Survey valuation way below sale price

L

Liath

Registered User
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guys n gals, I need your esteemd input again.

We're currently trying to buy a house, in the sticks (not in an estate, a one off house). Haggled the seller down from 300 k to 240 k. All grand. Some issues with planning permissions and converted attics, but nothing too crazy that can't be solved. Mortgage is secured, we're pretty much ready to go, supposed to sign contracts in January (subject to survey and all sorts of other things).

Now the problem: We just had the valuation and a survey done, and the surveyor came back with a valuation of 180 k, which is nowhere near the 240 we were going to offer.

He'll obviously has to report back to the bank - seeing that there is such a huge discrepancy between the original sale price and the valuation, the bank will probably only give us the 180 k, correct? (leaving all issues aside, just the pure loan based on the value in the eyes of the surveyor.)

How likely is it now for the seller to actually agree on this lower price (from your experience, I realise this is a thought experiment and can go either way), and how big would discrepancies be between surveyors (just thinking that if someone else gets another surveyor in, they might come up with a different value - I trust our surveyor, but someone else with little reputaitoin to lose may not be like that)?

We will give the lower offer a shot and see what happens, but I'd hate to see this house go to someone else...

Any experiences welcome!
 
cheers for that - I did a search, and couldnt find that thread. Good reading though!

Hm, this means that if the seller does not budge, we'll have to come up with roughly 80 k or lose that house. However, unlike the other poster, we haven't put any money down (refundable deposit), so we could walk away.

But does this mean that any other valuations will be around the same? (just wondering if the surveyors are all 'in tune' with each other...).
 
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Don't make bald assumptions about converted attics.
Either the vendors sort the problems out for you now or you may end up sorting them at sell on.
To fully understand the issues, you may need to check compliance with building regulations parts B C F K and L for starters.

I'm not sure who you used, but getting the house valued by an Estate Agent is not the same as having a proper visual inspection survey done by a Chartered Surveyor or Architect.
Similarly I'm not certain where the valuation came from if it was surveyed by a Chartered Surveyor.
Basically people are saying we're still 25% over valued based on rental returns.
Location can raise the sale price but you're in the sticks.
Check local sale prices yourselves locally.

You may have rose-tinted glasses on.
Measure twice, cut once.

:)

ONQ.
 
On a €180k valuation you'll only get a max of €165k from bank so unless vendor drastically reduces price don't sign contracts.

Why not present a copy of valuation to vendor and tell them that their price is still over inflated in current climate?

It's a buyers' market and a house in the sticks is harder to sell that one close to all amenities.

If they're unwilling to budge on price forget about it and look for another place.
 
onq said:
Don't make bald assumptions about converted attics.
Either the vendors sort the problems out for you now or you may end up sorting them at sell on.
To fully understand the issues, you may need to check compliance with building regulations parts B C F K and L for starters.

I'm not sure who you used, but getting the house valued by an Estate Agent is not the same as having a proper visual inspection survey done by a Chartered Surveyor or Architect.
Similarly I'm not certain where the valuation came from if it was surveyed by a Chartered Surveyor.
Basically people are saying we're still 25% over valued based on rental returns.
Location can raise the sale price but you're in the sticks.
Check local sale prices yourselves locally.

You may have rose-tinted glasses on.
Measure twice, cut once.

:)

ONQ.
Click to expand...

Cheers for your input!

I'm aware of the attic issues, but they're manageable.

The valuation came from our 'own' chartered surveyor whom we hired for a full structural survey - the estate agents valuation was way out, and I wouldnt trust them as far as I can spit them....I do trust the surveyor though.

Unfortunately, the prices around that area seem to be 2006 prices still, and there's not that many houses for sale, so not much comparison.

I am not gung ho on buying the house if it's so boldly overpriced, but I am seriously wondering whether it is likely that the seller will realise that this is what the valuation is, this is all we'll get from the bank, and they won't get much more out of anyone else, either, so for a quick sale, they should frop to 180 and let us have the house ;-)
 
Just a thought - is your surveyor's valuation giving you the reinstatement cost of the house? That's usually quite a bit lower than the market value. What did the lender's surveyor value the house at - that's the one that determines how much you'll ultimately be able to borrow.
 
The lender asked us to provide the valuation through our surveyor (which I find weird, but hey), so that's the 180. This seems to be the market value in his opinion (and I have reason to believe he is doing a good job).
 
The price you want to pay to buy the house is up to you and to how much money you can raise. If you feel the house is worth 240 and you have the money (from bank loan +your own money) then it's up to you to decide if you buy or not.

After all, the market price is decided by a willing seller and a willing buyer - no amount of valuations can come up with a market price of a house.
 
Liath said:
The lender asked us to provide the valuation through our surveyor (which I find weird, but hey), so that's the 180. This seems to be the market value in his opinion (and I have reason to believe he is doing a good job).
Click to expand...

this is strange. We are in the process of purchasing a house at the moment and the bank requested a valuation from an estate agent (they even recommended one) - the valuation from the surveyor will be the cost of the rebuild as the other poster said is. This is the same amount you would insure the house for.
I would contact your local branch and get them to recommend a valuer that they normally use..speak to the m ortgage advisor - if they say the same thing question them on it..seems strange to me (but i dont know much)
 
yes, I found it a bit weird as well, but we talked to the bank, and they said that the surveyor we chose was fine, and asked us to submit the forms for the bank valuation to him.

I am very confused at this point - I'll check again with the surveyor about the valuation, but I am almost 100% sure that he means the "market value" that he'll report to the bank, not the rebuild value for insurance.
 
Liath said:
I am very confused at this point - I'll check again with the surveyor about the valuation, but I am almost 100% sure that he means the "market value" that he'll report to the bank, not the rebuild value for insurance.
Click to expand...
Ask the bank for a list of approved valuers (estate agents) and get one of them to value the house, I'm sure that price will be around what you are willing to pay.
 
Liath said:
Cheers for your input!
Click to expand...
<bows>
And in Christmas week too!
But you're very welcome regardless.
I'm aware of the attic issues, but they're manageable.
The valuation came from our 'own' chartered surveyor whom we hired for a full structural survey - the estate agents valuation was way out, and I wouldnt trust them as far as I can spit them....I do trust the surveyor though.
Click to expand...
Up until this point I was nodding sagely at what you've written, but I have posted elsewhere about "full structural surveys".
What exactly does this mean - there are 12 building regulations - Part A, structure is only one of them - does this survey cover the others, does it do snag items or wear and tear in use items?
Fire proofing, alternative exits or upgrading [especially if its now 3-storey], winder stairs treads, head heights, vapour check, insulation, ventilation at eaves and ridge, minimum vent behind insulation in dormer roof - has he checked all these items?
The stairs and its head height is easiest to check - does it comply?
Unfortunately, the prices around that area seem to be 2006 prices still, and there's not that many houses for sale, so not much comparison.
I am not gung ho on buying the house if it's so boldly overpriced, but I am seriously wondering whether it is likely that the seller will realise that this is what the valuation is, this is all we'll get from the bank, and they won't get much more out of anyone else, either, so for a quick sale, they should frop to 180 and let us have the house ;-)
Click to expand...
Obviously they won't know until you send them a copy of the report. :)
Just remember that estate agents, in "getting the best price for the vendors" are usually bumping up their own fees, which ar epercentage based, as opposed to a fixed rate.
Plus AFAIK they accountable for anything they say or write because of their endless disclaimers.
The scuttlebutt is that we're still 25% overpriced based on rental returns, so your surveyor may not be a million miles wrong.
However, the rental market may be artificially low now due to economic factors and location attracts a premium that the rental may not reflect.

FWIW

ONQ.
 
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