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Original poster

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

76 replies

ballsdeep · 04/02/2021 12:57

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?!?

OP posts:
Bluntness100 · 04/02/2021 14:03

I never understand why surveyors do this. At this small discrepancy it’s a grey area and subjective. And they know it’s going to cause huge issues. Why not just put it at 300. The mortgage provider must be asking them to be cautious.

Op, you can try a different mortgage company but other buyers will have the same issue.

Africa2go · 04/02/2021 14:09

I never understand why surveyors do this. At this small discrepancy it’s a grey area and subjective. And they know it’s going to cause huge issues. Why not just put it at 300

Because they are giving a professional opinion as to value. A buyer and seller could agree a price of a million pounds but it doesn't mean a house is worth that Hmm. A lender wants honesty and a professional opinion so it knows it has security for the hundreds of thousands of pounds its lending, not a valuation thats rounded up just so it suits the buyer/seller.

Heyahun · 04/02/2021 14:09

you need to remove the emotional attachment from the house I think - this is a red flag!

I had something similar happen with a valuation a while back - we started trying to somehow get the money together (borrowing from family etc) we were so sure this was the house etc

Anyway eventually came to our senses and let it go - it was too much money to come up with and the valuer was probably right!

I've found a new house since and am moving in soon

The house we were going to buy originally has just shown up on right move again asking price 25k lower - sooo they must be struggling to sell it

wellhellohi · 04/02/2021 14:20

It has actually been quite smooth once the second valuation came in.

OscarandLucinda · 04/02/2021 14:21

Our purchase was done valued by >100k. Didn’t make any sense as already had it a good price compared to lots of sold properties same area. Agreed but of a discount and we are meeting the rest. Will be very difficult but I know a cash buyer will take it if we don’t.

Outnumbered99 · 04/02/2021 15:22

What was the surveyors reason for downvaluation? The vendor could appeal the valuation, if they have local comparables etc it might help. I second the other posters who have said it doesn't matter how many offers they've had its what the valuation comes back as that is important.

If you go with another lender who might use a different valuer that values up to the asking price that could work- although it doesn't really put you in any better a position than if you put the extra cash in at this point- possibly worse assuming the second lenders mortgage product isn't as attractive and thats why you went with the first lender!

I would definitely be expecting the vendor to be absorbing some of this in your situ.

Bills2pay · 04/02/2021 16:13

When remortgaging a few years ago
the surveyor admitted to me he was under instructions to bring in a conservative valuation lower than the market value. I asked for a copy of the survey and successfully challenged some mistaken assumptions that led to part of the devaluation. This scenario might have happened here and it’s possible a different surveyor would value higher. Get a copy of the valuation and see if there is any incorrect information causing the devaluation. It’s probably not feasible to start again with a different mortgage provider. If the sellers aren’t willing to drop there and the surveyor won’t raise the valuation sadly all you can do is walk away

Hmmph · 04/02/2021 16:31

@Bills2pay

When remortgaging a few years ago the surveyor admitted to me he was under instructions to bring in a conservative valuation lower than the market value. I asked for a copy of the survey and successfully challenged some mistaken assumptions that led to part of the devaluation. This scenario might have happened here and it’s possible a different surveyor would value higher. Get a copy of the valuation and see if there is any incorrect information causing the devaluation. It’s probably not feasible to start again with a different mortgage provider. If the sellers aren’t willing to drop there and the surveyor won’t raise the valuation sadly all you can do is walk away
Will Mortgage providers give you a copy of their valuation though? What I have read online suggests that it is private between valuer and the mortgage company and you can’t challenge it :(
Catastrophie · 04/02/2021 17:02

What’s your LTV? Was it is physical valuation or a desktop? I think a lot are desktop at the moment and you can request a physical if you disagree.

Sprockerdilerock · 04/02/2021 17:15

When we were buying our first house it was down valued by our original mortgage company by £12K. We hadn't paid any fees yet so we asked our broker to find another lender that didnt charge valuation fees, which she did and the second valuation came back spot on.

If you love the house and can't make up the shortfall I would try a different lender.

Endogal · 04/02/2021 17:27

The house we bought now was initially undervalued by 13k (we paid 343,000), second mortgage companys surveyor valued it spot on and we went with them. If you really like the house and did your research on local sale prices of similar houses and those on the market before offering, and are confident you are not overpaying based on that I'd be tempted to wait it out and see what the second valuation comes out as. When we went through this our broker said it is common for there to be discrepancies, it's a professional opinion but still an opinion at the end of the day.

Blibbyblobby · 04/02/2021 17:32

When this happened to us I put together a pack of comparable local sales to justify the price and the valuer revalued it to our offer. But that was in a rising market and I was confident our price wasn’t overvalued.

Original poster
ballsdeep · 04/02/2021 18:28

Thank you for all of your advice. I really appreciate it.
The thing is, if it's am arm chair valuation the street has lots of different size houses on so if they search a 4 bed detached, lots have gone for lower because the one we are hopefully buying is so much bigger with a bigger plot!

OP posts:
Original poster
ballsdeep · 04/02/2021 18:49

@Catastrophie

What’s your LTV? Was it is physical valuation or a desktop? I think a lot are desktop at the moment and you can request a physical if you disagree.
80% valuation.

I've just spoken to my OH and we could get the 20k from equity but I really don't want to. I think the sellers are unreasonable not to even consider it tbh. I love the house, but I am not prepared to be in negative equity before I even open the front door

OP posts:
Catastrophie · 04/02/2021 19:26

You should be able to find out if it was a desktop or physical, have you got a broker? For the lender we are using (Barclays) they have created a new form to request a physical due to the number of down valuations currently.

Original poster
ballsdeep · 04/02/2021 19:31

Yeah we have a broker I've been going through her. If the next one comes back lower maybe we'll do the same. I was only thinking last night how smoothly it was going 😂😂

OP posts:
Catastrophie · 04/02/2021 20:15

@ballsdeep if it’s any consolation we are now on our third attempt to purchase... first house seller pulled out, second house had to building regs for numerous extensions so we pulled out. Fingers crossed third house goes ok! Further consolation, the third house is the nicest by far and its £10k cheaper than the others...

helpmum2003 · 04/02/2021 21:05

20k is less than 10% of the asking price so getting a different valuation or asking for a revaluation by the same lender may be all you need. It's all so subjective.

If you're planning to stay in the house for a while I personally wouldn't be put off by a less than 10% difference.

mumsy27 · 05/02/2021 02:48

Had 10 offers, 5 over the asking price, valuation came back almost 20% lower.
Agreed with buyer just over 18% of lender valuation.
I won't let lender who wants a buffer zone to cushion their loan risk.

StephenBelafonte · 05/02/2021 06:21

how much did the current occupant pay for the house?

Bumblebee413 · 05/02/2021 06:31

We had a valuation come in much lower than we thought it should do a few years ago and I called the surveyor. He was very reasonable about it and said that if I could provide evidence of comparable properties that justified a higher price then I'd adjust it. I did and he did, although not quite to what we'd agreed to pay. We ended up topping up some of the difference ourselves but the vendor dropped a little too as we said we couldn't go any higher and had done all we could.

DifficultBloodyWoman · 05/02/2021 06:37

@Bluntness100

I never understand why surveyors do this. At this small discrepancy it’s a grey area and subjective. And they know it’s going to cause huge issues. Why not just put it at 300. The mortgage provider must be asking them to be cautious.

Op, you can try a different mortgage company but other buyers will have the same issue.

With that attitude, why bother with a valuation at all?
Covidcorvid · 05/02/2021 06:41

I can understand the vendors not wanting to budge. You say you thought it was priced ok, if they had other offers then others felt the same. Especially if it’s a drive by valuation which has taken into account the bigger plot, etc I wouldn’t be dropping the price.

Covidcorvid · 05/02/2021 06:42

Not for one valuation anyway, of another came back low then I guess they’re going to have to start thinking about it.

inquietant · 05/02/2021 06:43

@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. Prices have been inflated by the stamp duty holiday, but as prices are expected to revert afterwards, you're the person who'll be left with something you paid too much for.

Before rushing you should consider the valuation carefully. The house is worth £280,000, are you happy to pay £20,000 over its value?