OUR bank has devalued the property we want to buy

[Krabi2015]

Well, we made offer £15000 less then the asking price for a house in South Croydon. Which was accepted, the property has been on the market since Feb. now HSBC bank did revaluation through countrywide plc and they have devalued it by another £ 25000 they say the estate agents have hiked the prices of the property. Which I agree in most cases but not this one . However, we really like this one. You see I have to put 25% down payment and around £50000 stamp duty. I am an expat and I don’t have any furniture or a car so I am at the bottom for cash. I have to shell £25000 +£50000+25% down payment. The estate agent says the vendor doesn’t want to reduce any more and the bank are stuck. I would really like to negotiate with the vendor and come half way. I don’t think the estate agent want to renegotiate. They want us to change our mortgage lender to theirs which will be hard for us to get has an expat. It’s frustrating, if every time I go to buy a house and then bank say the property is valued high! Another dead wall. Has any one been in my situation? Can some one advise? Should I speak to the vendor directly? TIA

The EA are acting for the vendor- and of course they don't want the price to be reduced as if affects their commission. However, Countrywide are a firm of surveyors who have assessed the value of the house on behalf of the bank, to protect the bank's interest in the property. They haven't devalued it, they have given their valuation based on their experience of the market which is lower than the EA or the price the vendor wanted. The issue being that property prices in the London area are dropping so Countryside 's valuation maybe the more realistic.
Personally I would never go to a lender organised by the Estate Agent. Either you need to negotiate the price down (which will also reduce your stamp duty) or find another house. At the end of the day, a house is worth what someone will pay and can get a mortgage on. Have you had a survey done- Coutrywide may have spotted something you didn't which may affect the value.
Personaly I would go back to the EA and make a lower offer on the basis of the Countrywide figure.

50k stamp duty!!!! The house must be around 1.2m.... so 25k is 2%... not a massive down valuation tbh... but go back and offer what the bank valued it at... the vendor will be getting circa 97% of their asking price in a falling londin market... that's pretty damm good I think

This happened to us. We just told the vendor how it was. That was the mortgage we could get so that was the offer we could make and did make. It was all quiet for a week and then they accepted it.

Don’t call it a down value. It’s been surveyed by a professional surveyor. It’s been valued.

They haven't devalued the house - that implies they've done something to make it less valuable - they've just valued it at less than it was for sale for. And it's not your house, but I digress.

Surveyors value houses so lenders can be sure their security covers the debt, EAs guestimate the value and try to maximise sale prices because ultimately their commission is affected.

If the EA is stone walling you, the only thing you can do is try to approach the vendors directly. You may have to accept you'll need to walk away. Don't use the EA's mortgage broker. If you are prepared to try another mortgage provider, you could go to a whole of the market broker if you haven't done so already.

The problem is that there is absolutely no guarantee you won't find that another surveyor puts the same figure on the place. And do you want to pay more than it's worth?

as above, its a valuation, not a devaluation. less than 3% less than asking is a great price to achieve in the current market. There are some good properties in the area around the 1M mark, if you are struggling for cash you should look at cheaper properties!!

Revise offer to the bank valuation, and walk away if the vendors don’t play ball.

They will have this issue with all bank valuations now so they need to be pragmatic.

Why are you buying an expensive house that you can't afford to furnish? Seriously? Cut your cloth accordingly.

I assumed the op had added a zero to the stamp duty by accident and it was £5000 on a £300k property.

Still seems out of reach based on finances.

The house is obviously overpriced. The bank has done you a favour by refusing to lend more than it’s worth. Why would you even consider paying more than the bank has said it’s worth?

Countrywide do an awful lot of valuations for many high street lenders. There’s no guarantee that changing lender will help. Plus the new lender will want to know about any previous down vals.
Estate agent better magic up some money. Unless the next buyer is cash they’re always going to have this issue.

With 50k stamp duty, the discrepancy in valuation is a small discrepancy. If you cannot afford this discrepancy, you are clearly over-stretching yourself and need to walk away and look for something more realistic.

Why would you want to buy a property that's clearly been overpriced by the EA? Changing mortgage provider won't change the fact that London house prices are falling rapidly by the day and the EA is trying to pull a fast one. As Foxmuffin says, Countrywide do valuations for many high street lenders and it's highly probable you'll get the same lower valuation again. Tell the vendor you're not willing to move providers because of the involved process of applying as an ex-pat and while they mull it over start looking at other properties.

Actually surveyors used to call in to local estate agents to pick up details of similar sold properties in the area to justify their valuation. Now they probably do it on line. They nearly always err on the side of caution. Unless they find something seriously wrong with the house they probably know less than the local estate agents about prices.

Maybe they do know less than local EA but it's irrelevant - once they give their valuation to the lender, it's set in stone. The lender won't give OP a penny more.

I agree, this isn't a down value. It's the value of the property. Anyone can put a property on the market for whatever they want. But the bank want to know that if you default on the mortgage and they have to repossess that they will make the money back that they lend.
Offer the price it is valued at and walk away if they don't accept. It's unlikely that anyone else will buy it for more as the same thing will happen on most mortgages.

Wow! So good to hear from all of you. The property is our second house and therefore our stamp duty is high. The property is under £750000 nowhere near a million.
I will go to EA and tell them that mortgage lender cannot give us more then valuation price. Let see how it goes. I will keep you updated. Thank you.