Survey Valuation Less Than My Offer-help!

[huw]

Personally I'd keep looking. If you can come to a deal on this house, fine. If not, the fact that you've been looking will put you ahead ... and you might even find something better/cheaper.

[pie-eater]

I'd pull out or offer under the valuation.

Don't be shy around EAs or they will have the shirt off your back. My gues is that the EA is very emabarrassed by the massive difference in his 'valuation' and the house's true market value.

You'll make him/her look an idiot if they have to pass on this info to the vendor, and weaken the relationship they have with them.

There's nothing to stop you personally knocking on the door of the house and speaking direct with the vendor. Maybe you could show them the bits of the survey you want that will prove the valuation compared to the parasite's valution.

****** the EA. They are merely agents who just want to profit from a high sale price.

Edited June 2, 2009 by pie-eater

[Number79]

I'd pull out or offer under the valuation.

Don't be shy around EAs or they will have the shirt off your back. My gues is that the EA is very emabarrassed by the massive difference in his 'valuation' and the house's true market value.

You'll make him/her look an idiot if they have to pass on this info to the vendor, and weaken the relationship they have with them.

There's nothing to stop you personally knocking on the door of the house and speaking direct with the vendor. Maybe you could show them the bits of the survey you want that will prove the valuation compared to the parasite's valution.

I was trying to work out the ea's angle for the aukward behaviour and there it is.

Nail on the head, caught out with massive overvaluation.

[deeplyblue]

I'd pull out or offer under the valuation.

Don't be shy around EAs or they will have the shirt off your back. My gues is that the EA is very emabarrassed by the massive difference in his 'valuation' and the house's true market value.

You'll make him/her look an idiot if they have to pass on this info to the vendor, and weaken the relationship they have with them.

There's nothing to stop you personally knocking on the door of the house and speaking direct with the vendor. Maybe you could show them the bits of the survey you want that will prove the valuation compared to the parasite's valution.

I disagree with this last bit - don't get into personal confrontation with the vendor. Do everything by letter, and keep copies. It saves hassle, and you will have proof afterwards of what was said. If things get sticky, use recorded delivery, so that you can prove the letter got to them.

I'd steer clear of any further conversations - even on the phone - with vendor or EA until this has been settled.

db

[Bloo Loo]

Spot on

The market value for this property was £435k because that was the figure offered by the person who sets the actual price the purchaser. The fact some surveyor sets the price lower for his valuation estimation purposes is totally irrelevant. The purchaser is somehow trying to guzunder the price by using a surveyors estimation as a guide, which is just silly. House prices are set by how much people are willing to pay for them, surveyors only try to give a guide to trends, and tend to be slightly conservative out of self interest.

Why does the OP describe himself as a bear?

shame, the surveyor will determine the amount of lending the purchaser can achieve.

maybe he cant afford it at the price offered after all.

simples.

[pie-eater]

I disagree with this last bit - don't get into personal confrontation with the vendor. Do everything by letter, and keep copies. It saves hassle, and you will have proof afterwards of what was said. If things get sticky, use recorded delivery, so that you can prove the letter got to them.

I'd steer clear of any further conversations - even on the phone - with vendor or EA until this has been settled.

db

It worked for me in the past.

I got the house at what I wanted minus half the EA's commission costs.

It all depends on the people, I guess.

[bb7t6]

Call me Mr Cynical but I smell a rat with this story.

Firstly, I can't believe that someone who's acheived the finances required to bid 400K for a house has had to come onto an internet forum to ask how to negotiate.

Secondly , the EA's response doesn't make sense. If you said you weren't prepared to pay the original offer and were pulling out, they'd have to pass this info on to the vendor. This has nothing to do with their legal obligation to pass offers on, but just the fact that they couldn't just carry on with the sale pretending that everything was fine and dandy, when you had pulled out!

Edited June 2, 2009 by bb7t6

[Emy74]

Call me Mr Cynical but I smell a rat with this story.

Firstly, I can't believe that someone who's acheived the finances required to bid 400K for a house has had to come onto an internet forum to ask how to negotiate.

Secondly , the EA's response doesn't make sense. If you said you weren't prepared to pay the original offer and were pulling out, they'd have to pass this info on to the vendor. This has nothing to do with their legal obligation to pass offers on, but just the fact that they couldn't just carry on with the sale pretending that everything was fine and dandy, when you had pulled out!

I agree. The OP calls himself a bear but offers 50K over what the house seems to be worth in todays market. He clearly as a bear believes prices will fall and therefore surely if he is going to buy he should only be offering £330-350K max. Why is he still trying to buy th property in this falling market he is clearly not getting a bargin at even £385K?

[abharrisson]

That is the last thing I would do.

Well there we go, must be a man who likes to work hard... by letting the agent talk to the valuer, you challenge the agent up front to justify his price and convince the valuer... if he cannot... which by the by most cannot then he has a choice , either drop the price or risk losing the buyer.... agents and valuers when put together by chance on these things will not collude and its a much stronger baraining chip to say... you couldn't get the valuer to change their opinion rahter I couldn't get the valuer to change their opinion.

[abharrisson]

matters not whether the surveyor is fair or not, the LOAN is based on the surveyors valuation.

No LOAN no OFFER.

simples.

the rest of the advice is fine, the house has been valued, its lower than when the offer was made, so the buyer, either find the extra cash and have an instant loss, or deal with the new circumstances.

and just tell the agent in no uncertain terms he's pissed you off. should clear the air a bit.....he needs the sale as much, if not more, than either you or the vendor most likely.

Of course no one on here seems to recognise the valuer might very well be wrong anyway.... the market in simple terms IS the buyer.. the buyer has offerred his price... who is the valuer to say thats not reflective of the market... after all in this market he probably has no eveidence otherwise... like many valuers he may well just be being overly cautious .

[Bloo Loo]

They are not all scheisters..... I do not do residential surveys, and although i cacept that the surveyrs are a little vague a majority of the resi surveyors I have met with, whome I have no personal relationship may I add, have been pretty decent and honest people. They are definately not from the same cloth as EA's and sharky finacial advisors.

An anecdote for you, I was talking to one recently who said that he had to survey a property tht was due to go to Auction, he said that the it was riddled with severe problems. On the day in question, it was an open day on the property, a majority of the people there were seriously looking with a view to bidding on it blind. He advised some of them that although he could not give the details, they should definately get some advice before bidding. He was conceerned that somebody would end up with a pile of trouble without a clue.

sounds like MPs, they ended up with a pile of trouble assuming that no problems would be forthcoming.

this whole "it wont happen to me" attitude is very strange.

Bring back an awareness of risk I say.

[Bloo Loo]

Of course no one on here seems to recognise the valuer might very well be wrong anyway.... the market in simple terms IS the buyer.. the buyer has offerred his price... who is the valuer to say thats not reflective of the market... after all in this market he probably has no eveidence otherwise... like many valuers he may well just be being overly cautious .

sure, he could be wrong, but the mortgage aint coming.

[Flat Bear]

I agree. The OP calls himself a bear but offers 50K over what the house seems to be worth in todays market. He clearly as a bear believes prices will fall and therefore surely if he is going to buy he should only be offering £330-350K max. Why is he still trying to buy th property in this falling market he is clearly not getting a bargin at even £385K?

Spot on

The market value for this property was £435k because that was the figure offered by the person who sets the actual price the purchaser. The fact some surveyor sets the price lower for his valuation estimation purposes is totally irrelevant. The purchaser is somehow trying to guzunder the price by using a surveyors estimation as a guide, which is just silly. House prices are set by how much people are willing to pay for them, surveyors only try to give a guide to trends, and tend to be slightly conservative out of self interest.

Why does the OP describe himself as a bear?

[abharrisson]

sure, he could be wrong, but the mortgage aint coming.

And even in todays world if the buyer did get the valuer to up his valuation the mortgage may still not come as lenders are less inclined to take re-stated valuations... meanwhile the buyer has lost his survey fee.

[Bloo Loo]

And even in todays world if the buyer did get the valuer to up his valuation the mortgage may still not come as lenders are less inclined to take re-stated valuations... meanwhile the buyer has lost his survey fee.

is that right?...I guess they must be aware now of valuation fraudsters....I think they were hit rather badly in the last few years.

still, better to lose the fee than possibly £10's of thousands on repairs.

This reminds me of a TV prog about overseas purchases gone wrong. A lady wanted a lovely place in the South of France somewhere, had a lo cost survey done which revealed an infestation. SHe assumed it was nothing, the seller was pleased and keen to go, so the deal proceeded.

the infestation however, was one which affected many local homes, and to fix it needed MOST of the structure of the house replacing with new wood. needless to say, it was not a happy ending.

[abharrisson]

is that right?...I guess they must be aware now of valuation fraudsters....I think they were hit rather badly in the last few years.

still, better to lose the fee than possibly £10's of thousands on repairs.

This reminds me of a TV prog about overseas purchases gone wrong. A lady wanted a lovely place in the South of France somewhere, had a lo cost survey done which revealed an infestation. SHe assumed it was nothing, the seller was pleased and keen to go, so the deal proceeded.

the infestation however, was one which affected many local homes, and to fix it needed MOST of the structure of the house replacing with new wood. needless to say, it was not a happy ending.

The buying homes abraod stories are amazing aren't they.

I have little time for surveyors anyway.. they are a necessary evil the mortgage lenders tell us we have to have.. their pricing is often slapdash, and their full surveys generally are so heavilly caveated as not to be reliable... typically " the roof was in good condition as far as could be observed by binoculars"... I had a dispute with one once over a defective wood beam (damaged by previous damp) which he hadn't mentioned.. he claimed ( and he was right) that I would have no case to answer becasue he had not formally stated that section of beam was in good condition therefore not identifying the problem will be covered under the general get out clause all these surveys have.... scheisters the lot of them in my view.

[D179]

The buying homes abraod stories are amazing aren't they.

I have little time for surveyors anyway.. they are a necessary evil the mortgage lenders tell us we have to have.. their pricing is often slapdash, and their full surveys generally are so heavilly caveated as not to be reliable... typically " the roof was in good condition as far as could be observed by binoculars"... I had a dispute with one once over a defective wood beam (damaged by previous damp) which he hadn't mentioned.. he claimed ( and he was right) that I would have no case to answer becasue he had not formally stated that section of beam was in good condition therefore not identifying the problem will be covered under the general get out clause all these surveys have.... scheisters the lot of them in my view.

They are not all scheisters..... I do not do residential surveys, and although i cacept that the surveyrs are a little vague a majority of the resi surveyors I have met with, whome I have no personal relationship may I add, have been pretty decent and honest people. They are definately not from the same cloth as EA's and sharky finacial advisors.

An anecdote for you, I was talking to one recently who said that he had to survey a property tht was due to go to Auction, he said that the it was riddled with severe problems. On the day in question, it was an open day on the property, a majority of the people there were seriously looking with a view to bidding on it blind. He advised some of them that although he could not give the details, they should definately get some advice before bidding. He was conceerned that somebody would end up with a pile of trouble without a clue.

[noff]

Hi all

Thank you for the replies, my OP was a genuine post and I have been back in touch with the EA reiterated my offer to purchase at 385K less the cost of any major work that may be required.

I have faxed them a copy of the valuation page of the report only (no further details just the valuation page) and they will be approaching the vendor offering as above.

I do think the housing market has some way to fall from where we are now however we have no mortgage and quite a bit of money sat in the bank doing nothing. We have acheived a good price for our house (about 12% off peak) and my wife has seen this house that she loves (I can take it or leave it to be honest) and I have no problem with them not accepting the offer as I will just walk away, in the same time satisfying my wife that I have offered the amount that the house has been valued at with the vendor not being interested in selling at the correct rate. I would not need a mortgage if the offer of 385K was accepted. (I would need a small one for 435K).

[live in hope]

I was trying to work out the ea's angle for the aukward behaviour and there it is.

Nail on the head, caught out with massive overvaluation.

Not necesserily. A sale at any price is far more important to them than a vastly reduced price.

[Selling up]

Spot on

The market value for this property was £435k because that was the figure offered by the person who sets the actual price the purchaser. The fact some surveyor sets the price lower for his valuation estimation purposes is totally irrelevant.

Actually raises a fascinating point, to which Bloo Loo alludes.

The market price is the clearing price at which demand meets supply to create a sale.

Remeber that economic demand is the desire and ability to buy an item at a given price.

This guy was happy to offer £435k, IE he had a desire to pay 435 for the property. But since he was the only one bidding 435, and he did not have the ability to raise the capital to pay this price, there was in fact no demand for the property even at 435.

Therefore 435 has not been shown to be the market price.

Interesting paradox: The surveyor's opinion of what is the market price is one of the determinants of the market price.

Edited June 2, 2009 by Selling up

[Alfie Moon]

Not necesserily. A sale at any price is far more important to them than a vastly reduced price.

If the majority of Estate Agents understood this transactions would not have fallen to the historically low levels that they have done over the last year or so - and remain incredibly low. Don't underestimate the stupidity of Estate Agents - they have, as a group, consistently failed to adapt their approach to Estate Agency to work positively with falling prices, and very much to theirs and vendors detriment. Even retired Estate Agents can't believe how stupid current day Estate Agents are being.

[deeplyblue]

Agree with all that has been said so far.

I wanted to add: you have no obligation to share the valuation report with anyone, but it seems to me that in this case it might be in your interests to do so...

I certainly did so when I bought a home in 2002 and the valuation came in a few grand under my offer because of damp.

Showing the vendor the survey result was then a starting point for further negotiation.

I think that OP saw in his contract with the surveyor what I also saw. There was a clause which said (I paraphrase), "You cannot show this report to anyone else except your solicitor." I suspect that what they are mostly trying to do is prevent you pulling out of the purchase and then selling the document on to the replacement buyer - which is something we were asked to do. (But didn't, in case anyone wants to know - we had after all signed a piece of paper that said we wouldn't.)

But technically, if there is a such a clause in the contract, then you can't show it to the vendor either.

However, I see no reason why you should not pass on the major conclusions of the survey - starting with a valuation figure if that is part of the survey.

I got the impression that OP was reluctant to negotiate further, as he didn't have the measure of the vendor, and was unsure of his own legal and moral position. This was why I recommended the simplicity of sticking to letters, which leaves a clear record, and makes silly stunts like the one the EA was trying to pull more difficult. If he wants to negotiate then face to face meetings may be inevitable, though these too should be followed up by letters saying, "At our recent meeting on x June 2009, at your house, it was agreed between us that: etc etc."

If, however, he just wants to have a "take it or leave it" encounter, then that can be done by post.

db

[deeplyblue]

Hi all

Thank you for the replies, my OP was a genuine post and I have been back in touch with the EA reiterated my offer to purchase at 385K less the cost of any major work that may be required.

I have faxed them a copy of the valuation page of the report only (no further details just the valuation page) and they will be approaching the vendor offering as above.

Small-ish point. The surveyor's report should clarify this, but his valuation was probably a judgement about the market price of the house - with all the faults in place. So, to take a thoroughly hypothetical case - if he thought that the market value of the house in perfect condition was 410K, but that it needed 12K worth of work, he would then have given the market value of the house as 410K-12K = 398K.

So the 385K may represent the market value having taken the cost of repairs into account already. You should ring him and find out, if you are in any doubt on this point, or if you wish to negotiate with the vendor.

db

[live in hope]

I'd pull out or offer under the valuation.

Don't be shy around EAs or they will have the shirt off your back. My gues is that the EA is very emabarrassed by the massive difference in his 'valuation' and the house's true market value.

You'll make him/her look an idiot if they have to pass on this info to the vendor, and weaken the relationship they have with them.

There's nothing to stop you personally knocking on the door of the house and speaking direct with the vendor. Maybe you could show them the bits of the survey you want that will prove the valuation compared to the parasite's valution.

****** the EA. They are merely agents who just want to profit from a high sale price.

From a pure business point of view all this is correct of course. However in the current climes mortgage valuations may be on the conservative side. It depends on whether the house is to die for from your point of view. If it is ordinary or estate house the valuation is probably accurate. If its good on a good plot, you might consider would another valuer/mortgage company give a different valuation. True there is always another house, but some are more desirable than others, and in the end worth a little bit more. Sometimes we can lookback and think a bit more would not have lost a very nice house.

[pie-eater]

From a pure business point of view all this is correct of course. However in the current climes mortgage valuations may be on the conservative side. It depends on whether the house is to die for from your point of view. If it is ordinary or estate house the valuation is probably accurate. If its good on a good plot, you might consider would another valuer/mortgage company give a different valuation. True there is always another house, but some are more desirable than others, and in the end worth a little bit more. Sometimes we can lookback and think a bit more would not have lost a very nice house.

I guess if the OP really wants it and can afford then he'll pay.

It all comes down to different pressures and pulls, with money not always been the deciding factor in some cases.