Active discussions

Meet the Other Phone. Flexible and made to last.

Meet the Other Phone.
Flexible and made to last.

Buy now

Please or to access all these features

Talk
Property/DIY

Join our Property forum for renovation, DIY, and house selling advice.

Original poster

Surveyor says house we buying £50k overpriced

29 replies

kerala · 26/06/2008 11:35

Do we walk away?

This is the second house we have got to the survey stage of incurring lots of costs etc and can't believe its going wrong again. Sold our place in London for a good price (agreed price in Jan phew) now squatting with my parents whilst trying to find somewhere to buy in the South West.

Its a lovely Edwardian family house but needs abit of work. I just cant stomach overpaying by that much but DH and MIL think we should press on. Expecting second dd in November. Aargh.

OP posts:
Oliveoil · 26/06/2008 11:36

iirc surveyors are undervaluing atm

you need Tutter, I think she is buying a house atm and her survey came in way under value

iirc her dh spoke to the surveyor and he says they are v cautious atm

franke · 26/06/2008 11:39

Don't think you should walk away before attempting to renegotiate. How long has it been on the market? How desperate are they to sell? Are there any specifics in the survey which you didn't know about when you put in your original offer (eg needs new roof, damp etc.)?

missingtheaction · 26/06/2008 11:39

overpriced in what way? what have you offered and what has he valued it at? if you are prepared to pay £50k more then that's what it's worth.

Does his valuation impact on your mortgage offer? if not then I would press vendors for a reduction (tell them value from survey, offer them £40k less and see if they bite) What's the worst that can happen? if vendors refuse to reduce you can walk away or pay full whack.

surveyors very cautious at the moment because of credit crunch etc.

WideWebWitch · 26/06/2008 11:45

If you're thinking about walking away you might as well ask for £50k off. Even if you get £25k it'll help. Can you proceed even though it's been downvalued? Or do you need him to agree the value for a mortgage?

TillyScoutsmum · 26/06/2008 11:47

I'm a surveyor (don't shoot me) and would agree that there's lots of undervaluing going on at the moment. As others have said, if it doesn't affect your mortgage, then there's no reason why you can't go ahead. Worth trying to get some knocked off the price first though

clam · 26/06/2008 11:58

Surely if the surveyor has valued it 50K under, then the vendor's price was too high. So why would you pay it at this stage? I think it puts you in an even stronger position than you already are, as a chain-free buyer. Think you'd be nuts to pay agreed price in this climate.

OneLieIn · 26/06/2008 12:03

Clam, our surveyor priced our house at 40K less than the asking. We had a really frank conversation with the estate agent asking them to provide evidence of why it was worth x instead of x - 40K. We also told the estate agent that in a sliding market, we were not prepared to buy a house where the surveyor put the price so much lower than the asking.

It was a bit of wrangling, but we got the 40K off. The whole 40K.

Negotiate, it is a buyer's market. Just think what you can do with 50K.

noddyholder · 26/06/2008 13:41

negotiate down or leave it.

funnypeculiar · 26/06/2008 13:44

If you can, I'd also talk direct to your surveyor - ime, they are (not surprisingly) prepared to be a lot more opinionated and straightforward in an 'off the record' dialogue. Our last one told us (on the phone) he thought we were getting a really good deal - can't imagine that going into the survey report

dinny · 26/06/2008 13:47

it's not UNDERvaluing, the market is vastly over-inflated and it is a falling market.

ask for price reduction, they'll accept it if they have half a brain as it'll be worth 30% less than now next year at least

Tutterotsky · 26/06/2008 13:54

ah yes here i am

olive is right - our valuation came in at 12% under the purchase price

we nearly walked away

but it appears that surveyors are coming under a lot of pressure from lenders

in the past they would "allow" for 10% and still agree with a purchase price - so if you had offered £500k but his valuation priced it at £460k, he'd still put down £500k on the report

that margin of error has gone now, and some surveyor are even deducting 10%

allegedly

in the end, for us, it was immaterial. we decided this was a house for life, we could afford it, and therefore it didn't actually matter if we have overpaid slightly

hth - good luck

noddyholder · 26/06/2008 14:04

The surveyors are only acting on orders from RICS and the banks etc they are pricing in the falls they expect to cover themselves.Why lend 200k on a house that will be worth 150 next year

noddyholder · 26/06/2008 14:05

agree with dinny 100% btw it isn't undervaluing or down valuing it is valuing in the current market and discounting the asking price which is a magical figure pulled from the sky by the seller and greedy agents

Tutterotsky · 26/06/2008 14:09

not what the surveyor told us noddy

if the buyer were borrowing a large proportion of the purchase price then i would urge caution. but then again, in that case, the decision would be taken out of their hands, as the lender would be unlikely to sanction the loan

noddyholder · 26/06/2008 14:14

I think i am saying the same as you tutter actually.They aer being leaned on by lenders etc as they can't lend too much on a falling asset.I agree if you can afford it and it is a house for life then its your choice but knowing whats coming why pay more have to esp with rises in fuel and food It is a ercipe for disaster if for any reason you have to sell sooner than you envisaged

dinny · 26/06/2008 14:22

people not in the business haven't worked it out yet, I don't think

it is a terrifying prospect, what is happening

WideWebWitch · 26/06/2008 14:33

Is the £50k more or less than 30%? Because that's what the IMF reckon the market#s overvalued by.

noddyholder · 26/06/2008 16:06

The reality of what is happening dinny is so much bigger than people thinking their house is 'worth' x amount more than they paid for it because it has a swish kitchen or a conservatory added on!The falls will have to be significant for the banks to be able to lend again at all so even a house down from 350 to 300 is not a bargain if you can't get finance.The trasury have lost 5 billion this year in stamp duty and they aer not going to be able to withstand that for long so I think they will be prepared to sacrifice the housing market and even facillitate a crash in order to get banks lending and houses selling again.

1dilemma · 27/06/2008 00:14

I agree with nearly all of you except I've heard 30-50%.

No one wants to buy in a falling market and everyone drops their price by as much as they can get away with

so it keeps on falling
added to that the banks don't want to lend money (does anyone remember was it like that last time? the banks not wanting to lend I mean?)

dinny · 27/06/2008 14:23

yeah, Noddy, we are wondering if we will even be able to buy next year when we move, think market will still be falling then...

fishnet · 27/06/2008 16:04

DHs in the know colleagues have said 18 months before things start to stabilise. They have said as a rough guide prices will fall to where they were six years ago.

noddyholder · 27/06/2008 16:20

fishnet that is about what i've heard.My friends in finance have said if you pay more than 2003 prices you will defintely be -ve by 2010

fishnet · 27/06/2008 17:25

If we applied the six years ago calculation to our house (which we sold at the beginning of this year) then that would mean just over 27 per cent drop.

The market is crashing and there is no denying it even from those who are trying to bury their heads in the sand. If you bought more recently than six years ago you may well find that for a while your house is worth less than you paid for it. If you mortgaged yourself to the max you may well find that you go into negative equity. BUT this is only a problem for those who need to sell. There will always of course be those who need to move, elderly sellers needing to downsize (although often these sellers paid tuppence for their £500k houses anyway), couples splitting up, those who have to relocate - but the vast majority of people don't HAVE to move.

Original poster
kerala · 27/06/2008 18:31

Still up in the air. Agent feigning shock that our surveyor came in with such a value (hmmm). Buyers elderly and abit batty and will not budge from their high price. They are in no particular hurry to sell.

We on the other hand are living with my parents, DH starts new job in new city in 2 weeks and we have toddler and another due in the autumn. Dont know whether to suck up the high price or give up and rent. Nervous about stretching ourselves to the max (which this house would be) when a qualified surveyor has told us we are paying too much.

OP posts:
theyoungvisiter · 27/06/2008 18:39

every place we've ever bought has been undervalued by the surveyor. Each time we knew what the local market was worth and took our own view - got a bit knocked off but knew that it was pointless to try to negotiate down beyond a realistic value.

It's important to remember that the surveyor is not valuing what the house would probably fetch on the open market, but what the bank could definitely get in the event that they repossessed.

Having said that, it is a falling market and you are in a strong position to negotiate.

Equally though, if you like the house and can afford to sit on an investment for a while then you pay what you think the house is worth to you, not what it's worth to the bank. As long as you are unlikely to have to sell in a hurry, a house you love at a slightly inflated price is always a better buy than a house you hate which is a bargain. Like buying clothes!