House has been undervalued and sale has fallen through

[ohhahhh789]

So I accepted an offer of asking prices in June. The survey has just been done by the surveyor linked to the buyers mortgage application and they have under valued my house by £15k so the buyers can no longer proceed. I'm really disappointed. I had 3 valuations at the time I put the house on the market, all valued at the same price. House sold straight away at asking price. I don't want to reduce the price just get given above but now I'm worried this is going to happen again. Anyone been in this position?

This is what happens when house prices are falling.

At a guess, the three valuations you had when you put it on the market were all from estate agents who wanted your business and therefore had every incentive to overvalue the property. In any case, estate agents are mostly not trained valuation surveyors.

The first person who valued your house who had something to lose by getting it wrong was the mortgage valuer. He got the right answer.

It’s no loss to you, because the property you are going to buy will also be cheaper.

There is no incentive to an estate agent to overvalue a property when they know a surveyor from the mortgage provider will be assessing it at some point. They’re job is, of course, to get the best price but also to manage expectations. Part of it will be they can only value a property based on appearance and comparing local like with like, so it’s subject to change after a more in depth inspection by a surveyor. If 3 separate estate agents valued it at around the same price, OP, it suggests that the surveyor found some underlying problems they didn’t/couldn’t see in tandem with unfortunate timing re the current dip in the housing market. Sorry you’re losing your sale but in this case I don’t think you can blame the estate agent.

Their job not they’re job, bloody hell!

No I'm not blaming the estate agent especially as I had 2 other value the same. The surveyor hasn't found anything wrong with the house, I think it's based on local properties. It's a difficult one as I'm on a not so nice estate where house prices are low but mine has a big garden and a drive unlike 95% of houses on the estate, plus it's not in the middle, it's literally the last house on the estate. 5 metres to the right is a lovely area where houses sell for around £40k more. I'll give it another go at the original price but at least I'm more prepared for if this happens again as I'll be forced to drop. It makes it difficult when house searching though as I really can't predict my budget.

Yes I sold a two bed house which I put on the market got higher than any other house on the street had sold for, including three beds. There was a bidding war but the agent warned it it went too high that the mortgage valuer would not agree and so we stopped at just a couple thousand over asking. Indeed the values did say it was worth £7k below agreed price so buyer came back with adjustment at £5k below that! A bit of tooing and froing and in the end sold it for my asking price (so £3.5k above what valuer said). Obviously the buyer had to come up with the extra dish.
By the way the agent originally valued the house £10k below what I thought (I flip houses) and I achieved my price.

Your house hasn't been ''undervalued'' it's been accurately valued... by a qualified professional rather than a shiny suited sales spiv.

If it is well priced (as seems to be) and you had an asking price offer straight away, then it may well be that someone else will still pay the asking price - but someone who doesn't need such a big mortgage.

The surveyor for the mortgage company needs to know that - should your buyer default on their mortgage - they will recover their money by putting it on the market and getting a quick sale. They, therefore can't lend the amount needed to buy at the price you want, but it might be that the next people to offer have a £30 000 deposit, and the building society is happy to lend the difference, as their loan to value is lower than your first buyers.

So - it's up to you. Do you need to move, or have a timescale you need to move to, in which case you might be able to negotiate something with the people you know want it, and, having sold it will then put you in a good position to negotiate with the people selling the next house you buy or do you want to gamble on sitting tight and hoping there is another buyer out there who will want to pay the full asking price and have enough of a buffer that their mortgage company are happy to lend the amount they need ?

@BackforGood I haven't found anything yet anyway. The people buying were FTB and I don't think in a fantastic financial position but my house is likely to attract those sort of buyers. I do want to move but I'm not in any hurry. Even though it doesn't seem much to those who have very expensive houses, to me and in my area 15k makes a big difference and it will have a massive impact on the properties I can buy, especially as I'm on my own. It would also mean that I only have @15k equity opposed to £30k. I'll put it back on and see what happens but at least I'm more prepared this time.

This happened to a friend and they went back to the surveyor/valuer person with a list of houses priced at what he said they were worth and why theirs was worth more.

So you evidence you are on the edge is the estate and houses in the other direction sell do £x more, that yours has significantly larger garden than the others, does yours have more potential to extend? Anything you can think of.

In the end he upped the value of theirs, can't remember if it was the full value though.

In your position I'd be trying to do a deal - if the FTBs are prepared to put in more of their own money it's possible and if you can meet them part way too? The problem with an EA valuation is that it's a guess. We had three EAs value our old house in the same bracket. We got lots of viewings and only one offer. That offer was £12k under the lower end of the valuation bracket. We accepted as we had enough equity to fund our onward purchase. It was just what we needed to do to move.

It hasn’t been necessarily correctly valued by the lender. The correct value is what a buyer is prepared to pay. Also, another lender might have valued it differently. Lenders are extra cautious at the moments because of the stagnating/falling prices in some areas and they call the shots as it’s their money the buyer is borrowing. Either try to meet half way if you can afford it or re-market.