Homebuyer survey undervalued house we're buying

[theheatherjane1]

Hi

We're buying a house in Herts, long drawn out process so far.
Had survey results back today and he's valued it at 400.000 whereas we had an offer of 440.000 accepted.
We were fairly happy with the price until seeing this as we'd seen a fair few houses before this one and it seemed to be an average price for what we were looking at.

Any thoughts about why the valuation could be so low?

Thanks

Nope, but I'd be having a full structural survey done before shelling out that amount above market rate on a house.

We paid a similar amount over the valuation for our home - we've been here for 20 years, and it was worth it. We just took the view that it would catch up eventually - and we knew it was the 'forever home' we wanted. We had been house-hunting for two years though!

You could use this to lower the offer.

What about your valuation survey? Has your lender valued it at 400 or 440?

I am not sure how it works with Homebuyer survey as I have ever done only structural that does not provide valuation but perhaps the difference in price is after taking into consideration all identified work?

The bank survey came back at £440.

It's definitely not our forever home, it's more our 'shit, we're having a baby next month and we need to move asap' house!
So, slightly different criteria.

I'm not even sure I believe the Surveyor's estimate, it does seem fairly low

If the surveyor was from out of area they'd possibly not get it right. I had my last house valued, in 2015, at below the value the identical house next door sold for in 2010 - and that was by a surveyor from 50 miles further away from London than my house was.

Phone or email the surveyor and ask him to explain the valuation to you - like what precedent transactions be referenced, what features of the house lead him to that value etc.

TBH mortgage valuations are generally more conservative so at least you don't have an issue with being pushed into a higher LTV%

I had some questions on my homebuyer value and he was really good at explaining his rationale.

I've had a look at sold prices for the road and ours is quite high, the vendors bought it for 390 a year ago and they've not done a single thing to it since.
We checked back in with the Surveyor, who is local, and his rationale was that other properties in the area were going for much lower, but if I go on Rightmove I'm not really sure where he's looking because I don't see much for sale at 400, a few flats and some tiny places of the type we saw when we were looking a few months ago.
Previous sold prices for the road are considerably lower than we're paying but not much has sold there this year, so it's hard to judge.
We've spoken to the estate agent to discuss the situation and he scoffed at the valuation (obviously). We've also asked if they would be willing to negotiate (I suspect no). Waiting to hear.
It's very confusing.
We feel completely out of our depth with this.

Thanks for taking the time to respond.

that's a 13% annual increase - is that actually what has happened in your area?

The surveyors valuation assumes only a 2.5% annual increase n

This surveyor assumes 5-10% depending on where I'm working.
Phone or email your surveyor and ask about it.
If your mortgage valuation said £440k then it's not going to affect your loan so just ask.

There may be property on Rightmove for more but are they selling at that price? If you check the Land Registry or Zoopla or similar you can see what properties have actually sold for

I went back on Rightmove and looked at houses that were under offer and I see what he means, there's been a slew of cheaper properties sold since our offer was accepted a few months ago. Plus a similar house to the one we're buying that sold on the same road for 390 a few months ago.

Agh! Decisions!
Being a grown up is dull sometimes.

OP did you figure something out? I'm in a similar predicament as the home buyers survey came back with a valuation lower than what we offered. (The mortgage valuation was fine though)

Ah yes.
We renegotiated and vendors knocked some money off. The price we're paying is still way more than the valuation which has left us feeling somewhat uneasy.
Ho hum.
Definitely try and negotiate, you've nothing to lose.
Good luck

Ah, well at least you got some off!

My surveyor said the same, that houses around us went for much less but then when I have looked online I can't find these wonderful cheap houses he talks of! I think surveyors have to be overly cautious, well I'm hoping it's that

Hope it works out for you.

Bear in mind that the surveyors will get 'comps' (comparables) by asking estate agents what they have under offer, so they are looking at prices before they get on RightMove sold prices, so likely to be more 'current'.

We had a valuation from an outside-London surveyor whigh was about 20% lower than our offer. The justification was basically 'ugh, there are council tenants within 100 yards!' - well yes, hard to go anywhere in the area where that's not the case. Ended up getting a mortgage with a bank that let you pick your own surveyor.

If the valuation survey is fine and you want the house, go with it - you may be paying a bit over the odds but having a move done and dusted iso worth a fortune!

I have never seen a homebuyer valuation come in lower than the banks valuation