Wooaah, low valuation.. What to do?

[GidgetGirl]

I’ll try and keep this brief.

Partner and I are cash buyers on a two-bed terraced property. We’re not in a chain and neither is our seller (their property is currently tenanted).

Property had been on the market for offers over £210,000 since April, and our offer of £213,000 was accepted just before Christmas. I thought that was the upper end of its worth, but not crazy - almost identical terraces in the immediate area (which I know very well) have been selling for around £205,000-£230,000 depending on condition. You very very rarely see one go for less than £200k, even if it’s in a bit of a state.

Anyway, just has the homebuyers report back and they’ve valued it at £170,000! That’s looaaaads less than I was expecting. There’s nothing hugely worrying in the survey - no subsidence, rot or significant damp issues. It needs repointing in places and generally updating (the boiler is about 40 years old..), but there’s really nothing scary.

So, what to do? Obviously a bit of renegotiation is in order, but how much? The seller is a little bit odd and nervy - wants to get the sale completed before April ‘for tax reasons’ or they will, apparently, pull out. That might be shite though and a tactic to hurry things along - who knows? They’ve given their tenants notice so they won’t want it all to go tits up now anyway.

So, £170k seems a VERY low valuation against our £213k offer. Seems a very low valuation against all the properties in the immediate area in fact, despite being a bigger (it’s wider and has a hallway while most of the others don’t). I’ve never had to renegotiate on a property before - what would be a reasonable way to approach it?

We got ours valued twice as the first was so low.

Are you able to have a conversation with the surveyor who undertook the Homebuyers report?

I would personally be uncomfortable buying for over a professional valuation. Even if it doesn’t impact you for mortgage purposes, as a cash buyer, it could harm you on onward sale.

Can you contact the surveyor and ask why they've given it this value?

Usually they just state how much you've offered, or very close. After all, if you're willing to pay for it then it IS worth that amount. I'd ask that first, then go to the vendors.

With such a huge disparity I'd think there's maybe some huge typo.

Yep, I’ll definitely speaking with the surveyor tomorrow. I think he’ll say it’s an accumulation of lesser issues rather than one huge thing, but even so £170k seems very very low. We shall see what happens... I’m hoping the sellers will be forced to renegotiate quite significantly.. They’re stupid if they don’t - the place needs upkeep and updating which they’ll have to carry out themselves soon if they want to carry on renting it out.

You might have under estimated the value of the work that needs doing.
For example you know the boiler needs replacing, but it could be the surveyor can see the whole central heating system needs over-hauling etc.

What doe the report say the areas of concern are?

I wouldn't offer £213k if the place is only worth £170k. House prices aren't going up in a hurry.

Surveyers take into consideration all of the property e.g. as well as the boiler and heating system they may factor in the whole house needs updating and redecoration. I would show the report to the vender and see what they say. They may suggest you pay a lower amount. I personally would not be paying more than a house is valued at. Or you could get a second valuation and see how close to the first valuation the second one is. If they won't drop their price I would walk away. Plenty of other houses on the market.

What was the reasoning behind offering over £210 when it had been on the market so long? Is it possible that whatever made you do that is has caused the difference?

RIGHT then - two follow-up points of equally vital importance -

1. In my fevered rush to plow through the report I misread the figures - the valuation is actually £210k and the cost for rebuilding is £170k.

1. I’m an idiot - ignore me and move on.

So funny

Small things, but this has made me properly chuckle 🤣

Ah - mystery solved!! Thanks for fessing up though!

It’s easy done, the 2 numbers are very close to each other on the report

That's good!

Thanks for coming back op. First proper chuckle I have had today. And it's been a long day. Good luck with it all.