Valuation has come in 19k under our offer price

[birdladyfromhomealone]

Offererd £199,000 on a house on at £205,000 a probate sale in early August.
Probate is still going through so we cant exchange until that is done.
The offer was sold as seen ie with all the deceased clothes, furniture books etc for us to clear.
We had our mortgage survey done in late August but have since decided to have a full structural survey due to points highlighted in the mortgage survey.
That has come back with damp, woodworm, rotted windows, no damp proof etc
The valuation was £179,000
Clearly we would be fools to pay £199,000 and then spent £££ getting it made sound.
The estate agent sent us this :-

Hi Birdlady

The property is sold as seen and the owner will not wish to carry out any works on the property.

Obviously it is your decision as to whether you would like to proceed or not, if you can let us know as soon as possible in order for me to update the owner.

WWYD?

Your mortgage company will likely only be prepared to lend to you based on the lower valuation (ie if you are borrowing 60%, it will be 60% of £179k rather than the amount you originally expected). So the matter may be out of your hands anyway. Have you had that conversation with them?

Which area are you in? South east London prices are definitely falling. I was asking for advice on mn recently because my son had mortgage downvaluation and seller wouldn't shift on price. Son offered 362000 from 37200O. Agent advised sellers not to accept lower offer. After more issues, son pulled out. Property is now back on the market for 350000 and still not sold. The house next to mine on for just over a million and still sitting empty after 18 months ( probate sale). Buyers market in some parts of uk due to brexit and extra stamp duty.

Personally I'd tell them that due to the mortgage valuation and the myriad issues highlighted in the structural survey you withdraw your offer of £199k and now offer £179k. I'd say that I'm now going to start my property search again but that the offer will remain until I find a new property so if the vendor changes his/her mind please let me know.

I appreciate that the executors have to maximise, and be seen to have maximised the value of the house but they sound very unrealistic.

Good luck birdlady

Time to pull out I'm afraid. With that amount of work needed it is going to be a money pit whatever price you pay. It may be a wrench in the short term but you'll breath a sigh of relief in the long term !

Only here to offer the same advice, it’s worth 179 not 199 to the eyes of the mortgage lenders, I would do the same withdraw 199 offer and put 179 in the table and get looking.

20k is a lot to find and even more to pay over the odds in a market where prices could fall - just feels risky but only you know how much your have your heart set on the house and if emotionally it’s worth the extra 20k

Which area are you in? Most places are stagnant or falling.

I'd wait. I'm sure the agent will come back to you... It's not a seller's market at the moment.

the latest installment= email from estate agent means we have decided to pull out as there are other more modern terraces for sale around the 200k mark that hopefully wont need the amount of work on them.

Hi Bird.

Thank you for letting us know. I understand your position however from our clients point of view if we were to advertise the price at £179000 we would be inundated with offers and inevitably the price would end up being much higher (even higher than the £195000). It may be that the valuer has valued the property at that figure but he is working on your behalf and would be very conservative with his figure for this very reason. The price was agreed in August and was sold as seen at the time, regardless of what the valuer advises the property is worth currently.

I have had a look myself at properties sold recently in the area and there are very three very similar properties in very similar condition within ¼ mile that have sold since March this year and those are priced between £230000-£215000. Our client wanted was keen on a quick sale therefore priced the property appropriately to achieve this. The market is very strong in this area for properties of this standard.

So someone offers 230,valuation comes in at 180, they meet half way and get 205...

I'm finding it sad that the seller, who presumably inherited the house from a deceased relative, isn't even arranging somebody to clear the deceased's belongings out. It feels wrong to make 200k profit from an inheritance and leave the belongings to the buyer, a stranger to the deceased, to throw out. Couldn't they at least arrange one of those house clearance firms to do it?

OP you haven't confirmed what the mortgage valuation said.

What was that?

the mortgage valuation was £175,000 which was why we decided to go ahead with a full structural survey to make sure the house was sound. In or opinion looking at other similar houses with a sea view - which this one doesnt -£199 was a good offer.
we are going back to the one with a sea view with no GCH on at £195,00 to make another offer- still for sale 12 weeks on.
TBH it would have been awful clearing the house of a young 52 batchelar, throwing his life away :(

Op you are right to walk away.
It sounds like a money pit of a property tbh.
Keep looking as something a lot better will come up, I'm sure.

Whatever the mortgage valuation comes back at is usually the agreed sale price, and as an estate agent that's what I would be advising my client!

You can see why the EA thinks you're still interested in the property though - you already had had a valuation (albeit it was for the lender) that the house was only worth £175k and you didn't walk away. You went ahead and spent more money on it by instructing a structural survey. The EA presumably thought you were still thinking about proceeding.

Your structural survey now mirrors (more or less) what you knew already, so as far as the EA is concerned, you're in the same position as you were in August and 2 months later you still haven't pulled out.

I think you need to go back and explain this really is a line in the sand. Every other buyer is likely to have a similar mortgage valuation, even if they don't get a structural survey, so the vendors are likely to have to reduce the price their willing to accept. If they won't budge, then you walk away.

The structural survey might have been working for you, but the mortgage valuation is on the banks behalf and nothing to do with you. The estate agent should really acknowledge that, and be advising their client to reduce the price as someone else said.

Run away, this is definitely a disaster waiting to happen. Sounds like an absolute money pit!

Probate definitely shouldn't take that long!

Even setting aside the lack of sea views, a house on a cul-de-sac with a primary school at the end of it will inevitably be worth less than houses on nearby roads without the twice daily parking/drop off issues. DS2’s school is in exactly the same kind of position and there is no way I’d want to live on that road.

The estate agent isn't losing their commission yet, they are telling you there's the house is actually worse more and someone will be along soon to pay it but they will be telling the seller there's no way anyone would offer more in future as they will all get the same valuation.
They only need a sale, they don't care the price, whoever cracks first...

Arbitary in some places, given the scramble for school places, the value of houses increases the closer you get to the school. Lots of people would pay more to live that close. Also, it comes down to priorities- I'd much prefer to live on a road with potential traffic issues for 30 minutes twice a day (with quiet roads outside of that and at weekend) rather than somewhere else with say a noisy road 24/7.