Buying a home can bring all kinds of additional stress along with it, from searching for the right house, to going to viewings and deciding on where you want to relocate to. The last thing you want after jumping through all of the various hoops that home buying brings is to receive your house survey back and be left asking yourself what to do if surveyor devalues house?
In this article, we will be looking at what it means if your property is down valued, the reasons it may get down valued and what to do if surveyor devalues house.
Looking for a quick answer? Check out our drop-down menu below!
- What Does It Mean If A Surveyor Devalues your House?
- Why Would A Surveyor Devalue A Property?
- What To Do If Surveyor Devalues House?
- Will A Mortgage Company Still Lend Me The Same Amount If They’ve Undervalued The Property I Want To Buy?
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What Does It Mean If A Surveyor Devalues your House?
Asking yourself what to do if surveyor devalues house is the last situation any potential homeowner wants to be in, but to fully understand what to do, we first need to look at what it means if a surveyor devalues your house.
If your property devalues, it means that your home’s market value is worth less than you thought. This usually happens when the buyer or their lender does a survey of your home and it comes back with a lower valuation than you were originally anticipating. This can have a knock-on effect and can mean that as a result of the survey, the lender may no longer lend to the buyer the initial agreed amount if they do not feel the home is worth it.
A house being devalued can happen to you whether you are selling or buying and puts you in a difficult situation. The important thing to remember should this happen, is to keep calm.
Why Would A Surveyor Devalue A Property?
There can be many reasons as to why a house may be devalued during the survey. Whilst you may have your heart set on your dream house and may find it easy to overlook certain findings, mortgage lenders do not share this viewpoint. Mortgage lenders’ main priority is to protect their debt and take into consideration how difficult it may be to reclaim that debt if a house has been overvalued.
The surveyor’s valuation is based on two main factors:
- The current state of the house you’re looking to buy
- The prices of recently completed sales of similar properties in the area
The definition of ‘recently completed’ as far as valuations are concerned is usually around six months for a house that is within the local area and is in a similar condition and size.
The most common reason that your house may get devalued is because of underlying damp and subsidence issues.
If the agreed price of the property is greater than the price of similar houses sold in the area or if the condition is less than what should be expected, then a surveyor may need to revise the value to reflect this.
What To Do If Surveyor Devalues House?
Now that we have looked at what it means to have your property devalued and the reasons it may be down valued, we can look at what to do if surveyor devalues house.
If your property has been down valued by the surveyor, the important thing to do is to remain calm. Whether you are buying or selling, there are options that you can take if you truly have your heart set on the house of your dreams.
If you are selling a property that has been down valued, your most obvious option is to lower the price but this can bring its own problems, as it brings along with it additional paperwork for both parties as well as the added risk of the sale potentially derailing.
Depending on the contents of the survey, you may be able to fix the concerns addressed in the valuation. It is the surveyor’s job to find and highlight every detail in the property, no matter how minor. Look through the survey and assess what exactly is devaluing your property.
This could be a case of paying for Japanese knotweed treatment or having a certified professional investigate any suspected cases of damp. When resolving issues highlighted by the surveyor, make sure that you get several quotes before committing to one.
The downside to going down this route is this can be a frustrating and potentially expensive process.
Whilst it can feel as though the wholesale is being derailed, as the buyer there are steps that you can take:
- Appeal against the valuation
- Use a different lender
- Renegotiate with the seller
- Put more money in
- Go with a higher loan-to-value
Appeal against the valuation
One of the routes that you can go down is trying to appeal against the valuation. It is worth bearing in mind that appeals are rarely successful but on occasion, a lender will rethink their decision if as the buyer you are able to provide strong evidence of recent, comparable sales for similar properties in the area.
As the buyer, you can also apply for a more thorough valuation as long as you are willing to pay for the cost. However, if this is the option you decide to go with you should be certain that it will make a difference. If you are doubtful, appealing against the valuation is not a good idea.
Use a different lender
Another avenue that you can explore as the buyer is applying for your mortgage again but going through a different lender. This is an option that is often chosen in the hope that a different surveyor will be appointed who will look over the property with kinder eyes.
However, it is important to remember that doing this can affect later stages of the application, especially if numerous mortgage credit checks have been completed in a short timescale.
As lenders usually use a panel of surveyors to do their checks, using a different mortgage provider increases your chances of getting a more favourable result as a new mortgage provider will use a fresh set of eyes to view the property.
Renegotiate with the seller
One of the most popular options favoured by buyers who are wondering what to do if surveyor devalues house is to negotiate the price of the property with the sellers. As you will have an official valuation from a bank or building society it will be hard for the seller to dispute the issues highlighted and may make them more open to negotiation.
This is particularly effective if the seller is already in a property chain and is looking to move into their new house quickly or if their house has been on the market for a while. But even if the house is devalued by the surveyor, the seller is under no legal obligation to lower the price, so be wary that they may walk away from the sale if the original price is not paid.
Put more money in
If you can afford to, there is nothing stopping you from putting money from your savings down to cover any money in devaluation. If your home has been devalued by £4,000 and you have an extra £4,000 in savings, you can put it towards the purchase but beware that you will have less cash to spend on other aspects of the house if you choose this route.
Go with a higher loan-to-value
Another option for you as a buyer is to try and get the lender to agree to a higher LTV (loan to value). This will mean that whilst you may secure the house of your dreams, you will be paying higher mortgage prices.
Will A Mortgage Company Still Lend Me The Same Amount If They’ve Undervalued The Property I Want To Buy?
If the surveyors have undervalued a property, then the new valuation will form the basis of the mortgage offer they will make to the buyer. This means that it is likely that the loan amount that was originally applied for will change.
Mortgage lenders decide how much a buyer can borrow based on a percentage of the value of the house that they want to purchase. A reduced valuation can make it harder to agree terms as it can alter the entire package – both the amount to be borrowed and the deposit that’s required.
This covers everything you need to know about what to do if a surveyor devalues your house. If you have any questions, queries, or insight into the subject, please feel free to get in touch!