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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

To want to know the value of a property before I offer on it?

54 replies

Chester1980 · 19/05/2020 10:26

I live in Scotland, where you can see a Home Report which tells you the market value of a property before you out in an offer. I am interesting in a property in England where I hope to move. The property has been on the market for 6 months.

This property guide price seems to be waaaay over what I would expect (based on sold prices in the area and its condition). It seems so risky to invest your time and hope into putting in an offer when you don’t get an official value until the mortgage company send someone who is independent to look at it. The guide price can be based on the owner, who clearly is a little unrealistic about it.

Do you put in what seems like a silly offer (although is more realistic to value)....or a higher offer and try and negotiate it down following the mortgage valuation? By then you’re so heavily invested it seems crazy!

OP posts:
Noodledoodledoo · 19/05/2020 17:10

Depends on area we bought ours in 2013 and it is now worth according to zoopla and next door which is smaller but has been done up, 50% more than we paid for it.

So using 2015 as a guide may well be very misleading. Ask the estate agents if they think it is valued reasonably

titchy · 19/05/2020 17:19

You definitely don’t attempt to negotiate down after mortgage valuation

Why on earth not?

OP offer what you think it's worth based on what you've said. They accept it, great. They don't, then youve lost nothing. Sounds like they're not motivated to move though.

Hingeandbracket · 19/05/2020 17:28

OP - you can get a rough valuation from Zoopla.

as for
In the same area you can get detached houses which don’t require modernisation for the same price. But they go quite quickly.
Probably better to wait for one of those to come up.

Chester1980 · 19/05/2020 19:43

Thanks all. I don’t trust Zoopla. I know that the valuations are way over for the property I live in right now. It won’t consider the state of the property either. I’d be interested to see how they calculate their values....I’ll have a look

OP posts:
Grumpylockeddownwoman · 19/05/2020 20:21

@titchy I did try to clarify what I meant upthread. What I meant was don’t rely on a downvaluation as a strategy. Of course if the mortgage valuation comes in lower you can try and negotiate but it may well not.

monkeysox · 19/05/2020 20:34

Probably more normal to knock 10% off asking price as staring offer

Monkeynuts18 · 19/05/2020 20:51

Isn’t it relatively uncommon for mortgage valuations to come in way under the asking price and offer? Obviously I know it happens, but my experience of mortgage valuations is that they’re basically just to check that the price isn’t totally ridiculous and the house isn’t worth less than the value of the loan the bank is giving - they’re not a detailed valuation. They don’t care if you’re overpaying to some degree, they just want to ensure that there’s enough there to recover their loan if necessary. They don’t care if you lose your equity, obviously.

Offer what you’re prepared to pay. If the valuation does come in lower you can revise your offer (although as a PP says, don’t rely on that as a strategy).

If I’ve understood correctly, it sounds like the downside of the Scottish system is that you’ve got to shell out loads of money before knowing whether or not your offer’s even been accepted by the vendor?

Frankola · 19/05/2020 21:15

They sound like they want a specific amount and arent too motivated to sell.

Have a conversation with the estate agent.

We once fell in love with a house and wanted to put an offer in and the estate agent told us they were waiting on for a specific amount but the house wasnt actually worth that, so when it came to surveyor etc there would be a difficult conversation...

That made our decision easy. We looked at other houses

StealthMama · 19/05/2020 21:27

The mortgage valuation is done purely for the mortgage company to confirm its worth at least the amount you want to borrow, so that they can reclaim their risk if you stop paying. They use the Halifax guide which sometimes doesn't even warrant anyone going I the house to see it.

If you want an actual surveyor to give you a full survey and valuation then you need to pay for that after you have agreed an offer to gain access to the home. It's not unusual for renegotiations to take place after that but not based on x house sold for x 5 years ago , but on the actual condition of the home.

StealthMama · 19/05/2020 21:31

And bare in mind it has already been valued, by the estate agents. Yes they will try to achieve maximum price but they know the area, the condition, and what the local market is doing. If you however think it's worth less, then offer less.

agonyauntie2020 · 20/05/2020 06:49

Can't believe no-one yet has mentioned COVID - surely the house is not worth, and they don't expect to get, what it was before the current pandemic?

Am I the only one who thinks prices will drop and there will be some sort of recession? What are you willing to pay (and what are they willing to accept) today???

RhymingRabbit3 · 20/05/2020 06:53

@agonyauntie2020 at the moment house prices havent changed, why would they drop the price now because prices might drop in the future? Surely thats exactly the sort of thing which will cause a drop?

It was so nice to have a thread where nobody mentioned covid for a while....

3rdNamechange · 20/05/2020 06:55

Have you looked on the house prices index ?

cochineal7 · 20/05/2020 07:10

There is no such thing as an established value of a house so not sure what you are looking for. Mortgage valuation is, as people have explained above, purely for banks to assess risk of non recovery of the loan. Estate agent valuation is to aid seller. And you as buyer take your own information on board when making an offer. A bank’s mortgage valuation is not necessarily very helpful as they don’t have more information than you do and their purpose is different. Look at valuation for insurance purposes: again completely different (Rebuild costs are probably a lot lower than resale value). What you should do is either walk away or offer what You think is reasonable based on your research. Prices in 2015 are not very current but look at the curve of how things evolved since then. If you make an offer and it’s accepted the most important people to get in are a proper home surveyor to check that there are no major structural defects and if older property I would also always do electrical survey. Now if either of those flag up major issues you either walk (run) away or renegotiate.

TitianaTitsling · 20/05/2020 07:14

Agree rabbit ! Op am following as also currently in Scotland and considering moving down south but not sure how it all works!

pilates · 20/05/2020 07:24

“You definitely don’t attempt to negotiate down after mortgage valuation“

Strongly disagree. It is an ideal opportunity to negotiate a price reduction if it’s down valued.

JumpingAtJackdaws · 20/05/2020 07:42

You seem to be over thinking this. Just offer what you're willing to pay. Any property is only worth what a buyer will pay. The sellers may have unrealistic expectations but that's their prerogative. We've come across that type when buying previously, even when offering close to the asking price, and have seen those properties languish on the market for months/years. If they have a fixed idea about what they will accept, you telling them it isn't worth that is unlikely to influence their thinking.

SpringFan · 20/05/2020 08:39

Op. You said you don't trust Zoopla . My understanding is that the sold for prices on other properties are actual prices from Land Registry, but I may have misunderstood what you meant
Also on Nationwide building society website there is a tool where you can put in the Region and the price paid in whichever month in 2015 and it gives a rough guide to current price. It doesn't take into account condition etc but will give you a clue if you are right about it being overpriced by 90k

alittlerespectgoesalongway · 20/05/2020 20:57

A property is worth what someone is willing to pay. There is no other real way to judge.

Chester1980 · 20/05/2020 22:48

Hi @Monkeynuts18. That’s not the case for the Scottish system. The seller has to pay for the Home Report which has the value in it. So you know the value without having to pay anything. You then add a note of interest in the property. Once they have several notes of interest it goes to a closing date, and you put in your best offer. It’s not as easy to then pull out as it is in England if you’re offer is accepted.

The downside is that it means you can lose out and don’t get a second chance to put in an offer. It means prices can go way over the value if there’s a lot of interest.

To be honest, it’s part of the reason for moving to England. We don’t stand a chance of getting a house in a half decent school catchment in this competitive market (Edinburgh city).

OP posts:
EveryDayIsADuvetDay · 20/05/2020 22:55

Make the offer, nothing to lose.
If rejected, look for a house that you can afford.

Lolapusht · 20/05/2020 23:51

If you’re used to buying in Scotland, a few things to bear in mind when buying in england...estate agents are separate to solicitors and can be a total nightmare. If you get a good one they can make the whole process go smoothly, keep chains together (will get into that in a second!) and generally make everything work. If you get a bad one, they will make everything infuriating and can cause all sorts of issues.

The process is basically the same between the two systems but with the major difference that the point at which the parties are legally bound is significantly different. Up the road, you conclude your missives then set your date of entry for 4-6 weeks later and the concluding part is done as quickly as possible. Once you’ve concluded that’s you bound (remedies are available to both parties if the other sides fails to carry out their obligations). Down south, you do all the to-ing and fro-ing (ie concluding) then when everyone is ready you exchange contracts with an agreed completion date (date of entry) which is usually 1-2 weeks later than exchange. Until you have exchanged, no-one is legally bound so you could have your offer accepted, spend 6-8 weeks getting surveys/mortgages/legal work done assuming you will be moving “toward the end of X month” then find that your seller has changed their mind or someone further down the chain can’t get finance etc and no-one is moving and you’re back to square one without a house. You also won’t have a definite moving date until you’ve exchanged so you may have 1 week to get packed, arrange removals etc. You may find it difficult to tie-in a Scottish sale and an English purchase (there will no doubt be someone along soon to say they’ve done it several times without an issue!)because of the time differences in the system added to the fact you won’t have a definite moving in date until a week before you’re due to move. A lot of uncertainty!

Find out if there’s a chain. You might have a first time buyer living in rented accommodation (good, but may need to give 4 weeks notice which may cause problems further up the chain), buying from Mr Flat Owner, who’s buying from Mr & Mrs Getting Divorced who are buying two separate properties, who are buying a new build. This is where your estate agent comes in. You need to have someone who can regularly check on progress and make sure that what everyone has said their circumstances are is actually the case. You’d be amazed how often someone doesn’t actually have finance in place, or they decide they aren’t going to move into rented accommodation and want to buy somewhere and have started looking (add 12 weeks to your timeline). If you’ve got a long chain there can be all sorts of problems. On completion day (moving day) bottom of the chain have to get their money to next up the chain, who then has to wait for it to clear before they can pass it on etc. If someone’s funds are delayed you can run out of time on completion day to get money to the top of the chain which means someone may not be able to move.

You need to have 10% of the purchase price available in cash as a deposit. This needs to be held by your solicitor/conveyancer before they can exchange. Once you have exchanged, should you fail to complete then the seller is entitled to keep your deposit.

The onus is on you as purchaser to ask questions. The standard conditions used in Scotland cover things like central heating being operable, in England it’s on you to have it checked by an engineer if you want to know for sure if it’s working properly. You will get a Property Information Form which details most things about the property and is completed by the seller. The information it contains can be relied upon by you. If the seller fails to mention something you are entitled to a remedy, but you’d have to pursue it through court which may not be worth it. Caveat emptor! We found our conveyancer was very much reactive rather than explaining things eg when we asked about say, access they’d say “You’ll need to check and make sure you’re happy” (they were a bit shit!).

Be careful who you use to do the conveyancing work. Solicitors generally look more expensive but bulk conveyancer will have lots of charges that aren’t always obvious. You can have solicitors, licensed conveyancers or legally unqualified case handlers who are “supervised” by a qualified solicitor (somewhere within in company). You can get brilliant people in each and also terrible conveyancers. The bulk conveyancing companies tend to be target driven, have “standard” ways of doing conveyancing and your case handler may not be experienced enough to pick up timebombs that will cause you problems when you come to sell! Don’t go for the cheapest quote or web reviews as these tend to be 5 or 1 *. Ask for recommendations from the estate agent and anyone else you may know locally.

Think those are the major differences...oh and DON’T buy a leaseold property!!!

Keepyourginup · 21/05/2020 00:23

You definitely don’t attempt to negotiate down after mortgage valuation

This completely depends! Last time we sold a house we made it clear to the buyer than the offer we accepted was the price - no negotiation at survey. When we purchased a house a few years earlier, we did negotiate after survey. So each case can be different and depends how desperate buyers are to buy and sellers are to sell.

Chester1980 · 21/05/2020 10:58

@Keepyourginup I guess that’s a way to think of it in a business transaction. I do think that if the survey shows something that will cost the buyer a significant sum, then the price should be renegotiated. It’s like being mis-sold a product. If you bought something from a shop and it was faulty, you wouldn’t accept it, would you?

OP posts:
Chester1980 · 21/05/2020 11:01

@Lolapusht some great advice there - thank you for taking the time to write that. In terms of a chain, I would be tempted to sell here, move into rented and go from there, to limit the chances of being stuck. I would need to check the difference in rental agreements north and south of the border first though...as I know up here you can give one months notice.

OP posts: