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Homebuyer Valuation Vs Purchase Price

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Hiya guys, new to here. Just wanted some opinions from you guys.

I'm a FTB and had offer accepted from vendor. House was listed at 245k, as we are FTB and can move pretty quickly managed to do a deal at 225k.

Was quite happy with the 20k saving. However just had out Homebuyers report back....was quite interested to see what the valuation was......

Reports states current value is 225k.

How is this possible!

Has the surveyor just put down 225k as thats the proposed sale price?

Why did the estate agents price it as 245k!!

Really confused as we feel we have lost our £20k saving and are now paying the going rate....but we have gained no advantage of being FTBs with no chain etc....

Appreciate all comments.

Many thanks for reading.

Cheers

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Hiya guys, new to here. Just wanted some opinions from you guys.

I'm a FTB and had offer accepted from vendor. House was listed at 245k, as we are FTB and can move pretty quickly managed to do a deal at 225k.

Was quite happy with the 20k saving. However just had out Homebuyers report back....was quite interested to see what the valuation was......

Reports states current value is 225k.

How is this possible!

Has the surveyor just put down 225k as thats the proposed sale price?

Why did the estate agents price it as 245k!!

Really confused as we feel we have lost our £20k saving and are now paying the going rate....but we have gained no advantage of being FTBs with no chain etc....

Appreciate all comments.

Many thanks for reading.

Cheers

1. Please don't shoot the messenger...

Hometrack (who release monthly property price data in the form of initial asking price) reckoned that the average discount from the initial asking price was ~7% (November time) and you got an 8% discount (based on only properties that actually sold).

Another methodology which also includes unsold properties is known as the delusion index and measures the difference between asking and selling prices (Rightmove Asking price) divided by (your choice of Halifax HPI or Nationwide HPI or Land Registry) which is ~39% at the moment. Though this includes the asking prices of many properties that never sell because they are over priced.

EAs therefore mark up the price to allow for negotiating room downwards (and also to win the business by suggesting the highest valuation to the seller, which eventually leads to big reductions in asking price from the sellers when they get very little interest in the property and no offers).

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How can someone with no idea of how the market works get in the position of having 10 times the median wage, that's 225 thousand english pounds to spend on something?

I have a car, 6 years old, poor condition but excellent runner, yours for £10,000 (although if you make a cheeky offer of £9,000 I'll probably accept it).

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The surveyor is working for the bank. His job is to protect the bank and provide enough information to let them manage their risk. Having bought and sold a few places I'll say that sometimes the bank valuation can be below the purchase price (in which case buyers use this as a tool to renegotiate the sale price) or at the purchase price. I haven't seen a bank suveyor value at above the sale price.

The asking price is irrelevant. The 245k figure may have been suggested by the estate agent or the vendor (each time I've listed a place for sale I've used my choice of asking price, on the basis that I trust my research more than the agents) and is simply the highest price the believe they stand a chance of getting without scaring off people before they've viewed. Remember that the estate agent is working for the buyer - his job is not to come up with a 'fair' price, or a 'correct price' but get the best he can.

The house was never 'worth' 245k. Asking prices are castles in the clouds. On the day of exchange the house is worth 225k because that's (presumably) the highest something was willing, and able, to pay.

When you come to sell it may be worth more or less, depending what someone will pay at that point.

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Many thanks for the informative responses guys appreciate it.

In response to the two haters.....how did i get in this position.....by working damn hard.

I may have no idea how the market works hence the reason for posting a question.

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There are many "haters" on this site who will try their best to belittle people (especially new posters).

It is the case that a mortgage valuer will never value a property above the offer price. A property is only worth what someone is willing to pay for it and if you have looked at your own personal finances, affordability, believe the deal is good and like the place then why not go for it? The rightmove website price comparison report is always a useful tool to use to see if your offer is good value or not.

Please ignore the Kn*bheads and best of luck.

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Many thanks for the informative responses guys appreciate it.

In response to the two haters.....how did i get in this position.....by working damn hard.

I may have no idea how the market works hence the reason for posting a question.

The time for asking questions about something you have no idea about is usually best done some time before offering someone £200,000 for their pile of bricks.

Maybe it's just me.

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The time for asking questions about something you have no idea about is usually best done some time before offering someone £200,000 for their pile of bricks.

Maybe it's just me.

He's not exchanged contracts by the sound of it, but potentially has got the seller to take it off the market - seems to be safe ground to me?

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There are many "haters" on this site who will try their best to belittle people (especially new posters).

Forums bring out the worst in people, but this site is particularly bad because most people find it as a result of feeling frustrated and fed up with the housing market (include myself in that). Everyone feeling frustrated/cheated/angry etc isn't the best starting point for jolly group-hugs...

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Forums bring out the worst in people, but this site is particularly bad because most people find it as a result of feeling frustrated and fed up with the housing market (include myself in that). Everyone feeling frustrated/cheated/angry etc isn't the best starting point for jolly group-hugs...

The OP is classic "Where's my free lunch?" and Christ knows how much of that makes up the entire forum. It's a lot.

But such glaring naivety? Unforgivable. Having had a survey of sorts I bet the OP is in the hole for a few hundred quid now and wouldn't back out even if the real surveyor said the roof was going to cave in.

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The OP is classic "Where's my free lunch?" and Christ knows how much of that makes up the entire forum. It's a lot.

But such glaring naivety? Unforgivable. Having had a survey of sorts I bet the OP is in the hole for a few hundred quid now and wouldn't back out even if the real surveyor said the roof was going to cave in.

It's inexperience that has led to the original question - I don't think there's any need to be lambasted for that. As the OP stated, it was the reason for the post.

Agree with Manchester's point concerning this forum being filled with peed off people but I don't see the point of constant vitriol.

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When I bought a house a few years back, my surveyors valuation came in at exactly what I had offered. It was pretty clear that he had taken my offer, then decided the house was worth that amount. As a valuation it was worthless.

A lot of people think that because they are asking a particular price, that must be near the genuine worth of it - nothing could be further from the truth. Many EAs and vendors will say "we'll put it on at 100k in the hope that we get offers near 80k".

If you like the house then buy it. Only time will tell if it's a good investment. Well, time and reading HPC of course :rolleyes:

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Think about it from the valuer's point of view. He's working for the bank. He wants to keep the bank happy. It's a falling market. What would you do?

If you value too high, the bank doesn't get its money back when it repossesses. The bank blames you.

If you value too low, the bank is much more likely to get its money back, but you won't get a mortgage for the full amount and he won't be approving enough mortgages to compete with his colleagues. So he puts in the lowest value he can, which still allows the mortgage and sale to go through.

If you'd offered £180, he would have said £180. Then he's only declaring the bank will get back £180, easy promise to make if he thinks it's actually worth about 200.

As for asking prices, if EA's find buyers are offering 10% less than asking prices, they just put all their prices up 10%.

You must be in love to buy a house at this time, by the way, but I expect you know that.

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If you like the house then buy it. Only time will tell if it's a good investment. Well, time and reading HPC of course :rolleyes:

If (long term) you enjoy living there and aren't financially crippled then it's a good investment.

Not necessarily the best: that's much harder to gauge. Depends where you set your sites. And bear in mind that a rented place you enjoy living and can afford is also a good investment, so long as house prices aren't playing 2003-style sillybuggers.

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