Red book valuation for cash buyers?

[trickyex]

I have just had an offer accepted on a house in a desirable area.

I was asked to offer the top end of the guide price to secure it and prevent any future viewings. Houses don't come up very often in this area and it's in really good condition inside and out.

Having sold the family home (a currently renting) I am in a good position as a cash buyer, with no mortgage to arrange (which is uncharted waters for me). It is the first house I will have bought on my own, post divorce.

I took a trusted builder with me to view the house and so won't be getting a survey, I feel comfortable with that. But is it worth getting a red book valuation to check the sale price is fair?

I have found a surveyor who will do this for under £300.

The sellers seem to be hard negotiators so I am not sure is this is much scope to renegotiate the price but would be grateful for thoughts/experiences.

No. If you are happy with what you offered then buy it. Is irrelevant what the £300 come back with.

Definitely worth getting a valuation. You need the information on value for peace of mind. Particularly as values seem to be reducing in most areas. At least with that info you at least know if your overpaying - or could use the valuation to renegotiate if it was significant. If a value comes in lower than expected you have choices and if not you have peace of mind. A small amount of money well spent either way.

Thanks both. Interesting to read such different replies.
Am erring towards getting one, but I sense the sellers won't renegotiate much if at all even if its a lower figure. In which case it feels a bit pointless.

I am familiar with the property prices locally and I do think I have probably agreed a little more than its worth, partly to secure it before viewings started - houses often go above asking in that area as they don't often come up.

There isn't much of a safety net for cash buyers, which is quite stressful.

I would recommend having a "House Buyers Report" done by a qualified surveyor. As well as providing a valuation that will also indicate any potential issues with the house.

Just to add another view point, if the trusted builder thought it was structurally sound and the sellers are unlikely to negotiate then it seems a bit pointless and a waste of money. A red book survey will likely devalue it anyway as 'proper' chartered surveyors really just value the land, bricks and mortar and don't adjust for the desirability factor. Be prepared that the sellers might want to go back to the market when you ask for access to conduct a valuation after having an offer accepted. You'd be better saying you are doing a survey and not a valuation.

We all want a bargain, you could wait for the next house to come up?

You took a builder around, it's in a desirable area, for all the 'terrible market atm' talk I've seen good properties go onto RM and sell very quickly. I don't think there's a shortage of money I think there's a shortage of 'affordable' property. I want a Porsche but can only afford a Toyota, are the Porsche's over-valued?

But if you think they'll negotiate, go for it, but if I were the seller then I'd be thinking about putting the house back on the market.

Good luck. :)

For the second time in 15 mins I agree with @DrySherry.
DC ‘s recent house purchased devalued in the 20 weeks it took to deliver the conveyance and the Building Society would only provide to a certain point. While you are not needing a mortgage, you should still do it for peace of mind. If you find the house is worth £20k less, it’s very likely another purchaser -if it’s not you - may not be able to get the full
amount they desire either, so the seller might back down.

Why P** off the seller?

You have offered high and know it. You did this for good reason and understanding why. You took the builder with you for that extra pair of eyes and knowledge you may not have.

They have accepted and agreed to take it off the market.

If you are now changing the terms of your offer (which was high offer, off market, cash buyer, no survey, renting, quick and easy sale) - then expect them to re advertise or not be as easy to deal with you through the process. Good buyers are as important as good sellers.

I think the fact that houses don’t come up very often is key. If something is rarer then it will often go for more money. If you felt that you were paying a few thousand more then I am not sure I would get this valuation but I guess it will be worth it. It’s a difficult one.

I agree with this.

You have good reasons for having offered the price you have.

Yes, its quite unlikely that another cash buyer like yourself is waiting in the wings - so its important to at least know what a bank would lend on it. If it is overvalued and you decide to overpay without a further negotiation thats your perogative. But as another poster points out, the chances are that the seller will move on price, because if they dont, they will likley need to take less anyway - from someone who needs a mortgage.

It's in good condition
It's in a desirable area
you secured it early

If you come back with a reduced offer the sellers are going to put it on the open market and write you off as a waste of time.

Thanks for the replies.
Part of the reason I am cautious is that the agent and sellers have not been very honest with me.
I don't want to give too many details here in case it is outing, but I was misled by the agent wrt the guide price (to the tune of 50K). Its hard to explain here without giving too much detail.
I also had my offer accepted and the memorandum of sale wasn't issued for some time after this (nearly two weeks) while the sellers negotiated on their purchase, which is now agreed. Not great.
So the sellers don't seem to be worried about messing me around.
it also makes me wonder if it would be sensible to have a level 2 survey, for peace of mind. It feels hard to trust the process and those involved given the above.

Protect yourself OP, at least by knowing what the real value is. With regard to a level 2 survey though - I doubt they will be anymore informative than your trusted builder's visit. They don't do a lot on a level 2. Personally I would always want a level 3. Unless the house was very new and still under a builders warranty. But Im just cautious in general.

Always have the best level of survey you can afford.
If you consider the coat of the survey against the cost of the property it is a tiny fraction.
What if the survey spotted something like 'new roof timbers needed' or damp?
Agree - call it a survey, consider it a valuation, but keep an eye on not being messed about. It doesn't feel like it, but as a cash buyer in rented, you really do have the upper hand here for all possible properties.
What is meant for you will come for you. Good luck. Head over heart here.

It’s a scary position to be in doing all of this on your own @trickyex I have been there post divorce. There are still a lot of beliefs around a house being an investment that you can eventually cash in. We maybe need to get back to the idea that we are just looking to buy a home to enjoy our lives in? All that really matters is that you are happy with your offer. If you really love the house and the area, be brave and put your future happiness and contentment ahead of a valuation. I have bought and sold many times and I have never heard of a red book valuation. With regard to surveys even the extensive ones are not certain to find any issues. Taking the builder with you was a good idea. I hope things progress smoothly for you.

Well that makes things somewhat different. Yes I'd get a survey, but get a level 3 as the builder has sort of done a level 2. I'd re-offer if 'things' showed up. How much you really want the house will probably dictate how much control over the buying process you feel you have.

This literally isn’t true, from a ‘proper’ surveyor.

A residential red book valuation will be based on comparable valuation in the local area, factoring for condition, location etc…

A red book valuation isn’t a reinstatement valuation or depreciated replacement cost valuation.

OP you said:
I also had my offer accepted and the memorandum of sale wasn't issued for some time after this (nearly two weeks) while the sellers negotiated on their purchase, which is now agreed. Not great.
So the sellers don't seem to be worried about messing me around.

Personally , I would now see this as a positive. By their actions they are all tied up with their sale and obviously committed and smitten with their next home.
They are focussed on themselves clearly and taking you for granted.
Now they have shown their hand about how much they want their onward purchase and been complacent, you are in a much more powerful position.

You are 'ending their chain neatly' by being a cash purchase.
Well, I would be insistent on a level 2 survey with valuation

Unless it's quite a unique property, you should be able to get a good read on market value using houseprices.io (for the postcode and street) and area360 area profile (to see whether the trend in prices is up or down).

Thanks again for the further posts.
Having done some detailed research on those websites, thank you @XVGN, I was right to question the sale price.
Still undecided on next steps, seems a level 2 survey round here is around £800-900.

I’ve just accepted an offer on our house. They are cash buyers, don’t want surveys and want to move quickly. We have instructed a solicitor, removed it from the market (cancelled viewings). If they turned runs and suddenly wanted surveys and to renegotiate I’d seriously think about just putting it back on the market. Especially if it’s in an area where things rarely come up for sale and are popular.

@Houseyhope good luck with your sale.
Not quite the same situation, given I have been kept waiting 2 weeks to have confirmation the transaction is going ahead.
Being a cash buyer doesn't mean forfeiting the right to a survey, though the onus is on the buyer not the mortgage company to arrange a valuation if wanted. My offer was not made on the basis of a fast sale/no survey.

A level 2 or 3 survery informs you of the condition. This is different from a valuation survey and is absolutely essential in my opinion.

I had one of those surveys and it was a complete waste of money. Many expensive problems were missed. Next time I will be taking a trusted builder round instead.