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Original poster

What would you do? Valuation 10K lower

39 replies

HereWeGoAgain24 · 10/09/2021 07:54

Valuation from lender has come back 10K under asking price.

We had offered the asking price of £150K which was accepted a few weeks ago. A couple of days ago we got news that the valuation came back as 140K.

The vendors are not willing to drop to 140K, instead said the lowest they would go is 145K but we don't have that extra cash lying around to make up the shortfall.

We've been given the option to try another lender, but numerous amounts of people we've spoken to have all advised this is likely to be a waste of time as the valuation won't change. Following this, appeals rarely seem to work.

Our advisors/solicitors are currently in talks with the vendors to try and get them to lower price.

What would you do?

We are FTB so no nastiness or total jargon please Grin

OP posts:
Meloncurse · 10/09/2021 07:58

If you don't have the option to find the extra cash and the vendors won't budge on price your options are fairy limited, you either try another bank or the sale collapses.

milian · 10/09/2021 08:00

We tried another bank and got a different answer - worth a shot.

Defiantly41 · 10/09/2021 08:02

Ask the valuer which houses he used for comparables (ie sold houses with same features in same or similar area). If you think these are not reasonable comparables eg less rooms, smaller garden, less good condition etc you can ask for the value to be reconsidered

Do the same research yourself (eg Zoopla) if you find better comparables which support the valuation, ask the valuer why he didn't use them?

And finally, if none of those comparables support £150k, then show them to the vendor and ask them to reconsider

Asiama · 10/09/2021 08:43

I would try to appeal the valuation, they may increase it slightly. I did this once and provided my own examples of recent sales for them to consider, and they increased the valuation by 5k.

Soontobe60 · 10/09/2021 08:46

I’d tell the EA that it’s £140 or you’ll have to walk away. Have you had the survey done yet? Bear in mind that it may well come back with lots of issues that will also cost you!

Soontobe60 · 10/09/2021 08:51

That’s around a 7% decrease in value - quite a big difference. The question is, can you afford to absorb the difference in the value of the house and what you pay for it? Do you have an extra 10k deposit? For a 90% mortgage on a LTV of £140k and purchase price off£150k you’d need £24k deposit. For a 95% mortgage you’d need a deposit of £17k.

dd207 · 10/09/2021 09:41

You can appeal the decision if you can find 3 similar properties that have sold and completed in the past year for higher than the valuation.

It's difficult right now because the market has been so fast, the data that the valuers are using is out of date.

I'd speak to the mortgage advisor to try and get another valuation from a different bank.

I'd also go back to the estate agents to see if they can negotiate.

Paddingtonthebear · 10/09/2021 14:43

This happened to us a few months ago but it was £25k under. We decided to get a second opinion and tried a different mortgage lender who agreed with the original price.

So may be worth trying a different lender. We ended up pulling out of the purchase anyway as the survey revealed too many issues.

Paddingtonthebear · 10/09/2021 14:47

Oh and then the vendor put it back on the market for £5k more than the original sale price even though there was a load of issues in the survey including damp in every room Hmm. It sold in about two days again despite that, because the market is so crazy right now. I didn’t want an overpriced damp house though!

FleasInMyKnees · 10/09/2021 14:51

Was it the mortgage lenders valuation, did they say why it was 140. Have you looked at comparable houses at that price. I wouldnt stretch if you cannot afford it.

Paddingtonthebear · 10/09/2021 14:58

In our case the mortgage valuation report didn’t say anything except valuation figure.

It’s a tough one. If you can cover the cost yourself and are happy to then go for it but if you can’t get the mortgage for it, or have any doubts about the risk of being left in negative equity, then best to walk away. The second lender that agreed the valuation actually gave us slightly worse terms than preferred lender too. Unfortunately it’s a sellers market at the moment and buyers are really being pushed to the max with prices 😩

Original poster
HereWeGoAgain24 · 10/09/2021 15:01

Looking at nearby sold prices, there doesn't seem to be much at all which is similar to this in recent years. It sold for 130K back in 2017 so they'd still be making 10K profit but nothing I feel confident in appealing the valuation with unfortunately.

We simply don't have the extra cash to make up the short fall, we're doing a 95% mortgage originally based off 150K.

We're going to view another property tonight to explore other options if the vendors are stuck in their ways (feels like it could go either way at this point).

We may try a different lender, although it seems majority of lenders will agree on valuation prices and it's unlikely, though not impossible, to change.

OP posts:
FleasInMyKnees · 10/09/2021 15:06

The other property may suit you better, if you cannot afford it and they wont budge then they will lose the sale to you. Whereabouts are you looking, can you widen the search area

Paddingtonthebear · 10/09/2021 15:06

In our case hsbc valued it £25k under and Halifax valued it at the full asking price. 10% deposit mortgage

Original poster
HereWeGoAgain24 · 10/09/2021 15:10

The second property we're viewing tonight, on first look at photos, is probably a lot better suited.

Things are selling super fast at the moment it's quite a worrying thing to be honest! The house we're half way through buying sold in 4 days 🤯 and we had to out-bid at least 3 other buyers.

So I'm not even 100% sure what our options are if we prefer this other house now.

FTB issues - thinking it'll all be exciting and a breeze... oh how naive eh 😁

OP posts:
KerningBurnHole · 10/09/2021 15:13

This happened to us to us twice many moons ago. The first time the estate suggested that we make up the difference with credit cards - we walked away and the house eventually sold 2 years later for less than our valuation. The second time it happened the vendors reluctantly accepted and thankfully we were able to proceed. Hope things work out for you

FleasInMyKnees · 10/09/2021 15:26

If you prefer the one tonight you out in an offer which doesnt have to be the asking price and it all starts again. Are you renting, ftb are in a good position as there is no chain.

HollyBollyBooBoo · 10/09/2021 15:33

Valuations can come back wrong, mine came back at £180k even though the same estate agent (who did my valuation) sold the exact same house as mine 3 doors down for £210k just a few weeks before.

I complained and it was changed.

InpatientGardener · 10/09/2021 15:47

This has happened to us but 37k under. Because we have a lot of equity we can still get a mortgage but it will cost us more and we are theoretically burning 37k of equity. We are trying another lender to see if they value higher and close the gap a bit. It would be worth pointing out to your sellers that anyone who needs a mortgage to buy their house may also have this issue. In your shoes I would get a 2nd valuation from a different lender (check they use a different company from the initial lender) but keep your eye out for an alternative property and be prepared to jump ship.

Original poster
HereWeGoAgain24 · 10/09/2021 17:05

Second property a no-go. Many reasons. More expensive, and so much work to do, almost a full reno which we just don't have the time or funds to do.

Still waiting to hear back from EA to see if vendors are willing to lower the price, hoping to hear something on Monday.
If they're still refusing, we've agreed to try a different lender and hope for the best. Concerned if we try a different lender and they agree on the valuation that the vendors will still refuse.

Also we're not renting, we're FTB with no chain at all.

OP posts:
tootiredtospeak · 10/09/2021 17:13

Find out what type of valuation it was if it was a desktop ie the value didnt visit the property but put together a figure based on recent sales in the area I would challenge that and ask for a professional valuation. If it was a professional one dont waste your time and get a broker to go to a lender who they know will uwe a different valuer.

ReeseWitherfork · 10/09/2021 17:17

My house was valued £30k, we said we weren't willing to make up the difference and the sellers kept with us at the lower price. We pretty much pulled out though, mainly because I refused to "overpay". And I'd advise you not to also. The bidding war may very well have pushed it to more than its worth.

ReeseWitherfork · 10/09/2021 17:17

Valued £30k less than our offer*

Original poster
HereWeGoAgain24 · 10/09/2021 19:05

@ReeseWitherfork glad to hear it worked out for you. We were so close to just saying "look, it's 140K or we're pulling out of the sale" 🤷🏼‍♀️

OP posts:
Asiama · 11/09/2021 09:16

OP I may be going against the grain here, but if you are able to overpay by 5k then it may still be worth it. In my case there was initially a 15k difference. The vendor agreed to reduce the price by 5k and my appeal of the valuation increased it by 5k, so the remaining difference was "only" 5k. I decided to pay it because the house was worth it to me. The market was hot and it was difficult to find a house in my budget as they kept being sold within less than a week. Everyone advised me against overpaying the 5k and told me to walk away.

Three years later I sold it for 60k more than I bought it for, so it worked out in the end. There is no guarantee of this happening, but even if it hasn't, the 5k was worth it to me versus renting for longer.