I need advice - property down valued

[JackieTheFart]

Long story short, the property I am trying to buy has been downvalued by £16k. Our vendor can’t afford to sell with a reduction of that much.

I still want to buy the house. It’s tricky because I’m after a four bed with garden in a city area close to schools - and this ticks all boxes. In fact, it ticks more as it has a garage too!

I want this to be our forever home.

So, I’m thinking of attempting to meet her half way with the pp. This is fairly outing if family are on here as I’ve been raving about it, but I need some impartial advice.

• we agreed pp of £176k, 90% LTV
• I have about £30k equity and was intending to use £12k to pay off a person loan
• down valued to £160k, I’m thinking that if I take a 95% mortgage, then I’ll have 10k left over even if I pay off the loan. Offer that to her to make up some of the difference?

My thinking is - I was happy and willing to pay the pp of £176k so I’m no less better off either way. In fact, long term, my mortgage starts off lower even at 95% LTV so why not?

Either way it’s affordable. It feels weird to me but I want this house and intend to live there for a long time.

I could go to my broker but tbh he’s dropped a bollock on the application which is why I’m so pissed off, and as I said I want some impartial advice!

Please?

Sorry it’s tricky because this is literally the only house I have seen online or in person in the area that fits all my criteria. Plus within budget in months of looking.

No reason for the down value - I was asked for a structural survey which made no difference whatsoever - except I wasn’t told they’d downvalued then so TWO MONTHS LATER (nearly) I’m only just having these conversations with the owner.

people have gone crazy with how much their overpricing their properties and this is unfortunately what happens. alot of properties are probably going to end up back on the market for similar reason.

the property I am trying to buy has been downvalued by £16k. Our vendor can’t afford to sell with a reduction of that much

You don't have to offer the lower price, if you are happy and able to pay the full price or knock say £8k off to meet halfway, or other mutual negotiation, in the knowledge that you are paying a bit over the odds.

If you really really want it and there's nothing remotely like it that will tick all your boxes, then pay over the odds and be happy with your decision.

With the caveat that the £16K wasn't something majorly structural that will cost a fortune to fix on top of your purchase price.

The same happened with the house we have just bought, it was downgraded by about 10k and because we loved the house we met in the middle and paid the extra 5k, like you we were using some of the equity in our old property to pay stuff off so we had the 5k to pay out.

And like a pp said people are going crazy with property valuation and are lot are ending up back on the market!

Thank you for your opinions! I’d never heard of this before but I really just don’t want to let it go.

And the structural stuff is nothing to worry about - and is less than £2k of work even if it was urgent.

Were there other bidders? A down valuation is often only a problem for first time buyers with small deposits.

No other interest as far as I’m aware.

This happened to us, in order to get the sale through, the vendors agreed to lower the asking price to the ten grand less and then we gave them 5000 for a dining table! Meant we didn't have to reapply for a mortgage and the sale continued.

Hi, my thoughts are:

1. are you sure, sure, sure you're thinking with your head, not being ruled by your heart? Are the structural issues really just a few thousand, will you have the money, how stretched are you if the problems turn out to cost more? It's easy when you love a property to be really consumed by wanting it, and you get a blind spot. You'll pay over the odds to get that house.

2. my personal feeling, despite (1) above, is that the value of something is what someone is prepared to pay for it. If the house is worth £8k more to you than the Bank thinks it is worth, for the reason that you love it and it is perfect and there is nowhere else like it and you'll be there for decades, then offer another £8k. In the grand scheme of things £8k isnt a big amount if you can raise the money, unless you want to sell again and are pushed deeper into negative equity (which you won't need to worry about, as it is your forever house then resale value is not so relevant).

I'd ask Seller to drop the price by £8k and meet in the middle. That's not cheeky, not unreasonable. It isnt your fault the PP was set higher than the value of the house, just bad luck. Hopefully the seller will agree to the smaller reduction.

3. and with apologies to the Seller if I'm doing them a big disservice but it is easy to say "oh we can't possibly allow the price to drop £16k." In that case they will struggle to sell if they put the house back on the market, won't they? Because the next buyer will face the same issue, unless they are lucky enough to find a cash buyer. That would be a huge gamble. You could just call their bluff and say you don't want to fund £16k from your meagre savings, as it leaves you too skint, so reluctantly if they can't drop the price you have to pull out. I personally wouldnt go this route, I'd find the 8k.

Could you try an alternative lender to see if they value it differently?

@RainingZen thanks for your thoughts!

I am confident the work in minimal - a chimney breast was removed and a brace is required in the roof. I’ve had one quote for £1600, and tbh the lender is completely unconcerned - they’ve said it’s ‘recommended’ the work is done ASAP but they aren’t going to have any clauses in the offer. When I spoke to the surveyor he told me it looked like it had been removed maybe 20 years ago so it’s probably quite stable. That being said I plan to get it done fairly quickly.

I think all your other points are right and I’m glad you agree with me . I’m not too bothered about resale you’re right.

@Andthenanothercupoftea I could but tbh that’ll cost me for another valuation with no guarantee, and then I’ll have ERC to pay in addition to everything which will be about £3k. I don’t think it’s worth the hassle tbh but it is another consideration.

£176k sounds very good value for a 4 bedroom house!
I think valuations do err on the side of caution though as they can be sued if they get it wrong.

Honestly @flashbac it is great value, and as I envisage 30+ years of living here (plus of course paying off the mortgage as we go) I really can’t see it being an issue. The reason we’re in a tiny house at the moment is because we were in negative equity for a really long time as we bought just before the market crashed.

Thanks to all for kind of puzzling this out with me, I feel much better about it than I did yesterday. Ultimately I think I’d be happy to agree to give up to £14k as a cash incentive (not sure if that’s the proper term but that’s what I’m calling it!) to secure the house.

Next issue to sort - non-response of my vendors solicitors