372 How reliable are property surveys/valuation?

Just had a survey back in property that we are interested in and it is 10% lower than the agreed price. We feel that the owner should now consider the survey and lower the price - the agent states that price valuations in Italy are very unreliable? Can anyone please shed some light based on experience.

Thank you.

Category
Property Sales/Rental Advice

Submitted by Anonymous (not verified) on Fri, 05/06/2005 - 04:42

In our experience, a property is worth only how much a buyer is willing to pay for it.
I'd say 10% is well in the ballpark for the asking price, and you shouldn't be too worried. If it was a 30% or 40% difference it would be a different matter.

If the survey was carried out by a geometra, they probably used tables listing prices of property for the previous year, giving prices for certain areas on a per square metre basis. However, these tables come from various sources (osservatori) and can differ. Also, they don't take into account special features such as an extraordinary view, special features which may make it stand out from others that are similar, other things which make a buyer fall in love with a place.
The price is at the complete discretion of the seller: if someone thinks their property is worth a million pounds and won't sell unless they get that figure, then that's what you'll have to pay if you really want it! We had sales fall through because the buyer was determined to negotiate and the seller simply refused. Is it a private seller? They may be more willing to negotiate (or more stubborn if they think their home is wonderful) than a company, which has to cover costs and make a profit. They usually calculate their selling prices on a per square metre basis, and don't always allow for negotiation.

You can try to negotiate but the survey valuation is by no means definitive. Also, have Were you happy to pay the asking price before the survey? Have you looked at other similar properties on the market?

Sarah

Submitted by Anonymous (not verified) on Fri, 05/06/2005 - 08:38

With regards to the market value of rural properties, it is impossible to generalise about price because there are so many variables, many of which are subjective. These are not easy to quantify.

But your survey should include, apart from the estimated market value of the property, a detailed description of the building with all its faults and what, as a matter of priority, needs to be done to put them right. You have to remember that derelict properties can produce unexpected and unwanted surprises and you certainly don’t want to be burdened with any unexpected expenditure after you have bought the house.

The survey, if done professionally, should give you an idea of what you need to spend in order to rectify any potential faults. This information can be very useful when negotiating the final price.