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Selling house - should estate agent have warned me of this pit fall
Dirtyhippy
Posts: 2,059 Forum Member
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I'm selling my house, got a buyer, agreed price.
Buyer had survey, surveyor decided my house was over-priced by 10% and wouldn't agree the mortage for the buyer, we diagreed after having 3 estimates from 3 estate agents in the area who all valued my house at roughly what we "sold" it for.
Sale fell through and chain of 4 collapsed, we simply couldn't afford to sell at minus 10%, we had already taken £5k off asking price. We are talking a terraced house here so it was a lot of money relatively.
I'm very disapponited that I wasn't waned this might happen so we could at least be prepared for it, should my estate agent have warned us?
Buyer had survey, surveyor decided my house was over-priced by 10% and wouldn't agree the mortage for the buyer, we diagreed after having 3 estimates from 3 estate agents in the area who all valued my house at roughly what we "sold" it for.
Sale fell through and chain of 4 collapsed, we simply couldn't afford to sell at minus 10%, we had already taken £5k off asking price. We are talking a terraced house here so it was a lot of money relatively.
I'm very disapponited that I wasn't waned this might happen so we could at least be prepared for it, should my estate agent have warned us?
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I assume the buyer made an offer at the selling price and its their mortgage company surveyor who decided it was overvalued. I am guessing there is not much the buyer could do about it ?
Are you buying as well, you should be aware that all mortgage offer are subject to surveys though I am surprised that if you were asking the going rate that the surveyor thought it was over priced. Is there any work that needs doing on the house ?
Probably not.
Or, to put it another way, if the Estate Agent had warned you that it could happen, would you have done anything differently ?
Sure, it sucks for you, but there's no-one to blame really.
What your describing happens a lot in England. I believe Scotland have a slightly different system to ours, where this may have been avoided.
We have put the house back up for sale at a slightly reduced price but looking at Rightmoves it seems to me we pitched it at the going rate and I have been told by my and other estate agents a different surveyor could value it higher. So it seems all a bit abitrary to me.
Very perceptive of you, no but they get a nice little fee from me and I think buyers deserve good and timely advice for that fee.
The value was not based on faults with the house, he based the value on historical house price data in the area.
Yes, valuation isn't an exact science. 10% is the normally-accepted margin of error, so it doesn't sound like an outrageous difference. And many buyers would be able to afford to make up the balance anyway if they had enough cash (or they could try to find a more helpful surveyor).
At the end of the day this is just one of many variations on "the buyer offered a price which it turns out they can't afford", and I think it's self-evident that that sometimes happens.
It's a process which happens in virtually every mortgage offer, and it is, I believe, very common for the valuation to be lower than the agreed price. Or for the mortgage to be agreed subject to, for example, a new roof being put on within three years.
The buyer can also arrange surveys of various kinds, which can reveal flaws leading to a price being re-negotiated or sale being cancelled.
I'm afraid that in England house sales are a risky process for the seller until contracts have been exchanged. They're not absolutely certain then, but at least the seller has recompense.
The lender may instruct the survey, but I've never known their survey to be carried out other than by a professional surveyor (the banks do, after all, want someone they can sue if it turns out they were wrong!).
there was no retention specified so it couldn't have been that serious, there are always faults with a house if you look close enough but we have spent thousands putting in a new roof, CH, double glazing, doors, kitchen and bathroom over the last 10 years.
It looks as if you're into the 'too expensive for the street' syndrome.
I'm on my ninth house and no sales have ever gone without incident. The only time asking prices have been paid has been after long delays in a rising market. It's a minefield.
When we moved to our current property we had a problem on the day of exchange because someone in the chain decided they didn't want to pay as much anymore, it had been a complicated chain upto that point, so everyone else in the chain agreed to pay £1000 more to ensure the chain didn't collapse. All sorts can go wrong, it is all part of the game.
I'd agree, theres a 'ceiling price' that you can't go beyond no matter how much you do to a house.
Best thing is to have a look on nethouseprices.com to see what houses have fetched on your road in the past. Then get several estate agents round to give you a valuation. The temptation is to go for the highest, but now you know why thats not such a good idea - best to go with the one who's sold the most in your area.
Good luck - buying when you have to be in a chain is a complete gamble but a decent estate agent (ie one that has a track record of selling!) would make sure potential buyers really can afford the asking price...
I did get 3 agents opinions and we pitched in the middle and properties on Rightmove seemed to echo the asking price give or take a couple of thousand.
In that case, what advice do you want ? Do you want us to say you should have some come-back on the estate agent, because you don't. They don't seem to have priced you outrageously and they'll not have made any money on your sale so will be just as pissed off as you are.
Would you have done anything different if the estate agent had told you at the outset that sometimes a sale falls through for a number of reasons ? I suspect not, and it won't have mattered what agent you used.
Surveyors for mort vals will need to get comparable evidence to justify a selling price, if the justification isn't there on previous house sales, they will down value - It sometimes doesn't help if the valuer doesn't know the area and has too many to do a day.
Once had a surveyor down value a property because of the close proximity of some large trees - not a tree to be seen anywhere near the property, despite us sending over photographic evidence, the property was still down valued because of the non existant trees. Another was downvalued because of an 'illegal' loft room - whereas all the properties in that road were built with the loft room originally.
Yes, because seller never insist on asking way over the odds for their property and I really don't have a house currently priced about £250,000 over what it should be (and the owner currently moaning at me because no one wants to see his house)
Yup, that's all I do, all day every day, nice cushy life I lead :rolleyes:
BIB is almost certainly the actual problem.
More opinion than advice, as my original post - should the estate agent have warned me about down valuing by surveyors.
I'm not whinging, yes I'm disappointed but shit happens, mainly in the £450 I forked out for the survey of the property I was going to buy (that I cannot now afford).
Down valuing can be very difficult to predict, from what you've said the price sounds about right, but the surveyor is one person, and it's down to his/her opinion, backed up by what comparables they can find. It's not an exact science, and can't really be predicted what the outcome will be - especially if the surveyor doesn't know the area.
Honestly I've had properties I'd have laid good money were going to be down valued go sailing through their mortgage val, and others down valued for what seems like no good reason.
It's a horrible thing to happen, but unfortunately it's one of the very, very many reasons for sales to fall through.
In my opinion, not really. It could maybe come up in a conversation about things that can go wrong, but as there are so many then it's hard to go into. Would you expect the estate agent to warn you that a buyer could die before contract exchange ? That subsidence could affect the area ? That new proposals could be made for a Lidl over the back fence ?
Back to my earlier question, if the estate agent had warned you, would you have done anything different ?