What offer to valuation gap would bother you as a buyer?

[Lovethesea]

We are waiting on the valuation for a property we've agreed 220 for. Nervously.

We think it's a good price for the house, but it's hard to tell with not much on the market there, odd national housing market, falling prices etc.

So, hypothetically, if you got a valuation in this market saying less than 220 would you expect the purchaser to drop to that price? Or would you think it was close enough if it was within 5k or 10k?

How far down would concern you?

Would you offer to meet halfway?

Hopefully this won't be an issue but it's going round and round my head so I wondered what the general consenus is on it. Help!?!

It would depend how much I liked the house and how large my deposit was - if I loved the house and it came in at #210k and I was a cash buyer, it might not bother me, if it came in at that and my lender wouldn't bridge the difference, it would be a problem (especially if I was a bit meh about the property anyway). I'd always ask for a discount though even if it weren't crucial to me.

Any difference would bother me purely because a mismatch between valuation and the price we offered would mess with our loan to value ratio too much.

It's something that worries me, we have made offers on what we can afford providing the valuation matches up. If it didn't we wouldn't have a lot of choice but to walk away if the vendors wouldn't drop their price.

It entirely depends on whether you need a mortgage based on the higher amount.

A house is worth what someone will pay.

The valuation done by a surveyor is based on such spurious data (what houses with similar number of bedrooms fairly near by have sold for recently) that it can only be described as a guide at best.

And don't forget, because of this, if you pay the higher price for a property then the values shoot up (or of course potentially down) to that amount.

The valuation done by a surveyor based on spurious data such as number of bedrooms and similar precedented house sales in area - as opposed to the valuation done by an EA based on hard cold fact of take a large number, double it, and add on 20%? Arf

The thing is, and I've seen it with valuations around here, that if the houses are very similar it works well.

When you have, for example, two 4 bed detached houses, one with a lounge pluse kitchen diner, and the other with kitchen diner plus 3 other reception rooms; bedrooms which are all much bigger; a utility room garage and a cloak room and en-suite which the first house doesn't they simply aren't worth the same. Previous sold prices will show that house b has been worth at least 30% since first built, but they are both 4 beds, in the same road.

If the last few houses sold are like house b then the method surveyors use makes them over-value house a. And conversely if the last few houses sold were like house a then they under value house b.

Absolutely estate agents will inflate prices. But just because the surveyor values a property at less than the agreed sale price, doesn't necessarily mean they are right.

At the end of the day you need to use it as another bit of information to help make your decision, bearing in mind how the figure was reached.

I would hope that overall square footage would be taken into account. Values which took into account actual area of living space would be a very good thing.
If (mortgage) surveyors and EAs based valuations on tangible data then maybe the market wouldn't be in such a mess.
Forgive my sarky comment above, BB, but your statement made me boggle

For me it would only bother me depending on what I need it to be for financing. Other than that I'd be happy to pay what I felt it was worth to me. Mind you, I would have done a lot of homework on the area, the houses in the area etc so it wouldn't just be a stab in the dark.

When should you get the valuation?

Valuation is being done tomorrow morning so hopefully we'll know soon. It's a mix of being new to the area and not much on the market local to this house. We've been searching sold prices but there's some variations it's hard to pin down - could be internal space, or condition, or an inter-family sale that screws the average.

We just sold in Scotland so all our experience of the local markets there is pretty useless here.

Hoping s/he comes back with 220k and we can breathe and carry on to the next thread hurdle.

Good luck lovethesea, and no problem monster!

I don't think anyone is ever accurate!

My MIL bought a house on a huge estate (joined 3 villages together) about 18 months ago. Nothing had sold in her road for about 5 years, so the valuation was clearly based on houses in nearby roads. But we'd looked round them and they were laughably different! It obviously wasn't the first time, as an earlier sale had fallen through based on the valuation. Luckily MIL was a cash buyer and so she could use her discretion.

I'll be interested to see what happens when we have to remortgage next year. Given my a-b example, if you keep the differential then my house has gained 20% since we bought at the height of the market based on what a house 2 doors down has just sold for.

It just makes me wonder how surveyors can get away with charging for valuations that are so lazy, and it's so unfair that people's dreams can be dashed by lenders believing such rubbish.

But I don't know the answer!!

How far from the £220 can you afford for it to be (wrt mortgage etc)??

It came back at 220k. Phew. Very relieved. We will be eating beans on toast for the next while as this is taking all our savings, if we had a big gap in valuation/offer we would have really resented all the cutbacks we need to make for a while. We could've coped with some difference, good LTV ratio so the bank would be happy anyway, but I think we would have had to renegotiate if valuation was less than 215k..........

And breathe. Back to chasing the solicitors now ....

ours came back at £1K less than our ofer, so we negotiated it down. This was on an offer of £201K. If it had come back significantly less, we'd have continued negotiating!

Excellent :)

Did he know that was what you offered?

Keep us posted - we need to know if it all goes through OK or not!

Sprinkle a little cheese on top - it makes all the difference

I don't know if the surveyor knew, I am presuming he was told by the bank - the offer price is 220, so go see if it's worth it. Any issues to do more survey work on? No. Fine. Anyone work in a surveyors? Do they know before they go out?

I read somewhere they seldom value a property above the offer price, unless it's a low sale (ie selling within a family). So I presume that means they go out knowing the offer price and work from there? I suppose it could cause issues if they started saying it was worth a lot more than the offer and that got back to the vendors somehow?!??

Cheese on beans on toast. Absolutely. We are living with family and my parents have the smallest freezer so I can't bulk cook anything. Can't wait to get organised.

That reminds me .... need to buy a fridgefreezer/washing machine ... our buyer threw a wobbly at the end of our sale in scotland and demanded all our furniture be left or he wanted the price dropped! That was less than a week before date of entry (completion). We said white goods or nothing. Thankfully he agreed to keep the price and take our white goods.

At least I can get a big freezer for all my economising

Lovethesea - my valuer knew, but I had a right mare over the whole thing. I'm glad yours has gone OK!

Do you have a settlement date?

I bought my washing machine through Boots (online) applicance centre - they were brilliant! I had a problem with a machine, the replaced it next day, no questions asked. No hassle. No cost. I'd use them again for sure! (same price as everyone else as well)

How long ago did you first put the house on the market in Scotland?

We spent ages cleaning, decluttering and relocating ourselves south to stay with family (DH, me, DD age 2 and DS 9 months). Left it all shiney and child-free for the estate agents to show. House went on the market March 17th, had a viewer Friday March 18th who offered on the Monday! Negotiated them up a little that week and they moved into the house on 18th April. Lovely fast Scottish system.

We did price it to sell though - and sold at 135k, 19k LESS than we bought for in early 2008. Ouch. But we knew we were buying a bigger house here so hoped that would be equally lower in price to cancel that loss out. We also sold for the surveyor's valuation so we felt it fair to us and the buyer. Home reports are still in place up there so we had to have a survey and valuation all prepared anyhow.

Thanks for the Boots tip - I got my double pram and a ton of advantage points through them so I will check them out once we know what size appliances we need.

We hope to exchange really soon on the new place, and then complete at the end of July as the vendors are moving into a new build and it needs to be finished. Fine by us! More time to save some pennies .....

Wow - that was a quick sale! Just goes to show if a house is priced right it will sell - and fast! The Scottish system has it's pro's & it's con's - but yes, it's quick!

Do you feel that the house you are buying down here is an equally lower price?

Other than the freezer it sounds like it's going OK living with your parents so far... long may it last!

Fingers crossed that it all goes to plan!

It's still on Rightmove! www.rightmove.co.uk/property-for-sale/property-18353580.html See - all shiney and childfree!!!

It was absolutely exhausting getting it ready while juggling two wee ones. So glad we left if for the agents to do viewings.

I think the house we are after here is on lower than it would have been, but prices here probably aren't so low as we are buying in a nice village near the city and main road links. We could've found more house in other areas but wanted somewhere with decent schools etc. We plan to stay there for many years so hopefully the prices will fall and then climb back up eventually.

wow Lovethesea, I went to school near your old house! the local secondary :)

Lovethesea - it's a nice house :) It does look all lovely and spic n span... it has that 'ready to move in' look to it, you did a great job and I'm not suprised you wanted the kids out of it

It's a juggling act to get enough house/good location/commuter links/good schools.... something has to give somewhere!

Fingers crossed still!

Thanks! We had another viewing today, peered in detail, took a ton of photos etc. Vendors were lovely and just let us potter about plotting and planning.

It was still lovely as we remembered. Bit more tired decor wise but you always think that when you see somewhere again! Nothing a coat of paint wont fix and it would be nice to make it our own; all the glossy houses we've visited were not quite our taste anyway (we are simple people with small children, no black and silver bedroom please!)

We get the impression the vendors are being straight with us so hopefully we'll exchange very soon.....

Yes - the second viewing always makes you see things in a slightly more realistic light doesn't it :) Still, as you say, it's a good thing it's not all 'perfect but not your taste' because you have a good reason to do it up and make it your own family home and not have it how someone else thinks it should be.

Have you had full survey done?