Mortgage valuation £10k less than agreed selling price - negotiate?

[Fleabag123]

FTB and not experience in this process!
Mortgage valuation and survey has just been done, they’ve raised concern about floors (dry rot etc) and have come back saying they think the value is £10k less than the agreed price.
I don’t think I can afford to make up the shortfall if they won’t lend as much. I’m waiting to speak to my solicitor but I’m guessing the next step is to go back to the vendor and see if they’ll negotiate on price? We are chain free and they are keen to sell so I’m hoping they will negotiate.

I’m sure this is a common thing, I’ve just never done this before. Any advice appreciated whilst waiting for solicitor/broker to get back to me
Thanks

Ours was valued £12k less than what we offered, we had a 95% mortgage so couldn't proceed with the sale of the sellers didn't budge so it wasn't much of a negotiation lol but thankfully they wanted a quick sale and didn't want to start over with new buyers so sold it to us at the valuation price. Ours wasn't for any particular reason as it's only 10 years old, the valuer felt it was too much for the local market.

Sometimes valuations by drive by are seriously wrong.

My house is a 3 bed circa 450k. I have parking for 4 cars and it’s a period property.
Only 3 bed period property on the street. The others of same style are 4/5 bedrooms as one extra floor and go for 600k in top nick but otherwise same foot print.

But you could lump me in the 3 beds just down the road which are 310-350k with no parking half the sized plot and not period. So if you were just going via the info on the pc/post code. You’d probably take the 3 beds add on 10% for parking and come up we’ll short on price.

My drive by valuation was 380k but survey valuation was 450k rebuild price is 500k !?!

4 bed just came up on my road for 450k which needs a full gutting looks like someone spent their later years alone with no help :( . It sold above asking before live marketing...

But back to OP. Split the difference would be reasonable unless they had a lot of interest at asking price or the dry rot is spreading/not an easy fit e.g rebuilding bay etc then I would want to take off way more.

I’d be wary of surveys. Previous house the survey pointed out it had wood worm in exposed ceiling joists when it was obvious it was old and kept as a feature. All about covering their backs for any future insurance claims.

Wang
I see... definitely needed an internal inspection then.

There were no offers before ours. It had been on for 2-3 weeks and they’d already dropped the price a bit which I’m taking as an indication they’re keen to sell

If they dropped the price that quickly. I think you should have no worries asking for 10k less. They’re obviously looking to offload quickly.

You have the position of power here. They may come back with a counter or just accept.

If they come back with a counter I would counter their counter at half way below their.

Good luck. Hope it works out for you.

Thank you.
Called the EA on Friday morning, who called the vendor and left messages. They’ve emailed the vendor today as well but still not had any reply.
I’m aware I’m possibly overly anxious about it but I would have expected a response by now? Or are they wasting my time?

Why dont you get a company to check the floors for woodworm and dry rot and provide an estimate for treatment if required - i doubt it will cost £10k to do. You could negotiate to share the costs? Also something like this is best done to an empty house with no furniture to move. You might be able to get it done before moving in?

When I had a survey in which showed issues I had a £10k reduction agreed within an hour or so after vendor had initially said wouldn't budge - had to ask for £20k to get £10k.

I would interpret holding on as they are undecided but wouldn't let them stall too long. You could ask to put company round for quote and assessment, I would expect a bit more than this off for hassle involved.

Maybe.
The EA made it sound as if she’s not actually managed to speak to them, although I couldn’t call her today, had to communicate by email.
No idea if they are here, away etc. They’ve instructed solicitors but not sent any paperwork as yet.
I might get stroppy tomorrow and say I need to hear by a certain date or I’ll assume they’re not serious about the sale? Or is that too much

No I would say that sensible. The EA asked me if I would withdraw if didn't get discount and explained I didn't want to but husband did want to withdraw. I think it was fear of losing the sale made them reduce.

I would be even more cautious as they are divorcing - sometimes you get a situation were one wants to sell, one doesn't.

Hi Fleabag123.
We are in a similar situation - also FTB and it's all pretty nervewracking!!

The house we are looking to buy is old and has been let out for several years but unoccupied for several months. The neighbours have indicated that the landlord did very little to maintain the property. We spotted several problems on our viewing, so went with a full building survey. Report has just come back with a valuation of £20K under the price we agreed! And with lots of urgent repair work needed, (much more than we anticipated and hence likely to be way above what we had budgeted when we made our offer... but that's the point of the survey though, right? - to help you work out the finances before you commit).
All of which means we will need to go back and negotiate again.

In case it helps: we haven't yet revealed the full findings to the vendor, but have agreed that we will get quotes for the work needed and then discuss. Only once we have an idea of how much it's going to cost to fix it up will we know if we are happy to/can afford to go over the mortgage valuation.
And even though we've just spent over a grand on a building survey, we are prepared to walk away if the vendor won't budge, as it's just not going to be affordable for us otherwise and would rather cut our losses now.

It really does seem to be the way things go, and estate agents expect to have negotiations after the survey/valuation. Plus, the EA will want to sell it and get paid! So don't be worried!
As you pointed out - being a FTB and ready to go is a real advantage, and (depending where you are buying) the market is pretty flat at the moment (as you mention - Christmas and Brexit uncertainty are playing their part). And as was also mentioned above, the vendors should realise that another buyer is likely to get the same result, so it's not like the problem will go away.

Hope you hear good news back from the EA this week. Keep your resolve and Good luck!

Thank you @howaboutthisthen.

EA has just emailed to say she’s tracked down the vendor so hopefully news is on the way.

Good luck with yours too! Agree re cutting your losses if it’s going to be crazy money. I’ve spoken to some floor specialists and from the survey wording they don’t think it sounds too bad but I haven’t had a formal quote yet

Just chased up with EA who are claiming their phone lines were down yesterday!!! So frustrating.
I can’t tell if this is all genuine or if they’re just wasting my time

Any news? Sounds like they are buying time to me and would think about other options.

Well it dragged on all week with total silence. I got fed up yesterday and wrote a very stroppy email saying I was close to walking away which the EA forwarded to the vendor. This seems to have prompted some action as they called the agent today (cue mass confusion as the “progression” team who we’re dealing with don’t work weekends, only the sales agents!). There was some discussion today but having spoken to some dry rot specialists I don’t want to pay more than the valuation - and honestly at this stage I’m not even sure it’s worth the hassle if they’re going to drag their heels like this at every stage.
I was honest with the EA and made my case. They’re considering over the weekend and he said he’ll follow up on Monday - he’s one of the managers and sounded pretty cross with his team for letting it drag on so long . So we shall see!