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Original poster

Lender valuation and RICS valuation differs by £20k

43 replies

areyouhavingagiraffe · 20/06/2022 14:51

Guys, have been house hunting for several years, and pulled out of a purchase last Summer but to illegal loft conversion. Fast forward to now, offer accepted, mortgage secured, chain complete, searches submitted, and had a Level 2 survey (by a chartered surveyor) a few weeks ago. Have got the survey report, few things which need looking at but no massive issues which would make me pull out. Surveyor has been fab, talked me through things, a few structural things that can be solved, nothing significant.
Lenders valuation was 578K, my offer 582K, was pretty happy with that. Surveyor valuation is 560K, he has called me to say that he thinks I am overpaying, as he has spoken to some agents about two other properties on the same street. He is suggesting that I speak to EA/ Vendors. Guys, I don't know what to do as I am sure they will tell me to bugger off, and I am at the end of my tether. Why are the two valuations so different? I have sold during the pandemic (now chain free), living with family, so I have the spare cash and I guess could argue I sold at the peak also. I will be staying in the property for the foreseeable! Do I just suck it up. After house hunting for so long I am aware it is a SELLERS market!

OP posts:
Original poster
areyouhavingagiraffe · 20/06/2022 14:56

"due to" illegal loft conversion, not "but to"

OP posts:
DomPerignon12 · 20/06/2022 15:02

So everyone else in this scenario is fine with the price…except for your surveyor.
have you asked him ‘why’ he thinks it’s overvalued?

Houses are worth what someone’s prepared to pay. There’s no objective definition. If your bank has valued it close to what you’ve said then I’d leave it.

DomPerignon12 · 20/06/2022 15:04

Also to add if you were paying crazy money for something not worth it your bank would be the first to have an issue. After all they’ll be stuck with selling it if you default.

What exactly is it about those other properties? How are they comparable? How unique (or otherwise) is your property?

flashbac · 20/06/2022 15:09

You need more information on this bit:

"he has spoken to some agents about two other properties on the same street."

What about the 2 other properties? Are they going on the market? Or sold recently?

Original poster
areyouhavingagiraffe · 20/06/2022 15:13

Thanks - when I saw the lenders valuation I was pretty chuffed with myself as I thought I pitched it just right, ha ha. Also, after having searching for nearly two years, I think I know the market, and yeah I am buying at a peak, but I cannot sit around waiting for prices to fall.....
I also agree if I was paying crazy amounts the lender would not lend, however my LTV is around 65%, so I guess Lender is only interested in their stake, and not the cash I will be putting in.
I have asked him to send me details of the other properties, so I can see for myself how exactly the compare. I honestly am tempted to leave it and just suck it up. I feel like the vendors would tell me to get lost, and I would probably do the same in their position.

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Petronus · 20/06/2022 15:15

£20k is a fairly big difference, but what is he basing this on? Two properties on the market now? Most recent properties sold? I feel like things can change a lot very quickly at the moment, so I’d want to understand more about his thinking.

Original poster
areyouhavingagiraffe · 20/06/2022 15:22

Thanks all - yes I agree, I have asked for the details of these two houses. It is also a very long street, and mine is very close to the train station. For me anyway, that is a plus point and worth more. Anyway, I await further details of the properties.

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Original poster
areyouhavingagiraffe · 20/06/2022 15:22

@flashbac , they are SSTC.

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2bazookas · 20/06/2022 15:45

You can look up the other 2 properties yourself. Rightmove has a free online listing of all sold prices in that street (there's usually a 6 month lag between the sale, and the price notification) If they are still on the market, check the for sale price and take a virtual look round the agents webpage .

Checking the local recent sales is the first thing to do when viewing a property for sale. Not onlly does it tell you the prices; you can see how often properties change hands. If the house of your dreams has changed hands five times in the last decade , be warned....

Original poster
areyouhavingagiraffe · 20/06/2022 16:23

I have been looking at RM and Land Registry prices for the last two years. I pitched my offer based on this (RM, and LR has a lag). Not many properties on that street have come up, so I cast my net a little wider than just that street.

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Notmyyearthisyear · 20/06/2022 17:10

You can present this as a concern to the sellers and gauge their reaction, but be prepared to pay what you offered. It’s not a big discrepancy at this price bracket. I’m quite surprised your surveyor is sticking his neck in like this over 20k.
the bank only cares about the money they lend you not the full value really.

Starseeking · 20/06/2022 18:04

Hmmm, this is a tricky one.

Your lender is only under by £4k, but your survey is £22k below. I'd definitely try and get more information from the surveyor to understand the difference, however given your lender is willing to lend, meaning you can progress, there's no guarantee your vendors will reduce the price.

My initial lenders valuation came in £35k under, so I paid to get another one done. The second one came in £20k under, and I had to approach vendor as I couldn't raise enough to bridge that gap. They agreed to meet me halfway. Survey didn't have a value attached, so I didn't face that issue.

Ultimately, after all this time of searching, you should ask yourself if you are prepared to walk away if they don't reduce the price. If not, then is there much point on raising it? If you are, then absolutely do highlight it and see what they say.

SafelySoftly · 20/06/2022 18:13

We are in a similar position, been house hunting a year, pulled out of other properties. We are pushed into a corner, and have accepted a mortgage valuation of over £100k lower. We have large desposit so have the mortgage offer but it’s a bit traumatic to think how much we may be overpaying by…We are just sucking it up, it’s a long term purchase. Hopefully that makes you feel slightly better (it’s not just you!!)

Original poster
areyouhavingagiraffe · 20/06/2022 18:16

@Starseeking , interesting. My surveyor seems to think the lender valuation is pointless as they are "interested in your business", however I am hearing of properties down valued..... If it was pointless, they would always give a good valuation!

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declutteringmymind · 20/06/2022 18:17

There might be perfectly good reasons why the other ones are priced lower.

Just tell him thanks for the heads up, and carry on with the purchase.

worriedaboutmoney2022 · 20/06/2022 18:18

This happened to my friend and she just couldn't get the mortgage she had to pull out and months later the house is on the market still not reduced!

bellac11 · 20/06/2022 18:19

£20k at that price is a small percentage, less than 5%

Original poster
areyouhavingagiraffe · 20/06/2022 18:36

@worriedaboutmoney2022 I have the mortgage.
@declutteringmymind , just seen the two properties, whilst they are both extended the need work, in my opinion. Will have another look at them tomorrow, they are also slightly further from the station (8min walk as opposed to 2min walk). @bellac11 , very true.
His boss just called me offering their structural services, they have commented about a wall, very slightly bowed, easily fixed with wall ties, but may or may not be required...... I'm an engineer and I am not so sure about whether this needs further investigation. I am wondering whether these issues / down valuation are so I engage in further services

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Clymene · 20/06/2022 18:42

Your surveyors valuation is neither here nor there is it if you have the mortgage valuation? You're buying in an overheated market and surveyors aren't always attuned to current prices in my experience

Original poster
areyouhavingagiraffe · 20/06/2022 18:50

@Clymene , and I also sold in an overheated market ...

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Puppylucky · 20/06/2022 18:54

Just to flag that surveyors are not necessarily qualified to deliver valuations as it is a slightly different skill set apparently - for eg it requires more market analysis than reviewing a couple of other house prices. I know this as I have asked surveyors in the past to conduct a valuation on a house I was buying - just for my info and they have refused as they weren't qualified (their words).

flashbac · 20/06/2022 20:10

Bowed walls? Wall ties? These are not minor issues!

But about the valuation, building surveyors (as opposed to valuation ones) are naturally cautious about them. I think they were highly criticised after the last crash.

Original poster
areyouhavingagiraffe · 20/06/2022 20:21

@flashbac , these are common issues on a property of this age.

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Original poster
areyouhavingagiraffe · 20/06/2022 20:22

I didn't say these were minor. Said they can be fixed, if required.

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FAQs · 20/06/2022 20:31

His boss called and they are up selling services 🧐 have they provided the other house details yet?