Homebuyers survey value house £40000 less than agreed price

[fredafortycoats]

Not sure what to do.how can the difference be so much❓do we risk losing the house trying to negotiate a lower offer or just suck it up❓£40000 is a huge difference 😳

@fredafortycoats

We are cash buyers,hence the dilemma.I know if we were getting a mortgage it would have been rejected.But do I need to pay £40000 more just because I am a cash buyer❓

Very common at the moment. Buyers offering over the listed price and general inflation

Options depend on how much you can borrow and how much deposit you have.

Why have a housebuyers report as a cash buyer- that doesnt make sense?

How long do you intend living in that house, OP?

Why would I buy something without a survey,makes sense to me as it throws up thing like this

You have the cash. If you want the house then proceed.
If you are not totally sold on the house then try and negotiate a discount.

No point getting the valuation changed if you are genuinely a cash buyer.

Is this a forever house or are you likely to move again? If it is a stepping stone how likely is it that you would get what you paid for it if you didn't reduce your offer?

@fredafortycoats

Why would I buy something without a survey,makes sense to me as it throws up thing like this

You haven't had a survey- you have had a house buyers valuation?

In Glasgow, by all accounts selling prices have been going 10-15% above the valuation in the homebuyers’ report. So the agreed price may not be that unreasonable. As you’re funding it with cash, you don’t have to worry about the mortgage company reducing the amount you can borrow. In a sellers market, you need to think about whether it is worth it for you to secure the house you want…..

@EverydayCook

soupdragon the lender doesn’t need a reason if it’s a down valuation, other than they think you’re paying too much and they won’t fund that risk. The house can be a blemishless new build and still get downvalued to that level.

I know! That is not a tangible reason though and is subjective. Thus a different surveyor may not say the same thing, which is the point I was making.

40k down on 314k is huge - that’s 13%
I’d say the price needs to drop to within 10k of your valuation or you’re out. Prices will slump anyway in the coming months, so even at a much reduced price you may be buying at the top of the market

I think lots of houses are over-valued at the moment. We were advised by one agent to put our home on at 65K over his valuation to “test the market”. We declined and went with another. We didn’t want to test anything, we wanted to sell our house!

I'm not sure 2 different surveys would have £40k in the difference,given they both have the same information.I would expect possibly £5k difference,or am I being nieve?

Our mortgage provider has done a desktop valuation and come up with a number 70k under what we are paying. We are planning on going ahead at the agreed price (the mortgage is a small ltv so it's not an issue). There is hardly anything on the market in our area. It's a difficult house to value as there is nothing else like it around so we are comfortable with the agreed price.

You have not had a survey.

No, I would not spend 40K cash, with no survey, based on a valuation.

Go back to the estate agent and explain you want to have a survey done, and then will be reconsidering the price.

It was not a desk top valuation.The surveyor has done quite an in-depth report,and at the end has said in his opinion it is over valued by £40k

be really careful.....remember the huge negative equity thing of the 80's? how much of your total assets is the house price? Could you afford to lose that 40,000?. You may intend for it to be your forever hime and not care about its value but shit happens and releasing equity in your house by sale or remortgage might become necessary.

@fredafortycoats

It was not a desk top valuation.The surveyor has done quite an in-depth report,and at the end has said in his opinion it is over valued by £40k

Who was it dome by? RICs or RPSA?

If it was a RICS building survey then you probably have your answer. They are not experienced valuers but surveyors. They will find any issues and advice on costs to repair but they are not like mortgage valuers who value daily within a geographic location and know house prices in detail . They don't usually offer a valuation- you have to request it.

It was RICS

@fredafortycoats

It was RICS

It would be interesting to find out how many local houses he has valued in the last 12 months and how he came to the valuation

There is a delay on published data on sold house prices of several months and so if using those likely to be out of date. Unique houses are much harder to value than identical estate houses etc etc

We had a mortgage valuation and a full survey with valuation once and the difference was £100k on a £400k house , the mortgage valuation being higher.

It was our conveyancer who asked whether we would be renegotiating after reading the report

I think there is some confusion in this thread - OP has had a RICS Homebuyers survey, including a valuation.

This is not a mortgage drive by/desktop valuation.

It's completely down to you OP in this situation. Could you give the surveyor a ring for an off the record chat?

Personally I'd be looking for £20k off - on the understanding you are a cash buyer and anyone needing a mortgage for the property would struggle to get one.

It depends on:

• how much the property was on the market for
• how much your accepted offer was for
• whether you think it's worth it

Personally, I couldn't afford to fund that gap myself, and would also be nervous about buying a house which had been valued so much lower than I was initially willing to pay. It could be very difficult to sell on for a profit in the next 5-10 years, if that is your intention.

I'd ask the vendor to reduce the sale price to the valuation, and go from there.

In your shoes I would a second valuation, don’t suggest a price, send them in blind. If it’s same or similar valuation I would offer 20k less.

Okay.I'm going to try and speak with the surveyor about how he came to his valuation figure

Was it a RICS building survey; or a RICs home-buyer report with a valuation?

You say that you've had a Homebuyer's valuation and you also say that you're a cash buyer. You only have a Homebuyer's valuation if you're applying for a mortgage. So something's not right. Did you pay for a full structural survey,? If so, and if the survey has thrown up problems, then you can renegotiate with the buyer.

A lot of Homebuyer valuations are carried out without anyone visiting the house. Some valuers will park in the street and have a look at the front, otherwise they use Google Maps and Street View and base the valuation on recent sales in the area. They can be some way out and because they are valuing on behalf of the lender (the bank or mortgage company) they tend to be fairly conservative.

If you could afford the £40,000 last week and this is a house you really want because it suits you and you plan to live in it, then why not buy it? You might struggle to find somewhere else suitable and in the meantime prices may continue to rise.