Should I lower the price to sell my house quickly
When it comes to selling a home many don't know that you are in the hands of the surveyor when it comes to valuing your home and what you can sell it for. When a house is put on the market many people optimistically price their home because firstly they want to chance it and try and get the as high a price as possible and also people do seem to more often than not think their house is worth more than it actually is.
If a seller does get lucky enough to agree a price on their home for more than it's fair market value the likely scenario is that the RICS Surveyor will see this and the seller will be forced to reduce the asking price for their home even if a sale at a higher price has been agreed with the buyer.
Reason being most buyers will purchase using a mortgage, a surveyor will be sent from the mortgage lender to see how much the house is actually worth. At the end of the day it is the bank who believe they are buying the home, it is there money at the end of the day and the buyer is simply a vehicle for the bank to acquire a interest bearing asset. Bottom line a bank will not pay more for a property than it's actually worth. If they did it would be an unnecessary risk. Yes, in the good old days the banks would lend 120% mortgages meaning that you could receive 20% more than your house is worth. Those days are long gone and if a seller does get lucky enough to agree a price that's higher than the property is worth the bank will simply turn around and say were not paying more for a house than it's worth.
So what will happen in this scenario? The surveyor will down value the home. He will look at comparable's in the area and see how much they are worth and will also look at what price the seller originally paid for the home, factor in price increases and any improvements made. The surveyor will then decide how much the property is worth and will only give the buyer the lending facility up to that amount. Two things can happen here. Firstly, the buyer can turn around and say "the surveyor believes the house is worth a lower vale I'm not paying more than it's worth, not in today's market". Also, the buyer would be forced to raise a large deposit if he did want to proceed with the sale which also something he will be unlikely to do.
Most sellers at this stage will realise the powers that surveyors have and would be forced to lower their expectations for the value of their home. There is really only one way how you could sell your home for more than it's actually worth and that would be to find a true cash buyer who doesn't bother to use a surveyor and that surely would be a rare occurrence.
If a seller does get lucky enough to agree a price on their home for more than it's fair market value the likely scenario is that the RICS Surveyor will see this and the seller will be forced to reduce the asking price for their home even if a sale at a higher price has been agreed with the buyer.
Reason being most buyers will purchase using a mortgage, a surveyor will be sent from the mortgage lender to see how much the house is actually worth. At the end of the day it is the bank who believe they are buying the home, it is there money at the end of the day and the buyer is simply a vehicle for the bank to acquire a interest bearing asset. Bottom line a bank will not pay more for a property than it's actually worth. If they did it would be an unnecessary risk. Yes, in the good old days the banks would lend 120% mortgages meaning that you could receive 20% more than your house is worth. Those days are long gone and if a seller does get lucky enough to agree a price that's higher than the property is worth the bank will simply turn around and say were not paying more for a house than it's worth.
So what will happen in this scenario? The surveyor will down value the home. He will look at comparable's in the area and see how much they are worth and will also look at what price the seller originally paid for the home, factor in price increases and any improvements made. The surveyor will then decide how much the property is worth and will only give the buyer the lending facility up to that amount. Two things can happen here. Firstly, the buyer can turn around and say "the surveyor believes the house is worth a lower vale I'm not paying more than it's worth, not in today's market". Also, the buyer would be forced to raise a large deposit if he did want to proceed with the sale which also something he will be unlikely to do.
Most sellers at this stage will realise the powers that surveyors have and would be forced to lower their expectations for the value of their home. There is really only one way how you could sell your home for more than it's actually worth and that would be to find a true cash buyer who doesn't bother to use a surveyor and that surely would be a rare occurrence.
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