The house we are buying has been reduced in value by the survey

[LaAmanda]

What do we do now? We live in France but are coming back to London and have put an offer on a house that we kind of know.

The survey has just come back and it's been valued at 80k lower than what we've offered.

Can someone please tell me what happens next? We've never bought before as we've been serial renters.

I was about to post what Edless said, a house is only worth what someone is prepared to pay for it - you were prepapred to pay the extra 80k.

Your surveyor doesn't agree with the price but that doesn't mean the house isn't worth it. If you are not dependant on mortgage and it's the house of your dreams and you were happy with the sale price then why mess around and risk losing it?

So you've offered £900k and it's been valued at just over £800k?

FGS just phone the estate agent and tell them that, and that you are still interested in the house, but that you feel you ought to reduce your offer accordingly and could they ask the vendor how they feel about that! You shoudlget some sort of feel what the next move shoudl be from that, and any subsequent conversations.

There is NO expectation or reasoning that either you or the vendor should take the hit. It's a negotiating game. If you're ultimately happy to pay almost £100k over the odds then you can negotiate confident in the fact that if the vendor doesn't budge you will still get the house (I wouldn't pay over the odds - but that's me. You have you own views obviously.)

If the vendor is willing to come down to the surveyor's valuation then great - you've got the house of your dreams and saved quite a lot of money.

In all likelihood you will negotiate to a position in the middle that you are both comfortable with.

Just make the call!

If it has been valued by a surveyor at £80k less then surely that is what it is worth? No matter how much i wanted something I would never pay over the odds for it. And certainly not £80k.

Saying that we live in Scotland where a Home Report makes a Survey mandatory for all houses, and even as a cash buyer i would want an up to date survey showing valuation. In your shoes I would be reoffering at £80k less and if the sellers disagreed then Id think they were living in cloud cuckoo land.

Isn't this scenario what played a big part in the property bubble/crash, people paying vastly over inflated prices for houses that just weren't worth it?

Thanks all. I agree with what most of you are saying. We are not prepared to pay what we originally offered as we did not realise that so much of the house needed so much work done to it. I really wanted advice on how to proceed from this point and you've given me food for thought. Thanks again.

I don't think it follows at all that a house is marketed at what it's 'worth'. It's marketed at what the vendor and agent think they can achieve. These two things are NOT the same as the OP's situation shows. I would expect to pay what a house has been valued at. A 10% reduction is not excessive.

When this happened to us (we were the vendors and the buyer's survey WAS linked to the mortgage lender) we just put it back on the market and told the estate agent not to let anyone with a mortgage from that bank to view....Sold again in a day. This WAS several years ago, but our neighbours have just done exactly the same thing in the last month. Sold for an even higher price two days after they put it back on the market. I don't think it is all doom and gloom for sellers in London.......?

Jan - did the survey identify a problem with the house? Because if so I think that putting it back on the market and hoping no other valuer would spot it is morally dubious to say the least!

Do people in England even purchase properties without an up to date survey? Seems like madness to me!

Yes :) i bought without survey - but then my house is single-storey and had nothing outwardly wrong with it - depending on the kind you get they can be fairly perfunctory and non-binding -

structural engineers survey - binding and detailed - i'd hope this was the kind the op has given the value of the property!
surveyors survey - not very binding but likely to point out one or two things
mortgage company valuation - might even be done using Google earth/streetview & zoopla!

i wonder at what value would be appended by a surveyor to our house if they relied on zoopla - as recent sales in our area have been largely repo/probate properties bringing the sold average price down...

Because if so I think that putting it back on the market and hoping no other valuer would spot it is morally dubious to say the least!..

and quite likely they'd wind up in the same psition, possibly with a lower initial offer..

Sorry have not been around - no, no problem identified with the house. An out of touch surveyor maybe?

Well, that was quick.

Perhaps, sadly predictably, the vendors have said that the amount we said we'd pay is what they will accept from us. They do not accept the surveyor's report.

We're not going to pay over the odds for a house - much as we do like it.

Well either you tell the vendor that your offer remains on the table for x number of days / weeks. Whether they bite will depend on how many people they're getting through the door and how many (cash) offers they're receiving. You can always throw in some flexibility on how long / short you can be over exchange and completion.
Alternatively, you can decide that a 9% reduction from a cautious surveyor is something you can live with for a house of a type that is unlikely to come up again in a hurry and you'll offer the price (maybe get some curtains thrown in with it?)
although it's a large cash amount, it's not a large % in value terms and in decent areas, good family homes are in short supply. You're in it for a home not an investment.

But surely a surveyor's opinion on a value of a house is no more relevant than anyone else's opinion (whose done their research obviously). Houses don't have a set value, it's all down to opinions and everyone will have a slightly different opinion. Obviously in times like these, the surveyor is looking to cover his back by not over-valuing - he may be trying to future-proof it slightly.

If you were happy with what you thought the house was worth, I'd take the surveyor's valuation with a pinch of salt. You never know, if you approach them about meeting in the middle somewhere, or a smaller reduction, they may be more open to it, rather than the full £80k off?

But surely a surveyor has a more realistic view of a house's value rather than an EA - who are in all honesty just out to make the most for their clients'/themselves.

We were happy with it until we realised that nothing has been done in the house for over 30 years and gas, electricity, windows, roof will all have to be redone (and that's just for starters).

If the surveyor downvalued for a cash buyer, they'd have downvalued yet further for someone stretching themselves.

I'd hold your fire. Keep talking to the vendors and say you're still interested but recognise they're protecting their own interests. Periodically get in touch, perhaps letting slip slowly that you'd be inclined to compromise on the price to get a deal done (a privilege you wouldn't have if you'd needed a mortgage!)

Then I'm afraid you need to hang fire and see what happens. You may find yourselves outbid (there's always a greater fool), but you may find the vendor comes back to you in a few months.

Can you wait that long and is that period of limbo worth saving £40k, or more, to you?

Personally, I'd wait. You haven't said whereabouts in the country you are looking, but I'm struggling to think of many places in the country where a cash buyer with close onto a million quid in the bank is not going to be able to find a good house, particularly given the economic news of the last week.

I agree with thomas and say wait it out for a bit. Make it clear how strong your position is and your revised offer is on the table for the moment. Also outline the work the surveyor says needs doing to justify the money off.

If it needs the amount of work you are outlining, anyone is going to ask for more money off once the survey is done and they realise how much they are going to have to invest in it.

FYI we have quite a high household income but had terrible problems getting a mortgage recently, it really is not easy at all getting loans at the moment as the banks are so nervous. EAs have told me chains are collapsing all over the place due to people not being able to get mortgages, so do not underestimate the VERY strong position you are in as a cash buyer. If this falls through, you'll be able to get a great discount off another place because of it.

The house was worth your original offer to you when you didn't know the roof etc needed doing. Now you know, it's value to you has dropped and your costs associated with buying it have risen. I think the vendor is being very silly. I agree - wait it out and wait for them to blink first or get a better deal on another house.

My friend, trying to make me feel better, has just sent me this link house prices fall -2.4% in one month

Perhaps it was all meant to work out this way ?

DH is retraining to be a building surveyor and is asking members of the general public to answer only 10 questions on their understanding of residential building surveys for his dissertation. Please can you spare a few minutes:

www.surveymonkey.com/s/K995BZL

This survey is anonymous and will be used for academic purposes only.

Looked like this thread might have some views to share on building surveys.