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 😳

They are not experienced valuers but surveyors

Utter rubbish. Many RICS surveyors are experienced in valuations. There are many different types of RICS surveyors and those who provide home valuation reports will likely be more accurate than someone sitting at a desk in a bank offices basement.

I literally said in my first post there's no harm in asking and you said people like me were 'crazy' because I explained why in some situations it's not always going to work.

No I said it was crazy to think that just because you initially offer X you have to stick with that figure.

I'm always of the view that if you offered over asking, against other bidders, and bid high to be able to secure the house then you don't really have much of a leg to stand on if it's undervalued.

This is the bit I called crazy because I think it is crazy to think that you don't have a leg to stand on if it's undervalued. Like I said you can disagree!

@countrytown

It would have to have been a very serious issue for me to have reduced (a specific problem on the survey that neither of us were aware of and that wasn't already reflected in the price) and if that's the case for the OP then that feels a bit different to just reducing an offer because a surveyor has valued it down. As a few people have said above, surveyors nearly always downvalue and that's mainly to protect themselves.

Yes surveyors are conservative but this is 40k on a 315k property, that is significant. I'm just saying to not stop & question that as opposed to proceeding is crazy. You can disagree.

I agree: it's probably worth letting the vendor know that the valuation has come up £40k short and asking for them to consider a reduction, but as the market still seems to be buoyant you can't expect them to roll over.

A surveyor or valuer won't necessarily pay a lot of attention to aspects of a property that might be really important to a buyer, such as decor or orientation or outlook. I've learned from experience that I want a SW-facing garden so that we can sit outside in the sunshine in the evenings and enjoy the sunsets. I expect to pay more for a SW garden, even if other people don't see the value in it.

@Shedbuilder exactly you have to ask & not just accept it for fear of souring the relationship. The OP needs to do what's best for her.

We didn't bid over the asking price,we are£5k under.
Had a long chat with the survey and he thinks it would be reasonable to meet in between at £300k comparative to other house sales and prices.
We have booked another viewing to ensure we are still happy with the house and will see how we feel after that.

I'm aware that the £300k would still be £25k over what the surveyor originally said but I don't want to botch the sale

I suspect the stamp duty holiday idiocy and the price rises it generated have stampeded a lot of people into offering more than lenders/surveyors think houses will be worth in the medium term.
In the end, as a cash buyer, you have to ask yourself, what's worth more to you, the money, or the house? If it's a forever house and unique in respects that matter, I might choose to do it. But if it's a fairly 'normal' house, or I might want to sell it in the next five years or so, I'd look carefully at actual sold prices recently and current asking prices. If a lender/surveyor doesn't think it's worth the money, you are backing your judgement against theirs, which is risky.

@Shedbuilder

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.

"You only have a Homebuyer's valuation if you're applying for a mortgage." Not so. You can have any type of survey/valuation you are willing to pay for if you arrange it directly with a surveyor.

@BoredZelda

They are not experienced valuers but surveyors

Utter rubbish. Many RICS surveyors are experienced in valuations. There are many different types of RICS surveyors and those who provide home valuation reports will likely be more accurate than someone sitting at a desk in a bank offices basement.

Fully agree, BoredZelda. We had the 'full structural' type, and our surveyor gave us details on the area the house was in as well as it's age and type of construction. A valuation was an optional extra on that level of survey, IIRC we had one and it was about what we'd offered. But we're experienced at looking at property for faults.

We recently had a big issue with a down valuation…purchase price was £550k and valuation came back at £435!!!!! No point trying to renegotiate as the house would sell in an instant to a cash buyer so we had no negotiating power. We switched lender and the second valuation came back spot on at 550k. Everyone was completely baffled by the whole thing!

I really appreciate everyone's differing opinions.I will keep you informed on any updates.I've not bought a house for over 20 years so it's all raw to me again.

There's litte point getting a survey done if you don't use the information and opinion provided within.
Is the reduced value purely down to market volatility or due to the general condtion of the property?
Personally I would return to the table and start to negotiate. If you are keen to show willingness then split the difference and go back 20k under. If you are more determined and are prepared to move onto another house purchase then drop down the full 40k.
It's a fairly buoyant market and recent gains are unrealistic for the long term.
You need to weigh up if you think you might end up in negative equity. If so does this affect you in the short to medium term? i.e. Are you likely to move? How secure are your jobs? etc. If you can ride out price fluctuations then your decision is easier.
I always go into negotiations with the approach that i'd rather money was in my pocket not theirs.
Good luck with your decision.

The Op has had a survey, that’s what a homebuyers report is!
It’s the mid range survey, perfectly adequate, they flag things up on here that they find on a more expensive survey
I don’t understand posters who say either OP hasn’t had a survey, or why did she have a homebuyers?
It’s because she’s buying a home, the clue is in the name, nothing to do with having a mortgage.
In our case, we went to best and final recently and the valuation, said the house is worth exactly what we are paying for it, despite it being £55k over the asking price. And we’re getting a mortgage.
I was also worried about it being down-valued, but for us, that didn’t happen
It’s a similar price to the house you’re looking to buy OP. It was on rightmove for offers over £325k, we ended up offering £380k, after our initial offer wasn’t accepted at £335k, they had several offers and it went to best and final.

I've had this happen lots of times both ways. The work that is listed quite often is not necessary - certainly not straight away. They simply take what you've agreed to pay and deduct the cost of the work. It's not really a proper evaluation of the house price. I also agree that some surveyors list more things than others. It depends on what is needed. If it's re roofing or underpinning then I would negotiate a reduction. If I was the owner it again would depend on what had been found but it's unlikely I would sell at 40k less

Houses are going far above valuations here

Is it a survey valuation or a home buyers report in Scotland!?

If you like the house you might just have to accept paying more or try to renegotiation but it's a sellers market

We're the vendors in this position. We were happy to meet in the middle as the OP is incluned to do. Our buyers are now trying to gazunder just prior to exchange so we have held firm and said no further reductions. The market is very buoyant where we are and nothing else like ours on the market. It has absolutely soured relations.

I think the OPs approach is very fair though.

I had this with the first property I tried to buy, the valuation came in under but the vendor wouldn't take a reduction. I questioned the valuation, and asked for a second opinion (it was a valuation arranged by the mortgage provider). It turned out the surveyor was covering from a different area, but they wouldn't redo it and in the end I had to pull out of the sale.
The house sold very soon after for over the asking price, and was sold on about 5 years later at a considerable profit, with minimal work having been done to it - it still annoys me now when I think about it!!

Ouch. We pulled out after a £20k survey devaluation. We offered to meet in the middle but the seller didn't want to and we walked away. It was the height of the housing boom and in London so a real shocker. The place sold a year later for £20k under our offer but is now worth roughly £140k more due to development of the area but it was too big a risk for us at the time and we ended up somewhere better suited so it's more about what's right for you at the moment. If you can agree the £300k and it's a long term home then probably worth it but not if you plan to resell soonish.

Update if anyone is still interested.
Been back to view again this evening and still really like it,so EA has contacted the vendor to renegotiate and they have agreed to the £300k🎉🎉I know it's still over but don't want to loose out on it,it's been a stressful few days.

Really pleased for you OP, good luck for your move.

I really agree with @hannahcolobus about people trying to down value of they've bidded over. Never thought of it before.
The estate agent has valued at x.
The property is marketed at x
The buyer has gone into a bidding warband offered x + £50,000
Then acts surprised that the mortgage valuer has agreed with the x valuation?
In that situation, I also wouldn't renegotiate and would go out to the next bidder instead

Not your situation, I know OP and I'm glad you agreed a price!