Mortgage valuation lower than purchase price

[TheMouseInMyPocket]

We've just had our mortgage approved, however, the bank have valued the house at 20k less than we have agreed to pay. They are still lending us the amount we've asked for, so is this something to be worried about? I don't agree with their valuation tbh, but then I guess I wouldn't!

We had that. We had to suck it up. They were wrong house has increased in value massively since then

Sounds like it isn't an issue for you - assume you have a pretty low LTV? It is mainly an issue if they won't lend enough or it puts you into a different LTV % which means higher rates.

Mortgage companies tend to value on the low side. They are valuing on basis you default and they had to do a quick sale to recoup the mortgage. As long as you aren't in negative equity or it affects your ability to borrow you don't need to worry.

That's a huge drop though. I'd be renegotiating to be honest. The house sounds overpriced.

I'd present this to the vendor and try to renegotiate, even if you're in a position to proceed regardless.

What percentage of tge purchase price does £20k represent?

It's about 8%. I know that the house previously sold and fell through for 5k less than we're paying, so we might be able to renegotiate I hope?

I'd try at least. If the vendors push back and you want to proceed regardless, you've lost nothing by trying. And it'd happen to the next buyer, too.

We had this, but it meant the mortgage company wouldn't lend enough. We renegotiated the price.

Before we bought our current house, we had a valuation £67.5k out - we were purchasing in a problematic area with very very little comparable. It did bring tears to my eyes, more than 20% out

We had this happen to us this year - both on a house we were hoping to buy, and on our own house.

With the one we wanted to buy, it was massively downvalued - by 15%. The sellers weren't willing to negotiate so we pulled out (would have met them somewhere in the middle). They sold again but had the same thing happen, and are still on the market 7 months later.

Our house was only downvalued by around 4%. We actually felt the valuation was pretty fair based on sold prices of others on our road, and tbh had a bit of leeway in our figures. We were also mindful of our experience as buyers & the fact that our buyers were ftb with a limited deposit. So agreed to sell for the valuation price.

Definitely talk to your vendor - chances are that's why they lost the earlier sale too.

This is starting to become a problem more and more often as estate agents are overpricing to get you to go with them and giving people false expectations. Having been an estate agent I know that not a lot of research goes into the price that they recommend!!!

Buckinghambae, that is shocking!

Well, I've asked the vendor to split the difference with us, waiting to hear back...

We were offered by our vendor, to "put the money in Escrow and keep it away from the taxman" to reduce the price a little (10k), so politely ran in the opposite direction. It's now on the rental market and not shifting!

Completely normal in Scotland to pay over the surveyors valuation.

The vendor has agreed to go halves with us so I'm glad I asked!