Help! The house we are buying has been downvalued by 20k

ballsdeep · 2021-02-04T12:57:14+00:00

We are in a small chain, everything has been lovely nicely. We are looking to exchange by the end of march. We had our valuation for the house we are (hopefully) buying today and it's come in at under 20k lower than asking. The estate agent has said they won't come down. We are trying another mortgage company but I don't know how I feel about it. Where do we go, what can we do?!?

ColdToesHere · 04/02/2021 12:58

If they won't come down, you have to pull out. Tell them so.
Any other buyer is going to have the same issue.

rbe78 · 04/02/2021 13:01

Yep, as ColdToes says. Your hands are tied - if that's what the mortgae company will risk, that's what it's worth.

The same happened with us - the vendors came down to the mortgage valuation, because we were there and chain free, and they wanted to move. If your vendors don't want to start all over again, they'll have to come down.

Original poster

ballsdeep · 04/02/2021 13:01

That's what I think but apparently they've had loads of offers 😭
I said this to the estate agent but apparently the valuer was being picky. It's the people's whose house we are buying are pushing for the end of march

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Original poster

ballsdeep · 04/02/2021 13:03

@rbe78

Yep, as ColdToes says. Your hands are tied - if that's what the mortgae company will risk, that's what it's worth.

The same happened with us - the vendors came down to the mortgage valuation, because we were there and chain free, and they wanted to move. If your vendors don't want to start all over again, they'll have to come down.

I can't see how going to another mortgage company and getting scored again etc will help?!?

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NewHouseNewMe · 04/02/2021 13:04

What's the value of the house? If it's 20K out of 150K then it's a firm chunk and I imagine they will want to find a buyer with the capacity to close the gap with cash. If it's 20K off £1 million house then someone has to compromise - you or them.

Do you think the price is accurate?

helpmum2003 · 04/02/2021 13:06

What is your offer and what is the mortgage value?

CoronaIsWatching · 04/02/2021 13:06

Don't know how switching mortgage providers will help unless you've found one that will give you a higher LTV

Original poster

ballsdeep · 04/02/2021 13:08

@NewHouseNewMe

What's the value of the house? If it's 20K out of 150K then it's a firm chunk and I imagine they will want to find a buyer with the capacity to close the gap with cash. If it's 20K off £1 million house then someone has to compromise - you or them. Do you think the price is accurate?

It's £300,000.

It is a lot, but we were happy to pay it. We didn't think it was really overpriced at all!

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ballsdeep · 04/02/2021 13:08

@helpmum2003

What is your offer and what is the mortgage value?

We offered full asking price

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Original poster

ballsdeep · 04/02/2021 13:09

@CoronaIsWatching

Don't know how switching mortgage providers will help unless you've found one that will give you a higher LTV

I thi k they are hoping there will be another valuer!

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MrsElijahMikaelson1 · 04/02/2021 13:11

You will have to back out if they won’t come down- get the estate agent to put it to them anyway. How much have you spent on surveys? Is there a middle situation you’d be happy with?

wellhellohi · 04/02/2021 13:12

We were in this exact position before Christmas. And looks like the same values.

We went to a different mortgage company who used a different surveyor and the valuation came in spot on. So we are now proceeding

Some people did say that if the house wasn't worth it etc etc. But it was the house we wanted and met our needs so felt it was worth it.

rbe78 · 04/02/2021 13:12

They will be hoping that another mortgage provider will value higher.

Paddingtonthebear · 04/02/2021 13:13

I don’t think you have any option but to pull out I’m afraid. This happened to someone I know, it was about £10k under, the seller refused to lower the price and said they would hold out for a cash buyer.

anniegun · 04/02/2021 13:13

Can you find the extra £20k ?

Paddingtonthebear · 04/02/2021 13:15

Unless you have the extra £20k to offer of course. It’s a big shortfall though, it would put me off in theory but then in reality I may feel differently!

Original poster

ballsdeep · 04/02/2021 13:15

@wellhellohi

We were in this exact position before Christmas. And looks like the same values.

We went to a different mortgage company who used a different surveyor and the valuation came in spot on. So we are now proceeding

Some people did say that if the house wasn't worth it etc etc. But it was the house we wanted and met our needs so felt it was worth it.

I'm glad it's proceeding. How stressful is it ?? Did the other mortgage company go through quite quickly

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Horehound · 04/02/2021 13:17

Well the other option is to make up the shortfall yourself.

Glenchase · 04/02/2021 13:20

I wouldn’t make up the shortfall in cash. The house is worth less than the price. You don’t want to be the mug who pays more than it’s worth. Pull out rather than overpaying.

Alienchannell21 · 04/02/2021 13:22

The house we were buying was downvalued by 15k. Buyer agreed a reduction of 5k and we made up the shortfall. We really wanted the house though. I'm not sure if another surveyor will value it different. What were the reasons?

Alienchannell21 · 04/02/2021 13:22

Sorry seller agreed 5k reduction

gorillasinthemist · 04/02/2021 13:37

That's quite a siginificant percentage. I think you should ask the EA to speak to the sellers about a £20K reduction first rather than offering their opinion on whether they may or may not reduce the price.
I think it's far too risky to over pay for the house even if you do have significant extra funds avaialable. A lot of mortgage companies are being a little cautious as prices are expected to come down a bit this year.

CaffineismyBFF · 04/02/2021 13:51

Its a difficult one. Valuations are being made from the outside of the property and not taking into account any upgrades inside / garden area etc. Our house was undervalued by £30k in our latest valuation for a remortgage (but obviously doesn't bother me as I'm not planning on moving any time soon) and I had the option to prove my house worth (which was basically taking lots of photos of the inside and showing recent sales of houses locally with the same spec). Was a lot of effort so chose not to as it wouldn't have changed my monthly payments or anything but I would have if I were selling.

The idea of the valuation would be the easiest sale of the property for the Bank, not necessarily what it is actually worth - if that makes sense. If you like the house and the buyer won't budge then they will likely face the same issue with a new sale so id push for a reduction if I could. They may reject as it could impact their purchase if you're in a chain. £20k is a lot of money...

LawnFever · 04/02/2021 13:56

@Glenchase

I wouldn’t make up the shortfall in cash. The house is worth less than the price. You don’t want to be the mug who pays more than it’s worth. Pull out rather than overpaying.

This, who knows what might happen going forwards with house prices, if you cover the extra £20k you could end up losing it in negative equity

The estate agent are bound to say they have other offers, I’d take everything they say with a pinch of salt!

And even if there are other offers it’s irrelevant because the valuation is very likely to come back the exact same

Alienchannell21 · 04/02/2021 13:58

The surveyor on the house we bought did come into the property. This was November though so things might have changed again.