What happens if the survey valuation is higher than my offer?


So what happens if you have a valuation survey carried out on a property and the surveyor says the property is worth more than what you offered. Absolutely nothing but shhhhh! Let me explain.

You instructed the surveyor and their job is to report to you on what they think the property is worth. If you're getting a mortgage they'll also be reporting to the lender that its ago to lend you money because if you don't pay it back they can always take the property and sell it.

Because the surveyor was your instruction the seller doesn't get to see what he or she says in the report so just let sleeping dogs lie as they say.

Sellers who sell privately are prone to underselling. They think their saving money by avoiding estate agency fees but often get offers below the market rate. Bit of a false economy but hey, they're happy because they think they saved something.

It only becomes an issue if the surveyor is in the property at the same time as the vendor, they get talking and the surveyor says something like, "You know all the other properties like this one which I value round here sell for a lot more than the offer you've got.

OK, then you might have a problem and the seller might pull out unless you up your offer but generally this is really rare. If your offer is just slightly below the market value - say 10 to 15% - a professional surveyor probably isn't going to say anything.

I have had one conversation with a surveyor though where it was quite obvious that an elderly couple were being taken for a ride. Their property had gone up so much in their lifetimes that they thought the offer they had got was astounding but it was nearly 50% below what they could have achieved.

The surveyor and I talked about it at length because it is such a rare occurrence and who were we to interfere but in the end the surveyor did decide to have a chat with the couple and they then decided to withdraw from the sale.

Happy ending.

Search Results for 'valuation' in
How to Really Buy a Property

"... better companies become wilder in their claims about profit potential and many new and more suspect businesses also entered the field, all offering similar services. Long before the Credit Crisis struck hundreds (perhaps thousands) were loosing money on purchases that were just simply overpriced, others were falling victim to full on scams where the investment company, developer, insurer, financier and sometimes even the surveyor providing the valuation, were..."
"... lay vacant or to subsidise them when tenants moved in. valuations by agents revealed that if he needed to sell fast he would have to accept a ten to fifteen percent loss which, after paying their fees, might not cover the loan. The investment company blamed an unusual and unexpected..."

"... general the smaller the firm, the less finances it has for this. Even if the company is insured they will not want to see their annual premiums increase. And so small operations or one-man-bands will often work to undermine the sale through down valuations or picking up on matters which are normal for the building they are looking..."

"... result of the surveyors visit is a valuation. The surveyor will either agree or disagree with the sale price. The latter is known as a down valuation. Most buyers are unaware that, for this visit, the surveyor is not acting for them and can rightly refuse to tell them the result. He has been instructed by the lender (even though you may have paid the lender a fee for the survey) and only the lender can tell you the surveyor's..."
"... a buyer there are certain inspections that you may want to carry out to make sure the property is in the condition that you believe it to be. The most basic and recognised is a survey. As a cash buyer you may simply want to carry out a valuation survey to get a second opinion of the price you think the property is worth. If you are applying for a mortgage the lender will have carried this out for their own records and will make you aware of the results (see..."
"... aware of the results (see above). You can go into more detail by requesting a homebuyers survey or a structural survey. If you are applying for a mortgage it usually makes sense for the surveyor who is doing the valuation to also carry out the second survey. A homebuyers survey is the usual..."

"... - why different surveyors can say different things about the same property Types of Survey - There are three types of survey: The valuation The Homebuyers The Structural - The valuation Survey - This is crucial as if the surveyor does not agree with your offer price the..."
"... about the same property Types of Survey - There are three types of survey: The valuation The Homebuyers The Structural - The valuation Survey - This is crucial as if the surveyor does not agree with your offer price the bank won't lend. It is also the most valuable type of..."
"... is crucial as if the surveyor does not agree with your offer price the bank won't lend. It is also the most valuable type of survey and probably all you need for almost any purchase. Most people are not aware that the valuation survey will also report on anything crucial that should be investigated. If they believe there is a serious problem with, for example, damp they will hold back all or part of the mortgage until it is investigated (see below). It is much easier to read a two page report that is very specific about major issues that will affect value than a fifty page report telling you that the aerial may need re-fixing and one of the windows in the back bedroom needs to be repainted in the next twelve..."
"... will probably come as a shock to find out how the surveyor actually works but it goes something like this. They visit the property and check for any really big problems that will affect value. They then look up and down the street for sold boards and 'phone up those agents to ask them what they have sold. In the modern world they can also check the history of sold properties in an area on the internet. If they find similar properties sold at similar prices they sign the valuation off and you get your..."
"... one of the biggest waste of times in the whole home buying process. It is a valuation survey followed by a lot of speculation. You are likely to find out fascinating things like screws missing from plug sockets, wood that needs replacing in windows, kitchen cabinet doors that need to be fastened. The crucial thing on this survey is the valuation. If, with all the property defects, the surveyor still concludes the property is worth the agreed price then (unless the vendor is very desperate to sell) don't try to use it for negotiation. If the survey states that 'in it's current condition the property is worth x' and x is the price agreed then there are no grounds for..."
"... older houses these are generally seen as a must have by almost anyone who has written on the subject but again you need to take a view. If there is something structurally wrong with the property a valuation survey will pick that up. Its most important feature is probably that it will be useful when you come to sell the property as you can show it to a potential buyer under the guise, "When I bought this house X, Y and Z were wrong. I had them all fixed and here are the guarantees or receipts." (See Chapter 22: Why Vendors are Poorly Prepared..."
"... the surveyor is simply someone who is trained to see tell tale signs that then require you to get a further specialist in. If you want to be thorough and save time then get a valuation survey and at the same time pay for a roofer, plumber, electrician and damp specialist to inspect the property (for freehold properties pay a structural engineer as well). You will short-cut the long survey report and you will know the absolute worst case scenario as each specialist going in will be hunting for work. Then you can take a proper quantified..."
"... are hundreds of survey companies in major cities. Most of the time the choice of who to use will be made by the lender you are borrowing the money from. For the lender what you want is not important, it is not your money that will be tied up in the property. But the bank will generally only want to know that what you have chosen is a "safe bet" and so they will only ask for a valuation report. Anything beyond this is up to..."
"... be aware that small companies tend to down value properties to protect themselves (it will also stop you getting the mortgage) and many buyers loose perfectly good properties in a rising market because of this. Further still a small surveying company may not be carrying out many valuations and so in a competitive rising market they may be out of date in their thinking and also down..."

"... the same note ensure that whoever values your property will get part of the fee if it sells. In this way you know they will give you a realistic valuation because if they are simply paid a flat fee for every instruction they will be tempted to overvalue and the negotiators who are supposed to sell it will become demotivated. You may be surprised how many managers or valuers are just targeted on getting the instruction and so simply over value and over promise in order to get your property onto their books and hit their individual..."