Reducing initial offer?

[Liverbird77]

We put an offer in on a house and it was accepted. We have had it valued for the mortgage and their estimation is 20k lower than our initial offer.
We also had a survey (not just the homebuyers report, the full survey), which has identified about 6k worth of work needing to be done.
We've conveyed this information to the estate agent and are happy to provide documentation to prove what we are saying.
We aren't trying it on, or looking to rip anyone off, but equally we don't want to overpay by so much.
Would we be justified in offering to meet in the middle? We are considering offering 10k less than our initial offer. We think this is fair considering the valuation and survey results.
Is this an accepted thing to do?

If the mortgage valuation is £20k less, that would be where I would start, then state what your survey has found. You'll have to find the shortfall between the mortgage valuation and the sale price agreed otherwise.

We are lucky to have saved a very big deposit, so we will get the mortgage regardless. I just don't want to pay way over the odds. Technically, we could offer 26k less in view of valuation and survey, so I think 10k is reasonable

I would start at 26k less... unless the 6k of work was obvious when you made the offer. If not then 20k off... why get a professional round to survey and value and ignore the value... if hes saying it's worth 20k less than the offer then unless the market is rising why would you want to pay more than that?

What does the survey value it at? Was it a desktop valuation by the mortgage co or did they come round?

I agree that if the 6k was obvious or was taken into account in the valuation then I think you'd be looking at a 20k reduction, not 26k. What's the work?

The valuation was a desktop job by the bank, for the purposes of the mortgage.
We had a full survey. These surveys don't give you a value for the house, even though Home buyer's reports, which are cheaper, do!
The survey did list all work necessary, some obvious, some less so. The value to correct all this would be 6k.
We really like the house, and offer of 26k less would mean we lose it, however we do want to submit a reduced offer.
I just wanted to check that this is the done thing

A desktop valuation for mortgage purposes is still a valuation. It's your money for you to do with as you wish, but settling for a £10k reduction without any negotiation when you could get a £26k doesn't make much sense to me.

Offer what you want but be prepared to lose the house if the sellers take offence, a very real possibility. . A lot would depend on the how much £26k is as a proportion.
Also , check for yourself " sold prices" in the road. Surveyors always paint the worst picture to cover themselves.

A desktop is a fairly accurate representation of the value but is only valued on comparable properties, so if the one you're buying has any different features this may not have been considered

All surveys come back with work to be done. Even on some new builds. Unless something is major, then it's expected to need work. It's totally unrealistic to expect a house to be perfect unless it's brand new.

I wouldn't knock anything off for thr survey.

But I would start at the mortgage valuation and ask for twenty off.

Our offer was 420,000.
It's in the Manchester area.
@tessieandoz I was worried about that too. I don't want to lose the house because they are offended.
It's interesting to see the range of viewpoints on this. 26k would be a big reduction, but if we could get that, then I would be delighted!

I don't think you should consider the £20k and £6k as separate sums and add them together. The valuation is an estimate in its current condition, not what the value will be after £6k of work is done to it. I think asking for £20k off is fair enough but no more than that. Yes it might offend them and you have to weigh that up. But if you're going to ask for something off the price, the mortgage valuation figure is a very defensible suggestion.

You can also consider getting a second opinion on the valuation.

obviously the valuation takes into account the condition of the property, so the £6k to improve its condition is included, not additional.

You can ask. Did the house sell quickly? Did the vendors have lots of interest? Are prices rising or falling in the area? They could have other buyers waiting whose lenders would give a different valuation. As a first step I would go to the vendors agents and tell them about the valuation survey results. Leave it with them. Often they will ring the mortgage company surveyor and discuss the price with them to see where the disparity comes about. A desktop valuation isn't ideal and is wholly based on comparables in the area. Don't start talking about figures until you've seen the EA reaction. I sincerely doubt the vendors will just roll over and accept a £26,000 reduction!

What’s the house worth to you, OP? If it’s worth what you offered then don’t drop it. If you can walk away and find somewhere else, then put in a lower offer and take the risk. A house is only worth what someone will pay for it, but it works both ways. If it was my dream home and I could live there long term, I’d just proceed with it. Remember you could lose the money you’ve paid upfront (surveys), so take that into consideration.

We've told the estate agent what has happened but we haven't suggested a revised figure, just that we were sending the paperwork through (copy of survey and valuation) through and we'd discuss it when they had it

Watching your thread with worried interest.

We're awaiting the results of a specialist survey which the initial surveyor recommended as he it thinks may uncover work up to £15k which is needed, and certainly was not obvious on viewing.

That's on top of the 'obvious' modernisation work required and which we took into account when offering originally.

Do these discussions on price usually go through the estate agent? There's a Section 21 listed with the agent which makes me nervous and wonder if we should go to the vendor via the solicitor instead.

I'm not sure what a Section 21 is.
We are just communicating our info via the estate agent for ease...the solicitors seem to take ages.
I hope things work out for you!

Thank you, and good luck to you too!

The section 21 is a conflict of interest declaration between the vendor and EA. It should all be fine but I'm getting funny vibes from the EA so don't feel comfortable just discussing with them.

I’m in experience, even with a big enough deposit, mortgage companies can be reluctant to lend on homes worth significantly less than the price you’re paying. I understand this doesn’t impact lending amount, but it’s what I’ve witnessed.

The ea is employed by the seller as their agent, so they are working on their behalf anyway. I've noticed a lot of buyers think the estate agent is their agent, but actually that's no more true than a car salesperson is your salesperson.
In terms of negotiation there is always a conflict of interest for the ea, at their interest is getting the transaction through at any price the vendor will accept, whereas the vendor wants the best price possible.
You can use that to your advantage, if the ea thinks you'll pull out they'll put more pressure on the seller