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What to do if your property devalues
You've found a buyer for your property and they have agreed to a price: surely it's time to pop the cork and celebrate? Well, there still might be bumps in the road. And one of the most common issues is figuring out what to do if your property devalues.
Getting to grips with a devaluation
First, let’s get back to basics: What does it mean if your property devalues? The bottom line is that the home’s market rate (what it’s worth) is less than what you thought. This can happen if the buyer or the buyer’s lender does a survey of your property and comes back with a lower valuation than you were expecting. Why is this important? The lender may not be willing to lend the buyer the initial amount if they don’t feel the home is worth it. It can feel like a major blow, don’t panic — you have options. The most obvious one is to lower the price, but that can be frustrating — not to mention the added paperwork for both you and the buyer, and the added possibility of the sale derailing. Depending on the report, you may be able to address the concerns and raise the valuation. Here are our top tips for staying cool, calm and collected, and keeping your home sale on track.
Nobody likes bumps in the road when they’re selling their home, but it’s important not to panic."
Reassess First, it's time to look at the report. Remember that it’s the surveyor's job to raise every small detail, so the first thing to do is find the reason for the lower valuation. Have a look into how serious the situation is and fully address it with the buyers. Get as much information about the issue from the surveyor as possible and find out how quickly and easily the problem can be repaired. It may be something that you can fix within the timeline of the home sale. If you don’t feel the survey is fair, you could also commission a new report to get a second opinion, especially if you give the buyers a good enough reason for doing so (or if you offer to help foot the bill).
Repair Whether you proceed with the sale to the same buyer or not, you can use the report to remedy any issues that were raised. That could mean getting quotes to see about removing troublesome Japanese knotweed, or having a certified tradesman investigate suspected damp issues. Whatever the issue, remember to get several quotes for a clear idea of costs before attempting to push your home value back up to where you think it should be. Decide whether it's worth investing in fixing the issues yourself.
Renegotiate It might be that there aren’t specific issues for you to address. You may have already known about the issues and factored them into the price. Or sometimes homes are devalued simply because the surveyor disagrees about the market price of a property. If you can’t convince the buyer to get a second opinion on this, you may have to accept the opinion of the surveyor and renegotiate the house price. Try to be considerate when weighing up the impact of the surveyor's report on the value of your property. Consider any new offers carefully, and weigh them up against what you believe is the fair value — as well as the cost of finding a new buyer — before you decide.
Nobody likes bumps in the road when they’re selling their home, but it’s important not to panic. Often, they’re issues that you can address. When in doubt, your estate agent and your conveyancing lawyer should always be there to guide you through. Remember, it’s a marathon — not a sprint.
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