What would you do? Valuation 10K lower

[HereWeGoAgain24]

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

@Asiama unfortunately we don't have any extra cash lying around to make up the short fall. If we did, I'd probably agree to pay the 5K difference. Thing is, they bought it in late 2017 for 20K less than they're selling it for now. And honestly, the previous owners definitely took better care of it so apart from the market being more competitively priced, I don't actually think they've got a house worth 20K more than what it was.
They've completely ruined the garden, it's going to take some work to get it back to the same point.

Hopefully if you appeal the valuation or go with a new lender they may value it at 145k.

Unfortunately that's the nature of the market. We also didn't do anything in the 3 years that we lived in our house yet market movements meant it went for 60k more (and our next house was similarly also more expensive). It's frustrating because you can't see how the previous owner "deserves" more money for it but it doesn't change the fact that the market has moved on.

Good luck! I remember how exciting and scary it was to be an FTB

If there were 3 other bidders in guessing they’ll just go back to them or relist it. Market conditions have much more impact on valuation than anything they’ve done/not done with the house unfortunately

@Nanananani yep that's my thinking too, I really hope it doesn't happen but obviously there was lots of other interest. It sold in 5 days, I don't think they'd struggle to find another buyer however it's quite likely the same thing will happen regarding the valuation. So I guess they'd just have to hope another lender (potentially our alternative lender if it happens) values it higher or they have a buyer with lots of extra cash to play with 😣

I think you might need to try a different lender or ask some more details about the valuation (did they actually go into the house or was it a table top?). If you try another lender and have the same issue then you’ll be in a much stronger position to negotiate and you also won’t have lost the house.

Lots of people with be able to absorb that kind of gap in their LTV ratio from equity in their sale. If you love the house, worth a shot with another lender

"Down-valuations" seem to be a thing now, and that can only be a great thing for society in general.

Bet you are glad now that you didn`t buy it?

"Thing is, they bought it in late 2017 for 20K less than they're selling it for now."

A mere 20k increase in valuation since 2017 isn't much, given the market, unless the property has deteriorated. Property prices have on average gone up by around 10% in just the last year or so.

(averge house price in 2017 ws 227,00, now it is 278,000. That's an increase of about 22% if I have the maths right. So if your property went up by the same %, it would have gone from 130,000 to what- I think about 158,00? What they make or don't make in the sale isn't really relevant, but if I was you I wouldn't bring it up.....)

Our Mortgage advisor told us that surveyors are independent and tend to work the area they are in, rather than working for the lender, so it would seem likely you would get the same valuation with a different lender.
It has been happening a lot over the last 3 years or so as people got into bidding wars and got carried away on price.
If you think about it though, you have said how hot the market is where you are, and you got into a bidding war and they had other offers. Why do you think the vendors should accept your lower offer when they can get more from one of the other prospective buyers? I wouldn't. They have already agreed to compromise.

Is there no way of finding the extra? Borrowing from family? Not buying furniture you were planning to? Working a 2nd job each over the next 4 - 6 months it will take to go through ? Some combination of these? Borrowing from someone and paying it back quickly by getting a lodger? If you are able to do it, you'll look back in 3 years time and regret not doing so.

Totally different market, in a rising rate market you would have been selling for 60k less not more.

What level would base rate need to go to for all the "Do anything, borrow from family, borrow from your dog" ludicrous babble to stop, LOL. A house is a roof and some walls, most houses are not worth being shackled with multi-decade debt for the privilege of sitting inside them

DeadHouseBounce.

The young people I know who have being buying their first home in the last 3 years or so saved that sort of a difference by now only having to pay the mortgage, and not the rent payment for the next 12 - 18 months. Those that were lucky enough to have had someone to borrow that £5K difference from, which enabled them to buy their house, have then not had to continue with rent payments which were FAR more than their mortgage - so, over the space of 2 years they will have saved money (as well as being 2 years into paying off a mortgage and owning their own home).

If you feel buying your own home is "being shackled with a multi decade debt" then obviously you don't have to go down that route, but many people who think ahead realise that paying a mortgage for 25 (or 30) years is not only cheaper than rent, but it gives you a security of knowing you can stay there - which is HUGE, particularly when you have a family / school places etc. It also means that, once you get to the end of your mortgage, you own your home and not longer have to pay rent for the next 30 - 40 years of your life, many of which you will be retired and have a much smaller income.
No not everyone is privileged to have the choice, but I can understand why people who do have the option would be prepared to take out a mortgage of their own rather than paying someone else's.