I have agreed a price for my house with a buyer and thought the sale was going ahead as planned – only to be told that my buyer’s building society surveyor has valued the property at £10,000 under the price we have shaken hands on. Can I insist on my buyer proceeding with the sale?
Surveyors vary rarely undervalue properties but this can arise where the property is of such a unique nature that you are willing to pay over the odds to secure the house of your dreams or the valuer believes the condition of the property in its unimproved state does not justify the price you are prepared to pay.
In this case, the valuation may be below what the buyer has offered to pay. This does not preclude the buyer from proceeding unless he is dependent on securing a mortgage for a high percentage of the purchase price.
Should your house be undervalued by £10,000 by the surveyor and the buyer wishes to borrow 90% of the purchase price, then he will only be able to borrow 90% of the reduced valuation as specified by the valuer. This may result in him being unable to proceed as he is unable to secure sufficient mortgage funds to purchase the property.
If, however, he is borrowing a lower percentage of the purchase price and he is willing to pay over the odds for the property, then this is entirely his prerogative but you cannot insist on him proceeding as of course until contracts are actually exchanged.
* Emyr Pierce is Managing Director of Emyr Pierce Solicitors in Rhiwbina, Cardiff, Western Mail Conveyancer of the Year, specialising in Domestic and Commercial Property. Contact www.emyrpierce.co.uk or email firstname.lastname@example.org