I have just received my Surveyor’s Report on the property I am buying and it has been valued at a lot less than I am paying. Does the owner have to reduce the price to sell the house to me? Or shall I pull out of the purchase?
Very rarely are properties undervalued on survey these days. This will usually be only in cases where the property is suffering from an unidentified defect of which you may not have been aware and the Valuer will quote a valuation for the property in its existing state and condition.
It may well be that the property is worth the purchase price once you have carried out the remedial works, but in such circumstances you will face having to pay the full price plus the cost of remedial works.
If there are essential repairs to be carried out, as highlighted by the survey, then you should re-negotiate with the seller to reduce the price either for the full amount of the cost of the repairs or agree some form of compromise. As with all such negotiations, the seller is not obliged to reduce his price.
Another possible reason for an under valuation is that you place a greater value on the property, due to some unique feature, or its position, than the Valuer. This is entirely a personal choice and if you elect to pay a premium for the property for this reason then this is entirely a matter for you.
Be aware, though, that your Lender will rely on the valuation obtained by its nominated Surveyor and will lend on any percentage of that valuation rather than the purchase price that you may be willing to pay.