When it comes to buying and selling a house, the main problem will be all parties agreeing on what the house is worth. While you may think that it’s good news that you’ve found a buyer and accepted their offer, problems can occur further down the line if the buyer’s mortgage surveyor values the house for less than the accepted offer price.
What is a down-valuation and why does it happen?
A down-valuation is when the buyer’s mortgage surveyor thinks that the house is worth less than the agreed and accepted offer price. There are a number of reasons why this may happen. For example, following the acceptance of the offer, the homebuyers survey could identify a number of issues that need addressing that could affect the value of the house.
The risk of your sale falling through is high as the buyer has limited options to go through with the sale if the mortgage lender gives a down-valuation. Mortgage lenders take a long-term look at the value of the property, unlike estate agents, who stand to gain more commission the higher the sales value is. With the economic situation being uncertain right now because of Brexit and Covid-19, mortgage lenders are cautious about a slump in house prices and factor this into their valuations.
Anticipating Problems
The problem with the down-valuation is the time delay between accepting the buyer’s offer and the mortgage valuation taking place. In the event of the sale falling through because of this, it then becomes difficult to go back to other interested parties as so much time has passed that they may well have found alternative properties and moved on. Arranging a homebuyers survey to identify any potential problems further down the line may well save you time and money when it comes to selling your home.
When you put your house on the market, anticipate what might happen in the event of a down-valuation and be prepared for it. It’s important if you are looking for a homebuyers survey to see what costs are involved and how detailed the survey is.
It’s safer to pay what you can afford and have as much detail as possible so that problems don’t appear further down the line that could prevent the sale from going through. Prepare your sale thoroughly to make sure it goes through without problems.