Our house has been hugely down valued is there anything we can do?

[FannyGlum]

We sold our house privately, and accepted an offer £5k under the price valued by 3 different estate agents. We've had an offer accepted on a property, everything was moving well, searches done etc.

Now our buyers have come back saying that their lender's valuation values the house at 15k under the agreed sale price. They can't afford to make up the short fall and we can't afford to drop by that much. Also I disagree with the valuation, we had 3 Estate agents value it, I've done a zoopla valuation and I've looked at recent sales. There are are other sales on our road, but they have one fewer bedroom, no garden and are terraces not semi detached.

Is there anything we can do except put house back on market? In doing so I think we will lose our purchase, as they have already lost a sale once and are desperate to complete (already moved out, living in rented)

[MrsSparkles]

Can you speak to your sellers to see if you can reduce the price along the chain? I've heard of this happening and whoever's at the top accepting a reduction in return for it not collapsing? Maybe not for the full amount but there may be some rom for negotiation>

[ElsieMc]

Well I have just entered my own house on Nationwide and it valued it at £316,000 when two neighbours have sold at £465,000 and £435,000 on asking prices of £499,000 within the last two years. Guess my will sell fast then!

The reality is that a house is only worth what someone will pay, but I agree with those who say that the surveyor has erred on the side of conservative here as surely they would have local information to hand here.

This is pretty worrying for all concerned here as if the valuation is not challenged, there will be a lot of property chains going down the pan unless of course every single person in the chain agrees to drop their price!

We sold an old cottage for £125,000 around twenty years ago and the valuation was £115,000 but the buyers would not show us the valuation. We put it back on the market and I was present when the surveyor went round this time and he told me there and then that it would "value up".

[wowfudge]

Ethereal are several references to Zoopla valuations on this thread. Unfortunately Zoopla is notoriously unreliable as home owners can manipulate the values. Best to look at the actual Land Registry website data or Rightmove sold prices which reflect that data, albeit after two to three months usually.

[bilbodog]

Suggest your buyers go to an independent financial adviser who will be able to get mortgage quotes from many different lenders whereas a bank can only offer the products they have access to. This way they may get a better mortgage deal and different valuation. Other way is to see if the whole chain can reduce their prices - i have known this to work and sometimes the estate agents will chip in to make the chain work. Good luck.

[FannyGlum]

I have seen proof yes, and I trust them as they are family friends. They also know that we don't have much budging room so we will have to drop out if there is no change.

Their bank have said they can appeal, but will not accept an independent valuation. My point is not so much that it is lower, but so much lower. There isn't anything comparable that has sold in the last 3 months near by. Either it has off road parking and therefore is slightly more (than our price) or has fewer bedrooms/no garden and is closer to the surveyor valuation.

I found out it happened to a friend and they appealed and the shortfall was made smaller to they met in the middle to cover it. Then the buyer dropped out. Another lender valued it as only £3k under price. That's a big difference!

[ThroughThickAndThin01]

Estate agents might overvalue in a rising market, when if something doesn't sell then the price will catch up. They dont overvalue in a stagnant market, there's no point spending time and money marketing a property which has no hope of selling.

[HolaWeenie]

Both statements are correct, surveyors undervalue and estate agents overvalue, homebuyers beware!

[BackforGood]

I think we can all agree that estate agents are "optimistic" in their valuations.... in a "If you are lucky and the right buyers come along" type way and surveyors need to be conservative and consider "if the mortgage were defaulted on and the lenders wanted to sell quickly, what could they get in a poor market"

Neither profession needs to be criticised, it's just looking at things from a different angle - not, of course, that that helps OP or others in this situation.

[Betty4321]

"Surveyors are notorious for undervaluing"

I think you will find its the other way round with estate agents notorious for overvaluing. Estate agents overvalue to get your business, surveyors have a duty to price correctly to protect the lender.

[HolaWeenie]

Surveyors are notorious for undervaluing, if your buyers were to default and their mortgage company had to repossess and couldn't achieve the £145k price tag, they would go after the surveyor.

Have you been shown proof of the surveyors valuation!? They could be doing this to get you to knock down the price.

Do you have the funds to have a surveyor of your choice survey and value the property?

[RoganJosh]

Looking at zoopla, my bit of Yorkshire is up 22% on ten years ago and up 19% on five years ago. I don't think it dramatically rose from 2006-2007 so around here I think on average house prices have gone up.
I do wonder if your valuation might be wrong.

[Bringiton2016]

I've just put my details into the nationwide calculator and it is far far less than our valuation last month!

[FannyGlum]

That is one of the options we will put to buyers. Think we might invite them round to chat.

Hindsight is a wonderful thing but I so wish we hadn't bought a house when we did.

[RoganJosh]

*had

[RoganJosh]

I've had a friend in your situation, well you buyers' situation.
She has to find a new lender, first ensuring that they didn't use the same surveyors.

[FannyGlum]

Thanks namechange. Depressing to think we might be stuck here. Ah well, we have a house I suppose which is more than most of the world.

[FannyGlum]

I believe our buyers. One of them I taught in the sixth form and she used to babysit for us. I trust her with my kids!

Right think we need to have a chat with them and sort this out. How likely are the lenders to accept another independent valuation?

[namechangedtoday15]

This is what many lenders will use as a guide

Nationwide house price calculator

It is very arbitary but its used quite extensively by lots of lenders (not just Nationwide). I've just put £145,000 into it for Quarter 4 in 2007 and it says the current value is £134,403. I think too that the money you've spent on it will not necessarily have added value as far as a surveyor is concerned.

Like others have said, if your buyers want to challenge it / go with a different lender they can and you might get a different result.

[Bringiton2016]

I don't understand it either. Round here our type of house is going for a minimum of 180k, zoopla says 190k. We've just changed our mortgage and the valuation is 160k. The lenders take it from RICS I believe, and they are always lower. I noticed this when applying for buildings insurance etc.

[notagiraffe]

Generally, has the market fallen or been static in your area?

If you bought it for £145k and have spent 20K on it, it seems hard to believe it has dropped that much in value. I'd hold out for the agreed price. Our buyers did similar, and massively dropped the offer when we were on the brink of exchanging. We lost the house we wanted because of this, but we held out and in the end, they paid the agreed price and the house we got instead is so much nicer than the original one we'd fallen for.

If the market is dropping, that should be in your favour while you look. Let the people you want to buy from know what's happened though.

[FannyGlum]

Decor etc was all the same. I'll have a look for a floor plan. In fact it was almost 9 years ago as it was 2007. We are in Yorkshire. Thing is I don't even care about making money, we've spent over £20k on house- complete new double glazing, front door, new boiler, all new radiators, new kitchen and bathroom etc.

I just want a family house that fits us in. I realise you're all probably harder property tycoon types. If it is what it is we'll have to make do. But I'm gutted.

[namechangedtoday15]

Whereabouts are you Fanny? 8 years ago was 2008 when prices were probably at their peak. Some places are not back to 2007/2008 levels yet.

How big is the extension of the other house? Is it online? Can you see a floorplan and if so, work out a price per square metre and see what your house would be worth at a similar price per square metre. Was it the same in all other respects (internal decor, garden, outlook, maintenance etc)?

[FannyGlum]

We bought it 8 years ago for 145k. So if the real value is 130, we've got 5+ years living here.

[FannyGlum]

We did briefly have it on the market with one agent. Then Dh job situation changed so took it off. In the meantime a friend contacted me about their daughter looking to buy.

A house on our road, the same as us with a single storey extension added sold for 160k 18 months ago.

Oh god. If the valuation is right, then we can't move and we are stuck here. Which makes me cry. We needed a spare room for visiting grandparents amongst other things. Our kids on see them a few times a year as hotel prices are too much.

[namechangedtoday15]

I think estate agents will have over egged the valuation and been over optimistic simply to get your business. Did you tell them you were putting it on the market (rather than selling privately?) they'll have been saying what you wanted to hear so you'd choose them and they'd get their commission.

I think the bank's valuation, albeit probably conservative, is likely to be closer to the value that estate agent's "valuations". You say 3 estate agents "all valued at putting it on the market at £150k" - but the £150k is only an asking price, not a valuation.

Have you looked at completed sales? How much have you added on for the extra bedroom and being semi detached? It might be that the "value" of those extras in your price bracket / location / target market doesn't really add much.