Mortgage value less than offer price for house

[Aj2612]

WWYD? Any tips please? We had an offer accepted (asking price) of £300,000. Mortgage valuer have said the house is valued at £265,000 (based on vendors purchase price of £197,000 in April 2017 - they’ve put new kitchen & bathroom in). I don’t have the £35,000 cash to fill the deficit between what the estate agent advertised it for and what our mortgage provider valued it at. I’m waiting for the results of our home buyers report and that should include a property valuation. I’ve asked the vendors agent if they will consider negotiating over the price due to the considerable difference in price but they want to see my homebuyer report findings first?! Please help! TYIA

[FluffyWuffy100]

It’s fair enough they want to see the Val in the homebuyer. If that comes back in a similar ballpark they might be happy to love. If you’re not in a position to put any extra cash in you’re in an easy position. They move on price or you can’t proceed. Simple!

[Aj2612]

Sall74 don’t comment if you’re going to be so personal

[twinone]

If you can't afford anymore than the mortgage, walk away.

Out current house was valued at £135k less than we had offered, much to the vendors disgust.
She got a different surveyor in to value it for her and she reluctantly agreed to accepting the lower offer.

If you have that valuation, I'm guessing other interested parties would be given the same or similar value. The vendor needs to realise their property is overvalued.

[SkyIsTooHigh]

Hassle the surveyor. They may give you a quick answer over the phone before the report is complete - no harm in asking - and they tend to be more forthcoming on the phone than in the report anyway.

Do you genuinely think it is worth £300k? That sort of uplift should be ringing alarm bells tbh unless you are in some amazing property hotspot, and I'd be wanting some assurance that it's worth the extra 65k let alone 100k. I would be looking yourself for SOLD prices, not advertised prices but the actual prices paid, of similar properties sold recently. When you say they've done the kitchen do you mean they've put a massive living kitchen diner extension thing on the back? If they've just refitted to existing footprint I would be worrying. The other option is they somehow underpaid eg because they were buying it from a family member or there were structural issues that they put right. Again you'd need to find evidence to support that assertion.

[Worldsworstcook]

Sorry OP I'm with Sal!

That's a hell of an increase unless by new kitchen they've extended and a new bathroom, no matter how fancy, can't justify such a massive hike.

[Worldsworstcook]

Did t read the gullible bit - I know you like the house. Not gullible just very very excited!

[Quodlibet]

That's a ridiculous price increase in 9 months. The house is most likely over valued, I agree with PP.

[Buglife]

Honestly a new kitchen and bathroom can not possibly add that much value to a house, and I can’t imagine where in the country has seen house prices go up so much! If you can’t afford it walk away. And I’d be completely wary of buying a house I was worried wouldn’t sell for as much as if bought it for which could well happen if it’s that overvalued. Was that the asking price or did you offer more to get it?

[JackieReacher]

do you have comparables which justify that price? similar local properties with a price that justifies the £300k price? The vendors could of course have got the most incredible bargain when they bought, but to persuade the surveyor of that you need to justify £300k in current market for the area.
Otherwise, you have to walk if the vendors don't drop the price, as you're no longer able to afford it. They should be aware that they will come up wtih this issue with any purchaser who has a mortgage lender, and may agree to drop the price.

[Oooocrikeyitscold]

The valuation is there to protect you and the bank. I would walk away, chances are you’ll be in negative equity (dependent on deposit).

[Oooocrikeyitscold]

Ps or I’d renegotiation strongly

[greendale17]

£103k or 52% increase in less than a year with just a new kitchen and bathroom to try and justify it?

^I completely agree. The house is overpriced. Why would you want to pay more for it than it is worth?

[LoveProsecco]

Sorry OP but alarm bells are ringing!

How long has it been on the market?

[Lilmisskittykat]

I've been the other side of this as the vendor... got offered just under asking got down valued by the surveyor.

She couldn't meet halfway so we had to go back to market ...nervous of the valuation issue.

Got another decent offer, surveyed this time by a guy who knew our area well - no issues with valuation so second time around as it sailed through - go figure. Can only assume the first buyer by their own admission only had the 5% deposit so mortgage company wanted worse case valuation

Strangest thing but tell you what wrecked my nerves.

[TrueBlueYorkshire]

You can't really spend more than about £15K on a kitchen so sounds overpriced.

I added 55K on a house in one year once, but i full re-plastered inside, fixed all the damp problems, fixed basement drainage, re-did the back garden completely and re-tiled the kitchen and bathrooms, and changed all internal doors/frames/skirting.

Was probably about £8K materials + stamp duty + interest payments, and ~1000 hours of my own work over a 6 month period. Made a good second job over the winter to keep me busy, but by no means a dawdle! This was in a very desirable area too that had a lot of retirees who didn't want to do the work themselves.

Even in London you couldn't add that much without doing some fantastic amount of work!

[woodchuckchuck]

OP I'd pull out. Rate increases and falling house prices are the talk of the moment so might be best to wait a while or you'll be in negative equity immediately and for a long long time.

[heron98]

We had this happen and pulled out because we couldn't afford it otherwise.

[BewareOfDragons]

I would pull out. It sounds grossly overpriced. They've only owned the house for 9 months, redid the bathroom and kitchen, and want over £100k more than they paid for it? Sorry, but no way did that amount of work alone add that much to the value of the house.

[QuiteLikely5]

Some agents do this to appease the homeowner and get their business!

Blame the agent

[Scribblegirl]

We bought our flat in July 2016 for £265,000 and have spent £30k completely gutting it - new kitchen, bathroom, replaster, rewire, new floors in the entire place etc. It's now worth £325,000 (not that it would shift at the moment, the market's completely stalled). Agree that an uplift of £100k in less than a year sounds ridiculous for just a new bathroom and kitchen. I'd walk away.

[Xascha]

i'm just adding my 'how much?' to the conversation, surprised you had your hands left - that is a HUUUUGE increase! what are other houses in the area priced at?

We had an offer accepted (asking price) of £300,000. Mortgage valuer have said the house is valued at £265,000 (based on vendors purchase price of £197,000 in April 2017 - they’ve put new kitchen & bathroom in).

[Xascha]

as you're either new or nc you could share the link and some mn-ers that know what they are talking about could help out?

[MrsJoshDun]

I pulled out many years ago in a similar situation. Offered 28k. Valuation came back at 11k. Work needed doing and vendor offered to do work if I would still pay 28k, I think he thought it would then be valued higher. I was very scared by the thought of owning an 11k house and ran like the wind.

[Willswife]

It wasn't overpriced by the agent, you offered 300k so it was obviously worth it to you. All that's happened is the lender doesn't agree.

You can try another lender, renegotiate or withdraw. We changed lender when we bought out house (better rate) and there was a variation of £65k between the two surveyors.

You obviously viewed the house and thought it was worth 300k, so you know if the 197 was market value at the time it was it purchased as an undervalue i.e. Inter family purchase at a reduced price?