Bank valuation just come in at 10% under our offer

[superheroslug]

Don't kno where to start, but just that really. We've been looking for 8 months and our house is also under offer and processing.

We love the house we have offered on, it ticks nearly all our boxes in a way that others haven't come close too doing . In part that's becauce we're in an area (of London) where house foot prints are very similar. It's also in a tiny lane with no passing traffic and disproportionately big garden. There have already been a few bumps on the road to buying so far, but we have got passed them and each time has affirmed how much we like the house. We've also kept looking and nothing else has come in the market which even comes close.

However valuation has come in and will effect our LTV albeit the mortgage won't be significantly higher. I'm just having a major wobble about the sense of buying something which the bank has valued at so much less. Given the cost of stamp duty etc we're pushing ourselves so it's a forever house. We've already been back to the bank and they won't let us appeal it or give us any detail about reasons.

Heart is saying ho for it, head is saying it's too much of a difference. Has anyone else been in this situation ?

go for it. it will soon come up to above that estimation

We're in exactly same situation, only different location and not quite as high a discrepancy. I had a thread on here last week with good advice (on phone and don't know how to link, sorry )

From conversations in RL, I think it's a bit of A Thing at the minute. I wonder if the overall uncertainty is feeding through into valuations, especially at the higher ends of the market and/or where there are few comparables.

I think we're going to live with it, although debating asking vendor if they could reduce to help us get closer to original LTV

Good luck - it's tough, isn't it?!

If you love the house then go for it.

If it's a long-term home and you can still afford it, I'd possibly ask vendor if they can split the difference/reduce a bit, but go ahead even if they can't - prices may dip, but you'll be there long enough to ride that out.

The bank knows something you don't and are not in the business of losing money. Walk away from it. It will always be niggling at you.

If its a home you love (it sounds lovely and quite unique) and plan to stay there for a long time carry on. If you were planning to flip it id exercise a bit more caution.
But a little lane with a big garden, id be chomping at the bit for that.

My feeling is the banks are slowly getting cold feet because of brexit so are erring on the cautious side at the moment and want a bigger buffer . It wouldn't actually put me off if your going to be there for a long time

I also think the banks are being cautious because of Brexit. If you can comfortably afford the mortgage, are buying it as a family home rather than an investment and are happy to stay there long term in the event you ended up in negative equity then I'd be happy to go ahead in your shoes. Otherwise pull out.

You can ask the surveyor for more details on how they arrived at the figure.

Sometimes they use the wrong comparables, sometimes they mis-measure when working out the sq footage and therefore the £/sq ft

They might have noticed something and have reservations about it

They might just be feeling pessimistic about prices at the moment.

But it is definitely worth speaking to them as soon as possible, and if you aren't satisfied with their answer, ask about appealing the valuation.

And if they won't budge on it, you have some leverage with the vendors, because all other potential buyers will have the same issue and therefore they won't necessarily get the asking price from anyone else

Goodness, no brainier. You have to renegotiate!

You have a professional opinion here that you are overpaying significantly. Any future buyer will likely encounter same issues.

So I would renegotiate. And I would renegotiate hard.

Exactly what Confused said. Anyone else buying that house will have to same issue...it's a strong negotiation tool.

Only if you can cope with potentially stepping away from it though. We put over am asking offer on ours to get it and thought we'd have the same problem. It came back the same as our offer. It's reassuring and gratifying so imagine it must feel rubbish and would 'taint' the excitement the other way round.

Definately renegotiate. Our seller dropped price to match lower valuation. Saved us a few grand.

Are you going to be able to add value to this house (modernise, extend etc) or are you just going to be relying on market increases? 10% is quite significant in the current uncertainty and apparent falling prices in London.

You have to negotiate the price down.

Discuss it with the estate agent, that's what they are there for. After all, it was them who over valued the property in the first place

can i push in for some advice? i might be progressing with an accepted offer soon and am worried about valuation and full mortgage application.

say i offer 400k on a house and have a 100k deposit, i will need to borrow 300k. when the mortgage valuer looks at the house, do they have to consider the property to beat least 300k?

If its not the above, how does it all work?

thanks

i'll start a thread...