advice on renegotiating after survey

[titchypumpkin]

Does anyone have any experience of renegotiating the agreed price after the survey has come back?

Background is we are buying a house in a sought after area of the city we live in (not SE), they don't come up very often. When we viewed it was clear it needed some degree of work (we were thinking new bathroom, carpets, replastering and as it's an old house some inevitable minor niggles and DIY etc).

There were several offers so the agreed price was £10k over the original asking price. Let's say for example it was on for £300k and we finally agreed to pay £310k.

So, the survey has come back and:

1. The house needs more work than we thought, nothing catastrophic but there is some woodworm, roof needs attention, inadequate ventilation of the roof/floors, etc, and
2. The valuation is £20k under what we've agreed (so £290k)

Now, we could just about stretch to proceeding as we are, but a) it would use up our savings and b) i don't really see why the vendor should get £20k more than it's worth.

Now I know valuations are based on the house in its current condition, so we can't ask for money off for the work and the down-valuation, but would we be reasonable in asking for the price to be reduced to the original asking price, so £300k?

This seems fair to us, as the vendor still gets their asking price and we split the down-valuation between us? We just don't want the vendor to pull out as we love the house

Anyone think it would be a bad idea to renegotiate?

Sorry that was really longwinded!!

negotiate away - this is a business decision, not a matter of manners!

you are willing to pay what you are willing to pay. So offer that, with your justification. They take it or leave it.

good luck.

Thank you for the reply, I think you've hit the nail on the head, we're so keen not to be seen as trying it on that we're almost too polite to ask.

I'm guessing the worst that can happen is they say no and we proceed as we are. Surely no seller would ditch buyers just for asking??

The vendor's unlikely to pull out just because you've asked but may say no so you'll have to be prepared for that.

If they had several offers they may call your bluff and say they are putting it back on the market straight away - depends where you are buying too. We did this with our buyer a few years ago but they were clearly pissed off at the price they were paying because two people wanted it at the same time and had it in mind to renegotiate from the start.

If they say no I think we will still proceed we'll just feel they're being a bit greedy/unreasonable.

It's rented and they've given notice to their tenants, and we're in rented and ready to go so we are good buyers.

I'd hate them to think we're being cheeky and just trying it on, if the survey had said it was worth the asking price and there hadn't been all the extra work we'd happily have carried on paying our original offer.

the other offer they had was the asking price, we were warned when we offered £10k over that it would likely go to best and final but it didn't so we're guessing the other buyers weren't prepared to pay over. So even if they remarket it they likely won't get more than the asking price, and then the new buyers might try and get the price reduced if their survey reveals everything ours has.

it's just ridiculous that we're dithering whether to overpay for a house by £20k just so as not to seem rude

Do you need a mortgage? If so you'll struggle to get one if you pay more than the valuation says it's worth.

I had a similar situation earlier this year and walked away from the deal as although a cash buyer it would be foolish to pay that much more than a valuation as there are insurance implications too, for you as the new owner.

Those poor souls on the Somerset levels reminded me of the importance of insurance for homeowners, and awful as it sounds the LAST thing you'd want after a house fire is grief when putting in a claim because you'd been fool enough to pay MORE than your house is worth.

We have found another house - not as nice as the one we walked away from (that was my dream home the one we are buying is just a very nice one iykwim). However I've got peace of mind that it can be easily insured, resold etc without any ishooos.

If you're in rented you're in a great position. You knew you were paying over the odds but not that much.
I'd have a frank and honest discussion with the EA and explain the reasons for the reduced valuation. I'd offer 20K less and explain you're prepared to move quickly. They might offer to split it 50/50, would you be happy with that?

It is a business arrangement and they may have other buyers interested if you want to reduce the offer. They would not be greedy to ask what someone is willing to pay for it. The mortgage valuation you had would be a cautious valuation anyway. You could discuss the issues with the vendor and see how amenable they are to reducing a bit but in the end they are in the stronger position. If you don't want to pay the money then pull out. Back to square one in a rising market.

Yes we do need a mortgage but we have a big deposit so it won't affect what the lender is prepared to lend.

It won't affect insurance either as the rebuild cost is much lower than the mortgage vaulation anyway.

It's so tricky. I'm thinking we need to bite the bullet and broach it with the EA and take it from there...

Yes we'd be happy to split it 50/50, that's our thinking about reducing our offer by £10k, after all they'll still end up with their asking price just not the extra over that they were expecting.

Our solicitor says it's not unusual for there to be some renegotiation after a survey. We're just never faced this before, the last house we owned (similar aged house) didn't raise anything unexpected and the valuation was identical to the agreed price (this was 2009).

You are, of course, assuming that the valuation is correct . Surely this depends upon scarcity of houses on the market in this area and whether they command a premium or not. £20k under the market price is not that much and did the surveyor really know the area and the property market there?

Also you can never assume that an old house will just need a bit of DIY. It is rarely the case if it needs a new bathroom, kitchen etc. This also shows no-one has really cared for the house over a number of years so it will have problems coming to the fore. I would see if you can get it down to £300k but if this house rarely appears on the market and the market is buoyant, it may be the vendors will put it back on the market. Do you know how much the renovations will cost? This should be your starting point for negotiations. Is the surveyor suggesting £30k?

The survey value is only the opinion of that one person, go to someone else and you would get a different answer...