house down valued, get stuck in a chain(14 Posts)
I am selling my current property to move to somewhere bigger. I have accepted an offer on my current property and also got my offer accepted on the property I want to buy. The mortgage is secured and the survey report for the property I want to buy gave all the green lights. My conveyancer is already communicating with the vendor's solicitor as well as the buyer's solicitor.
However, the person who is buying my current property came back to me last week, saying my house has been down valued by his lender by £18000 and the maximum extra fund he (i.e., the buyer) can raise is £8,000. So there is a £10,000 gap.
I need adequate funds from the sale so I can move on to the purchase. I don't have the £10,000 myself to fill the gap. So it leaves me no option but to put my property back to the market.
Shall I tell the situation to the person above me, asking whether he (i.e., the vendor) can lower the sell price a bit? For example, if my vendor can lower the sell price by £3000, I can then try to lower my property price by £6000 (£3000 of which is passed on from my vendor). That means my buyer needs to raise another £4000. It will be easier for my buyer to raise £4000 instead of £10,000 (not sure whether they will be able to raise £4000)
I haven't discussed this with my vendor or buyer yet. Is it worth trying? What will be the best way to handle this situation. What will be my options? Any advice will be greatly appreciated.
Have house prices in your area actually dropped? Or is the buyer realising they've overstretched themselves and is trying to negotiate on price?
Yes, ask the seller. This is what estate agents are for.
I have heard of each person in the chain to take a small knock to keep it together.
But it depends how big the chain is, how long before completion and what the housing market is doing.
Round me house prices are going up 1k a week at least so remarketing would be better.
if the problem is the mortgage valuation for the buyer, then putting it back on the market may not help? surely all other buyers will have the same problem?
if Banks are not willing to value the house for the sale price, then that going to cause an issue. Has the buyer considered another valuation by another lender?
I'd go for a combination of getting your buyer to try another valuation - is the sellung price realistic for what has sold nearby?
And also taking to the rest of the chain about if a drop of a few k to keep the chain is possible.
Yes - it might be the lender has valued low and another may value higher. The EA can possibly assist as they may know which lenders to approach instead. Not that I would recommend using their broker.
Otherwise can your seller take a hit on the sale price of their house? To be honest if your buyer has already said the maximum they can raise is £8k then whether they are asked to find another £4k or £10k is irrelevant if they don't have the funds.
I'd also be asking for the valuation to be forwarded to my EA or solicitor before agreeing. Before I proceed, I'd want to know it was true rather than the buyer trying to pull a fast one in order to drop the price. It's quite convenient he can raise exactly 8k to drop the price by a round 10k.
Yes ask to see the survey report to make sure they aren't trying to pull a fast one.
But ultimately if the surveyor has valued it low then even if you put it back on the market, the asking price will need to reflect this otherwise you will keep having this problem.
TBH if this is a down-valuing another lender is likely to come back with the same value; most mortgage providers in the UK use the same company to value, and another lender may actually just send out the same person who did the first valuation!
We were in a similar situation but for a lesser value.
House we were buying- on the market for £220k. We offered £200k.
House we were selling-£180k. We were offered £175k.
Survey on our house valued it at £173k. Lenders refused to lend additional £2k. EA spoke to our vendors and the agreed to accept revised offer of £198. It helped that we were selling and buying through the same EA - so they knew the full story. Also the owner of the house we were buying had passed away and was being sold by three relatives-the £2k loss wasn't a big loss to swallow. Not sure what your situation is though- are with with the same estate agent?
What is your vendor's position? If I were your vendor, with a survey already done saying the offer I'd accepted was a fair reflection of the value, I wouldn't be accepting a drop or discount at this stage, unless I was desperate to sell.
It depends entirely on your specific chain.
Is there anyone above your vendor? Are they in a rush to sell?
If the answer to either of these is no then you won't stand much chance of getting a price reduction.
As others have said, putting your house back on the market might just result in you ending up in exactly the same situation with the next prospective buyer.
Put your house back on the market and instruct the agent not to accept any viewing appointments from people with a mortgage from the same lender as your failed buyers. One particular bank's surveyors were notorious in our area (SW12) for having not a clue what the current value was. We had to black ball anyone with that bank in our sale. Property sold again the following day and valuation not a problem at all for the alternative bank/surveyor.
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