentally is a bankruptcy case and has been surveyed and valued at £90k despite being absolutely wrecked ...

anyway, I'm rambling - thanks again for your comments and support and I'll keep you posted!