Bank down valuation

[Mumbum2011]

So the bank downvalued the property we're hoping to buy by 15k. We've offered to meet vendors half way. On tenterhooks since 10am this morning waiting on a response from them.

Are banks down valuing a lot at the minute?

I had a thread on this when it happened to us in September.

Buyer refused to negotiate and threw house back on market, where it still languishes.

We are now buying a much nicer house, so it worked out for us in the end that he was a knob about it.

@Chumleymouse 'What a load of shite 👆🏼 Just pay what you can afford / think it’s worth , simple as that.'

I'm sorry but this is really poor advice.

Are you suggesting that people make unsound financial decisions/ potentially land themselves in negative because that it what you appear to be advocating. It's pretty dangerous to give this advice now when we are on the brink of major recession and rises in house prices are not expected.

Thanks MumBum. I hope you get the outcome you want.

I think the banks are doing the right thing here, otherwise it will spiral out of control. Of course you can't help cash buyers over-bidding

We have agreed not to go over asking price in bidding wars.

That’s fair enough , good luck and I hope you get it 🤞🏼

@thelumberjack, Chumley’s attitude and advice are truly shocking. As I said; karma.

I’m nervously awaiting our purchase valuation. My own surveyor down valued it by 3% of our offer (mainly due to some issues we’ve had checked by tradespeople and they won’t cost much to fix) and the bank one is happening this week. We cannot afford to add any more money. We’ve already stretched ourselves to put down a bigger deposit for better LTV due to terrible mortgage rates. Our offer was 93% of the asking price so I can’t see the seller being willing to drop again.

We were in a bidding war so we actually offered 15k about asking. Seems like original EA valuation was spot on!

Is it possible the valuer was under pressure, so just looked at this and went with it as the valuation?

You could offer the vendors the options of (1) lower the price, (2) wait until you’ve sold yours or (3) remarket. 1 is the quickest

Banks are nervous and valuations are almost certainly coming out low. They are not thinking about buyers, their concern is what they would get if there was a forced sale.

We recently had to get several RICS valuations for my late mother's estate. The first guy, who was well known locally, came up with some bizarre figures. It then transpired that local agents loathed him as he had caused several house sales to fall through because of weird valuations. We got someone else in whose valuations lined up with what I was expecting. 30% different in one case which would have been an awful lot more inheritance tax.

We are selling an investment property to an investment buyer for quite a low price. I have already told the agent that we won't entertain any renegotiation as a result of the mortgage valuation. Given BTL mortgages normally require a 40% deposit I also suspect banks are less fussy.

Whether the seller agrees to OPs proposal will depend on their circumstances. If this one falls through OP will lose the Stamp Duty concession. However house prices are predicted to fall next year. Ops decision might depend on how much she wants that property, how long she plans to stay there and whether she can find the money.

What a load of shite 👆🏼 Just pay what you can afford / think it’s worth , simple as that.

Yes, what would the bank know about the housing market? Why wouldn't you chuck another £15k in? Why not 20?

I find the large minority of MNers who think you should offer as much as you can possibly afford first time and any offer less than about 95% of asking price is a mortal insult are just odd.

This is (presumably) most of your life savings OP. Are you really going to be fine if it's worth 20k less than you paid in June?

We’re porting our mortgage (downsizing) - does a surveyor still come out to do a valuation? We assumed so
Yes porting doesn't make any difference Bank still has to decide if they will lend and how much

@Foeveryoung1

By your logic people should be exploited because of their emotional response. This is akin to saying it is okay to rip off I’ll people who are desperate because in their desperation they may be willing to put a high price on a remedy that may be truly worth only a fraction of what they, in desperation, will pay.

It is immoral to exploit people who are being blinded by emotions rather than financial sense. Paying more for the house that it makes financial sense to do so is indicative of the person being led by their emotions. Exploiting them for that with this nonsense justification that the house is worth what they want to pay for it horrible behaviour. But karma exists. I would hope the extra those who squeeze out of desperate people lead to a marked change in their lives and circumstances. Often these rip offs are soon spent and no life changing outcome to show for ripping people off.

tell every auction house and the like of ebay, how immoral to accept offers above asking price. you are speaking of the buyers as if they are emotionally unstable.

I've sold my place recently on open day, 10 over asking offers within couple of days.
I genuinely beg the desperate and kind buyers to only offer (word by word)what it is worth and they can afford.
so how do you proceed in this case?
call it greed if you wish.
karma works both way, you will find yourself selling and we shall see how mighty you will be.

Apples and pears, mumsy. A couple of things:

1. People buying through auctions are typically investors without emotional attachment to their “dream home”. Auction prices start the bidding low. Therefore the concept of asking price is different in an auction versus the normal run of the mill estate agent type thing. That is not to say that some estate agents price low hoping to get a bidding war but I digress.

1. If an independent professional said to an investor at an auction that your bid is not financially sound or way too risky given the economic circumstances, I am pretty certain an investor would walk away. It is rare to find an investor at an auction or otherwise who will go ahead with an investment when told that the investment is not worth the price tag.

Out of the 2008 financial crisis came an obligation on financial institutions to ensure that people can afford to buy the house they are interested in. The crisis happened because banks were greedy, lending to people who could not afford the property. They borrowed more than they could handled, paying ridiculous prices for dream homes. People’s emotions must not be exploited. The world learnt this the hard way in 2008.

As for karma, I know myself and I will not say to a person “tough if the bank says the house is worth less than asking price, go beg, borrow, steal or ruin yourself to make up the difference’. I have never lived my life that way and I won’t start now.