Paranoid bank will down value

[Constantlypanicking12]

Hi all. I’ve had a real bugger of a time trying to find a house. I bid on 10 and got none of them even though I always offered above asking. Anyway, I’ve finally had an offer accepted now. Was on for OIEO 270 and I got it for 287. Property prices have gone mad where I am (in Exeter, SW England). These houses are selling within days and all going to best and final offers with 5+ people offering. So I don’t think I had any option if I wanted to secure something. My deposit is 60k so LTV would be something like 78%. I’m getting really paranoid that it’s going to be downvalued by the bank though, as it was over asking and the market is, as I say, insane with people paying inflated rates.
What have your experiences been of this kind of thing? Are banks usually okay with it? Or are they tightening up their criteria. It’s a 2 bed period property if that helps.

Following with interest as I’m in a similar position. Offered 248,500 on a house marketed at offers over 240k. Zoopla estimates it to be worth 230,000 I think

Relieved I’m not the only one. Zoopla values mine at 274 max. I could put in another 5k or so I guess which will reduce the monthly payments but I’m stressing about this a bit.

Zoopla estimates are trailing the market by around 3 months, so I really wouldn't worry too much about its estimates being low or put too much stock in it.

Downvaluations are relatively rare so again, wouldn't worry too much - OP, your LTV is pretty good as well, that's a better deposit than most.

Remember that you only need the valuation to come in at the amount you are borrowing, not the full purchase price. So long as the bank value the property at 225k+ you will be fine - they are only interested in protecting their investment, not yours.

Thanks both of you - that is reassuring. Interesting to find out about zoopla being behind too. I think the prices have truly gone mad in the past few months - worse than during the stamp duty holiday. I will try to stay calm!

Remember that you only need the valuation to come in at the amount you are borrowing, not the full purchase price. So long as the bank value the property at 225k+ you will be fine - they are only interested in protecting their investment, not yours.

That’s not the whole story unfortunately. If you have applied for an e.g. 80% LTV product, if the bank doesn’t value it highly enough, then you’ll either need to put more deposit down or take out a higher LTV product which is usually more expensive.

@Porridgeislife

Remember that you only need the valuation to come in at the amount you are borrowing, not the full purchase price. So long as the bank value the property at 225k+ you will be fine - they are only interested in protecting their investment, not yours.

That’s not the whole story unfortunately. If you have applied for an e.g. 80% LTV product, if the bank doesn’t value it highly enough, then you’ll either need to put more deposit down or take out a higher LTV product which is usually more expensive.

Yes that’s what I was worried about. I can see it coming in at maybe 270k and at a push I could maybe reduce my borrowing to 220k by using the rest of my savings, which would be in the 85% bracket.

I wouldn’t worry too much at this stage. We had our onward purchase valued last week with no issues at all and we had gone to best & final bids. You’ve paid 6% over asking which isn’t really that outlandish.

Thanks @Porridgeislife! I will hope for the best. Pleased that you had no issues.

Yes, that's not much. Valuers really don't want to undervalues unless offers are really gratuitous and may be risky for the bank

We recently bought. Offered 5 k over asking. Bank had no issue with the valuation.
Try not to worry

We offered £12.5k over asking, the bank had no problem with the valuation. I think most houses are going over asking price now, tbh.

Good luck. It’s such a stressful time. I’ve lost so much sleep these past few months, I’m never moving again.

Thank you both! Yes I know what you mean about the stress! All the houses I offered on before this one went for at least 15-20k over. One went for 40k over. Will keep my fingers crossed.

@hannahcolobus

Bank under valuing isn't rare as someone above mentioned, in fact I've offered on a property this weekend and have to agree to the terms set out by the estate agent about what I'll do if/when it gets downvalued. It is actually much more common these days so I completely understand why you're a bit worried.

You just have to wait and see though, it's unlikely it would come back so low you have to pull out? You clearly have a good deposit so that will help.

Thank you! Yes I feared it wasn’t that rare too. The EA hasn’t mentioned anything about it though. I applied for a mortgage yesterday to secure a good rate even though the sellers are still looking for their new home. A free homebuyers survey is included in the package so at least I will find out early on about any downvaluing issues (or issues generally with the property) and can then decide what to do. I didn’t want to sit and wait for 2 months while they househunt and then find out about problems much further down the line. I do realise that obviously if I don’t complete in 6 months my offer expires but that’s a risk I will take to try to get a better rate (broker suspects BoE base rate will rise this week and lender in question is raising the rate for this product by 0.2% from today).

Ours was approved today. Significantly over what house is worth I'm sure but all approved ok

@Chakraleaf

Ours was approved today. Significantly over what house is worth I'm sure but all approved ok

Congratulations! Very pleased it went through with no issues.

I’ve just sold my late parents house
On the market for 395 it went for 415
No problems with the valuation and if needs 50k of work doing to it