Commercial Property valuation
Commercial Property valuation
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Discussion

Busy boy

Original Poster:

9 posts

45 months

Wednesday 19th January 2022
quotequote all
Hi all i already have a deal agreed on a purchase of a commercial property but the morgage company has had a independent valuation carried out and its falling short of the agreed price i of course dont want to pay more than its worth but really want the deal frown

Any similar situation's you have been in ? other than re do the deal i dont know what to do ,problem is the Loan to value is only 75% so will leave me short


Noel

586 posts

269 months

Wednesday 19th January 2022
quotequote all
It happens from time to time. Id be interested to understand what it is and where.

If the valuation is low why don't you go back to the vendor and explain the situation. If they will sell for the lower price you've saved money.


keith333

373 posts

158 months

Wednesday 19th January 2022
quotequote all
You could ask the seller to meet you halfway between what you've agreed and the latest valuation. There is no guarantee that they will move, but if you don't ask you don't get...

You could get a personal loan to cover any extra you need. TSB are offering them for 2.8% and Santander 3.3%. Both will lend up to £25k (TSB £50k) over five years.

Or increase the mortgage on your own house if you have one.

Louis Balfour

28,176 posts

238 months

Wednesday 19th January 2022
quotequote all
Busy boy said:
Hi all i already have a deal agreed on a purchase of a commercial property but the morgage company has had a independent valuation carried out and its falling short of the agreed price i of course dont want to pay more than its worth but really want the deal frown

Any similar situation's you have been in ? other than re do the deal i dont know what to do ,problem is the Loan to value is only 75% so will leave me short
It's happening a lot recently. We've sold a few properties of late where the buyers have had to drop in much more deposit than they thought. Some of the nonsense that surveyors have been coming out with to justify lowball vals is quite astonishing, too. In the past 30 years I have never known anything quite like it.

You can either borrow some unsecured money and refinance later, or try another lender in the hope of getting a surveyor with a different opinion.








matjk

1,112 posts

156 months

Wednesday 19th January 2022
quotequote all
Had exactly this , the values seem to be extremely pessimistic and have been for some time ,
When we questioned why they thought it was overvalued they showed us some empty shells 45 miles north of us and tied to compare like for like.
For us the deal fell through , which worked our brilliantly as we got a £300k building for £152k 1 year later . Still not sure how we got an industrial free hold building at half price , but we did

Busy boy

Original Poster:

9 posts

45 months

Thursday 20th January 2022
quotequote all
Thanks all for the reply's am going back to the seller and go from there

Castrol for a knave

6,222 posts

107 months

Thursday 20th January 2022
quotequote all
matjk said:
Had exactly this , the values seem to be extremely pessimistic and have been for some time ,
When we questioned why they thought it was overvalued they showed us some empty shells 45 miles north of us and tied to compare like for like.
For us the deal fell through , which worked our brilliantly as we got a £300k building for £152k 1 year later . Still not sure how we got an industrial free hold building at half price , but we did
That might be due to the Valuer correctly identifying a falling market (though it is a hell of fall).

As to the OP - how close to your purchase price were they? There is usually a tolerance of around 10%, but if more, then it should be addressed it the valuation. Does this specific property address a need specific to you i.e. is it "Worth" more than the wider market would pay?




Busy boy

Original Poster:

9 posts

45 months

Sunday 30th January 2022
quotequote all
Have any of you had any luck with having another valuation carried out ? Not sure if its worth doing again as the numbers might be the same again or less

ooid

5,407 posts

116 months

Sunday 30th January 2022
quotequote all
I'm not a professional valuer (yet), but worked on a valuation recently on a central London commercial property. The asking price was nearly £90 million. (late 2020). The building was sold around £70 million (early 2021) and it has been sold to someone else again over £90 million. (2022).

Depending on the tenants and the comps, it might change a lot.

Rufus Stone

10,596 posts

72 months

Sunday 30th January 2022
quotequote all
What a strange world.

I was recently party to a purchase where the banks valuation came in at 20% higher than what we were paying. This caused no end of problems. laugh

DaveA8

695 posts

97 months

Monday 31st January 2022
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It’s difficult, as someone who sold a commercial property that was not suited ( well easily) for anything other than offices, the market is surprisingly small, it’s ironic as they are a nightmare to find and a nightmare to sell.
For an owner maybe useful to occupy.
I say this as unless the unit has wide appeal, the seller may not be in as great a position as it first appears
If the unit is suitable for conversion to residential then and there’s a market, that’s a different matter