A house is worth what someone will pay for it...

[LividLaughLovely]

Unless the bank disagrees.

Our lender just downvalued the property we wanted to buy by £15k and our homebuyers surveyor downvalued it by £20k.

They’re both right, it was overpriced but we didn’t think it mattered because it was what we wanted and we could afford it with the mortgage we thought we had.

We can’t buy without the mortgage and so approached the vendor to negotiate.

He’s point blank refused and put it back on the market within minutes, at the price nobody will be able to mortgage it at.

We’re back to square one and I’m worried we’ll lose our buyers, who are ftb and already antsy at how long it was taking.

Very little new coming to market here now. Gahhhh.

Vendor is a fool - he’ll never get an offer as good as ours to follow through if nobody can mortgage the house. Good luck finding a cash buyer willing to pay over the top before March.

Unless he gets a cash offer or someone has extra cash to top up the mortgage I suppose.

Like ^ said....not everyone needs a mortgage. We offered a substantial proportion over asking. No idea if we were ‘had’ or not as we were in the fortunate position of being cash buyers. It was our dream family home, in a dream location so we were prepared to pay a fair bit over asking (sealed bids) to secure it.

We lost an over-asking bid on another house in August. We actually bid £1k more than the winners but they were in rented.

That offer was £20k over asking, so it’s not like we’re averse if the house is worth it.

Just so mad.

Seems to be happening a lot atm
Surveyors are being cautious... rightly so

They'll sell if someone else thinks it's worth the asking price and they don't need a mortgage. Keep an eye on it, they might end up lowering the price.

Same happened to me, they weren't happy about the damp even though the house was built in 1890... it being old was actually one of the reasons it was costing so much in the first place as was very sought after!

The sellers came down a little but in price and we had to throw a load more money at it so we could take the lower mortgage but we were very lucky to be able to do that.

We had a very over zealous surveyor.

I think the surveyor is fair really.

The house IS overpriced. Doesn’t stop us wanting to buy it 😭

The problem is if you default on your mortgage will they be able to recover the money they've lent by selling the house. So they will only lend you what they think the house is actually worth.

Yeah I get it. Doesn’t stop it being an arse. Nearly a grand in survey/mortgage fees and nothing to show for it.

Could the estate agent not have a word in the vendors ear about the ramifications of the valuation? Like does he actually understand that he’s limiting himself to cash buyers or those that have the funds to top up a mortgage?

@Letsgobritishcaledonian

Like ^ said....not everyone needs a mortgage. We offered a substantial proportion over asking. No idea if we were ‘had’ or not as we were in the fortunate position of being cash buyers. It was our dream family home, in a dream location so we were prepared to pay a fair bit over asking (sealed bids) to secure it.

This, or you don't need to be mortgage-free, you may just have a chunk of equity and only need to borrow a small amount compared to the house's value.

Sympathies, OP. We're trying to buy atm, the valuer was in the house, and it's particularly tricky to get a mortgage.

OP, so have you not got the extra 20k top up to the valuation?

Cash buyers are looking for a bargain. They are fewer than mortgage buyers. Once the property stays on the market for a while, the vendor will face pressure to reduce. It’s a big risk for the seller but good luck to them.

I’m worried about the same thing happening but I’m prepared to walk.

Our offer is subject to survey so we hope that matters. Is that a normal clause? Was your offer subject to survey OP?

What was your LTV ratio OP?

From the sellers point of view, he took the highest bidder who then didn't want to be the highest bidder. They may have been several others who weren't tied to a mortgage or had a greater deposit. It's an unpopular view but it is his right to take his chances again on the market.

The seller is silly. The property will be seen by future buyers as on the market for a while or there is a problem with it. They will want a discount. The seller has no guarantee that the problem you had is not repeated.

I am a believer in the bank appointed valuers estimate and let me explain to you why. 1. Estate agents and the seller person would often inflate the prices . The seller would almost always go for the estate agent with a higher valuation and estate agents normally inflate prices. 2 valuers have a strong reasons to be conservative (for legal reasons, they are acting for the bank their client and because of the criteria they are using). Valuers are likely to value lower than Estate agent and seller.

Put 1 and 2 together and it is likely that the valuer is simply correcting the overestimate of the estate agent and seller. The best thing seller and buyer can do is either accept the independent valuation (remembering that the tendency of estate agents is to overprice) or negotiate and meet in the middle. For large money like £20k as a buyer I would seriously think about walking away. As a seller I would lookIng for a compromise because another valuer would probably downgrade too maybe not by the same. Maybe more maybe less but when you thinking of big extra like that it maybe not much difference.

There’s another thread running with someone asking which offer they should accept.

They have one a little under asking who has 80% deposit. They are hoping to get an asking price offer.

But this thread shows that being in a strong position where you won’t be impacted by a bank valuing it a little lower can make you the better buyer even if you offer less. Those buyers who get into bidding wars and end up offering (and having accepted) offers that are at or above asking price are more likely to find it is valued lower. Those buyers then don’t have the right LTV to get a mortgage or to get the good rates.

I’d think most sellers want to complete quickly at the moment. Prices are only headed downwards in the medium term and with furlough ending and job losses imminent it could be soon. So getting a buyer who is unlikely to pull out because if financing issues, but who will pay a bit less is probably better than a top notch offer which might fall through, elating you trying to sell when the market really has turned.

The banks are being very cautious at the moment and there is a view prices could drop over the next year or so due to the very difficult economic conditions. The stamp duty relief is creating a bubble of demand and pushing prices up short term.

I think you should feed protected by your survey and the bank valuation. The ramifications of over paying could mean you were stuck in negative equity, unable to remortgage, get a new deal when the first one ends so at the mercy of the lenders variable rate, stuck and unable to move for a very very long time.

I know the wasted money is a pain but I think you’ve had your hand forced to do the right thing, and the seller is a stubborn fool!

Can you not go into rented OP? It will save your sale and also mean you'll end up with either a cheaper or nicer house if prices slide next year.

OP, that's crap.

Hopefully your sellers will see sense after a couple of weeks back on the market!

There is no mention of an Estate Agent here who, although he or she works for the vendor, could have been doing the negotiating here. They are after all experienced qith this sort of scenario especially in a falling market.

But if this sale really isn't salvageable I would also consider renting for a year to keep your buyers. Rents are going down and are also negotiable. I think it's absolutely inevitable that house prices will drop.

Sorry, op, what a crap situation. I agree if you can keep your buyers and look at rented for awhile it puts you in a good position.

OP one day you will see the sold price on Rightmove and it probably will be at less than they could agree with you right now. Greedy and unreasonable sellers will suffer as prices begin to go down and less buyers because of the Brexit and what Covid is doing to people’s jobs and businesses.

We had this. Downvalued by £35k and we couldn't afford to make up the difference. We pulled out as vendor wouldn't budge on the price. She got a cash offer for FAP 6 months later - she was prepared to wait it out. The survey value for a mortgage lender won't matter to a cash buyer if they decide they really want the house.

We had a 20% deposit and offered full asking because it was worth it to us on those figures.

As far as I’m aware he had no other offers.

Rejiggling to absorb the excess £15k would put us at 85% and mean a worse interest rate, making it far more expensive than it should be.

I sincerely doubt he’ll find anybody willing to pay cash for that price before the inevitable crash - we would’ve wanted to be there ten years plus so it didn’t really matter to us!

He didn’t entertain negotiation at all - the phone call from the agent must’ve taken less than three minutes and she was audibly annoyed that he hadn’t listened to her advice.

I’m over it now, we’ll find something else I’m sure. Bit reluctant to move into rented with a small baby though... Hope the next buyers don’t end up wasting time and money like we have. He’ll have to see sense if it happens a second time.