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Property/DIY

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Original poster

Valuation is lower than offer, what on earth do we do?

62 replies

Grantaire · 30/09/2016 11:55

We need to move and quickly. We are trying to work towards a exchange date of October 17th.

The house we're buying was marketed as 180-185k and we offered 180 which was accepted. Valuation is 170k.

The mortgage dude says our options are to put down more of a deposit to retain our LTV, continue and move an LTV bracket which has quite an impact on repayments or go back to the vendor and ask them to drop the price.

I am in such a tizz. This has been the most stressful time for lots of reasons and our house move has to happen for myriad reasons. I don't want to be a fool though. We've sold our house, everything was progressing well without a hitch thus far, but I'm really worried it's all going to fall through. Do we leave it to our estate agent to renegotiate? Would a sensible vendor agree to renegotiate? I'm not a chancer, we want to pay a fair price for the property and we're trying hard to make this as smooth and reasonable as possible.

I've never been in this situation before so I don't know what to do.

OP posts:

SolomanDaisy · 30/09/2016 14:22

I think renegotiate with the seller and at the same time view the new house that's just come on the market.

Chickoletta · 30/09/2016 14:26

I don't really understand what the issue is here. Renegotiate price - nobody can realistically expect someone to pay more for a house than a surveyor says it's worth! The vendors don't really have a choice but to agree and you're 10k up on the deal - I'd be celebrating!

Original poster

Grantaire · 30/09/2016 14:36

The issue Chick is that the vendor doesn't have to renegotiate. They can say it's offer price or nothing. A house is only worth what somebody will pay for it and if they think somebody else will pay 180k, they'll pull out.

There's nothing to celebrate sadly.

OP posts:

KarmaNoMore · 30/09/2016 14:38

This reply has been deleted

Message withdrawn at poster's request.

Original poster

Grantaire · 30/09/2016 14:44

There's a difference between an estate agent and a surveyor though. An estate agent wants your business, the surveyor is working for the bank I suppose and protecting your investment.

The area isn't super desirable at all. Just nicer than where we live and property sells okay there.

And looking at sold prices, yes the valuation is right.

OP posts:

gillybeanz · 30/09/2016 15:32

OP, there are plenty on here who say they wouldn't pay more than the surveyors valuation, myself included.

I think the vendor would be mad not to take the valuation price.
They don't know that the next 5 people who are interested would offer over the surveyors valuation, they could be stuck forever.
You are in a good place honestly.

KarmaNoMore · 30/09/2016 15:35

This reply has been deleted

Message withdrawn at poster's request.

KarmaNoMore · 30/09/2016 15:37

This reply has been deleted

Message withdrawn at poster's request.

YelloDraw · 30/09/2016 15:57

You are in a good place honestly

I agree.

First line is you don't have additional cash to put towards the purchase and to try and negotiate the price down to the surveyors valuation.

HuckleberryGin · 30/09/2016 15:59

This happened to us when we sold our house- our buyers valuation was £10k under agreed price. We couldn't lower price and sill move (we wouldn't have been able to buy anything else) and they didn't have enough to prop it up. So the sale fell through. A month later we sold again for £15k more than original AGREED price. Different building society, different valuation, everything was fine.

We did appeal the first valuation and we had to submit 3 houses that had sold within 1 mile radius in last 3 months. But it failed. The valuation was by Santander.

So actually your vendor could pull out and sell to someone else with a different bank and get a different valuation.

Original poster

Grantaire · 30/09/2016 16:44

I agree about the madness of valuations in general. We had a massive range of valuations at the point of going on the market. However, the bottom line is that it's been down valued at the point of sale and we're not in a position to cope with the LTV change. The estate agent has gone horribly quiet on us.

We're fucked, I just know it. DH is buggering off to Afghanistan on deployment in a few short weeks and DS's school situation is becoming impossible. I feel foolish for pinning any hopes on this situation being straightforward. I feel nothing short of trapped.

OP posts:

itlypocerka · 30/09/2016 19:16

Go to a mortgage broker and explain the situation. They should be able to get you a different mortgage deal, possibly with a fresh valuation, that meets what you need.

missyB1 · 30/09/2016 19:22

The valuation could be wrong.

We were in exactly the same situation in the summer when we were buying our house. So we went to a different mortgage company and they valued it at the price we had agreed to pay. We didn't try to renegotiate as we knew it was worth that price and someone else lose would snap it up if we didn't.

Joinourclub · 30/09/2016 19:23

Why not offer 180 for the better neighbouring house?

Coconutty · 30/09/2016 19:26

This reply has been deleted

Message withdrawn at poster's request.

crayfish · 30/09/2016 19:31

I'm in Scotland and it's a pain to be a vendor here because you pay for the home report and the valuation, but it's good to be a buyer because it avoids this situation because a buyer can see the valuation before they even view the property. It's so annoying in your situation because you basically made an offer 'blind'.

Yes there is the issue of 'worth' in terms of what somebody will pay the seller, but for the buyer (you) it's about how much your bank will give you, so what the survey says it's worth is what matters.

You are not fucked, but you do have to hold your nerve and ultimately decide if this house is worth finding an extra ten grand for out of your own pocket.

CrazyNameCrazyGuy · 30/09/2016 19:32

A house just down the road which is exactly the same age, built at the same time but has an extension and is in better decorative repair with a new kitchen has just gone on for 185k.

I'd buy that one instead ...

QuiteLikely5 · 30/09/2016 19:33

I'm assuming the owners are aware of the valuation? If not let the EA know your new position and ask them what they can do to help the situation. Explain you were not prepared for this and only have a few grand extra in savings to accommodate the change in LTV ratio.

If they have other sales depending upon this one they will work hard on your behalf.

If you tell them you have the funds to still make the full offer then you are screwed - they will basically act in their own interest and encourage you to offer full price!

Original poster

Grantaire · 30/09/2016 21:20

We have told the EA and been honest that we need to renegotiate. No word from them.

I don't want to buy the other house. It's been utterly modernised and they've knocked out walls and the soul. This house is the right level of project for our skills and time is not on our side either. The lost time would cause all sorts of problems.

OP posts:

anotherdayanothersquabble · 01/10/2016 09:24

What a stressful situation.

Take both approaches advised about. You gave already told the estate agent that you cannot afford to pay the extra £10k that the bank is not willing to lend you. Quote the sold price of the house down the road and estimate the cost of the works and explain why you think the valuation is correct. Quote the other sold prices you have seen. It's £10k or they loose their sale now and are unlikely to get another new chain together to complete before Christmas.

Get your broker to also do some work for you. Would the bank be able to lend you some renovation funds on the same terms as the mortgage to pay for the new heating system (and maybe other work) in which case you could use your savings to meet the vendors part way.

anotherdayanothersquabble · 01/10/2016 09:29

Good luck. I hope you and your family get sorted before your DH leaves for Afghanistan. That in itself is stressful enough!

Original poster

Grantaire · 01/10/2016 15:39

Our EA is challenging the valuation. We'll see what comes of it.

Thank you for all the advice and support. I feel less desperate now. There's a chance I won't be homeless with a dh in an active war zone.

OP posts:

anotherdayanothersquabble · 01/10/2016 20:33

Ask the EA to go back to the vendor. Based on what you have said, the valuation is correct. Remind them that they are working for you as well as the vendor and that while it might feel better to get the best price, if they are still sitting with the property being marketed at the wrong price in 6 months time, the vendor will not be happy and you will have lost your buyer. Remind them also that the amount of commission they lose on 10K is negligible to the amount of commission they will lose on both sales. Does the vendor even know the valuation has come in 10K below yet? I bet the EA hasn't even passed this information on, it is slowing things down unnecessarily playing for time and as far as I know, they has no right to challenge the valuation. (we tried this at one stage and the value kept dropping with each attempt to review it.) I would say the bank are unlikely to suddenly accept a higher valuation based on intervention from the estate agent.

Laineymc7 · 01/10/2016 20:37

Go back to the sellers and show them the survey. Offer them what it's worth. They should agreed to that because if the try to sell again it will get valued the same and no one wants to pay more than what something is worth.

Mistylake · 01/10/2016 20:48

We had similar. Whilst we weren't keen on paying over the odds, we didn't want to lose the house and our own sale - there was a almighty chain hanging on both sides. Vendors needed the extra money as much as we did for their next house. In the end we went halves and we scraped together extra deposit to not lose ltv - a few slim months and praying the car/fridge etc wouldn't die on us just then.
Our EA tried to challenge the valuation as they wanted their percentage as high as poss, but surveyors weren't having any of it

Good luck, it's soooooo stressful!!!

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