Buyers want to reduce price

[nomorespaghetti]

Just looking for reassurance that this is reasonable really!

We put our house on for offers over 375k at the end of April. It's in a very popular area, and we've significantly improved it over the last 6 years. Got multiple offers, it went to best & final, and we chose an offer of 393k (second highest, most proceedable).

The buyers have now had a homebuyers survey with a valuation, and the surveyor valued the property at 370k. I don't think this should be wholly unexpected, as the buyers offered over to secure the property against multiple other bidders. As a gesture of good faith, we've said we'll accept 385k, and they need to let us know by end of business tomorrow, or we'll re-market. Hopefully we won't have too much trouble finding another buyer, as we had so much interest in it when it first went on.

We've had an offer accepted on another house, so if this sale falls apart it could affect that, but while we really like the house we are intending to purchase, we don't LOVE it, and wouldn't be heartbroken if it didn't work out (the seller is moving in with someone else, so no onward chain on that end).

Any advice?

if the house has been valued by mortgage company at 370 they won’t lend anymore than that. So unless your buyer has 15k cash to make up the difference then they are out

you might run into this problem again unless you go with a cash buyer or sometime with a massive deposit

It’s not a mortgage valuation, just one as part of the homebuyers survey. They have a big deposit according to the EA.

did they ask for a reduction? Was this purely on the valuation? Or for repairs too?

@nomorespaghetti Did your buyers ask for a reduction in price ?
Did the have a mortgage valuation on your property by the lender ?
If they have a large deposit and therefore only need a small loan to value the down valuation may not concern them in terms of borrowing the amount they need or they may foot the extra themselves from other funds .

Sorry, they did ask for a reduction to 375k. Missed that part out! This is based purely on the valuation, not repairs. They also want to have a damp report done (110 year old house, high damp readings but no visible damp), and I’m wondering if they’ll want another reduction based on that. There’s nothing else in the survey of concern.

If the mortgage company's valuer did not reduce the price then I'm not sure I would accept a reduction at all. What were your other "best and final" bids? If your buyer is unwilling to pay what they've offered, could you go back to one of them?

Was that the cost of rebuilding for insurance?

240k

The next lowest one was 385k, they were all 375-385k

It's totally irrelevant what the valuation is unless it's a mortgage valuation and has reduced the amount they can borrow and they can't top up with cash. Doesn't sound like that's the case here. I think you do need to be reasonable about the value of your house and whether they're really overpaying or if there are major issues that they couldn't have known about e.g. if your damp survey comes back with £50k needing to be spent. But this is about being realistic because if you call the buyer's bluff and they withdraw because they genuinely can't afford to absorb the cost you need to be confident you can sell to someone else at the higher price. Otherwise you're wasting your own time and legal fees. But if that's not the case here (which it doesn't sound like it is) sometimes you just need to stand firm. Buyers can try to get money off for all sorts, sometimes it's fair and sometimes it isn't. Sounds like you have been more accommodating than I would have been!

@SausageAndCash May I ask why this is important?

Point them in the direction of the SPAB. Old houses need to breathe and standard damp surveys are useless.
Thus book is also very good. smile.amazon.co.uk/dp/0857332848/

Because there seems to be a bit of confusion around the status of this report wrt valuation.

I don't think my Homebuyers reports have offered a market valuation - and it doesn't seem to be the mortgage valuation.

However I have known the survey give a figure for a rebuild , to be used to inform buildings insurance etc, and this would be much lower than the market value, and therefore not relevant to any negotiations to reduce the price.

Are you certain it isn’t the mortgage valuation? It’s highly irregular for a homebuyer survey to provide a (pointless) valuation when this is very much for the mortgage company to do.

My MIL’s house went to best and final offers. Two weeks later the winning buyer said they wanted to reduce the offer. Our estate agent gave them a roasting- told them best and final offers was non negotiable and if they were going to start playing games the house would be offered to the next person. Suddenly they found the money.

Be ruthless OP. You're in a strong position you're not beholden to them and this wasn't even the highest offer. Unfortunately a lot of seemingly Proceedable buyers end up not being so for an infinite number of reasons. People always want to make it appear they'll be able to move quicker than anyone else. Stick to your guns.

I had a homebuyers done in January with Halifax. The homebuyers was made up of 2 parts; the valuation and the survey, so it depends if they have instructed the surveyor through their mortgage provider, as if they have they will do the valuation and survey in one visit.
If they have instructed an independent surveyor to carry put the homebuyers then obvioueky their valuation will not be looked at by the mortgage company, as they will send their own surveyor to do the valuation part.

It’s a Sellers market! Stick your guns. I think you’ve been far too nice already especially when it’s not a mortgage valuation. Ours came £100k under 😱but we have a large enough deposit to proceed and we know there’s nothing else to buy. Give them an ultimatum and sell again if needed

Our homebuyer report suggested a valuation £15000 less than we offered so we met in the middle. I think it's quite normal for them to comment on value.

Tbh when we were looking over the last few months other buyers were offering crazy amounts over asking. Even the EA said the banks would not value at that price so I'm pretty sure some will sell for less because some buyers are just overbidding to secure something.

Ours came £100k under 😱but we have a large enough deposit to proceed and we know there’s nothing else to buy.

That's brave!

Thanks all! Maybe we have been to hasty offering to go to 385… but to be honest I just want to get on with things now. Definitely not going a penny lower though, no matter what the damp survey comes back with! They sent us a copy of the survey, and apart from the usual check for certification stuff, the only thing of note on there was the higher than average damp… which in a Victorian house in Manchester I think is not unexpected! It’s a great house in a really highly sought-after area, catchment for outstanding schools, blah blah blah. It won’t be hard to sell it again! Anyway, I’m ranting. They can let us know by the end of the day if they’re going to proceed.

You’ve done the right thing - very cheeky to knowingly offer over to secure the house and then reduce based on a Homebuyers valuation.

when we offered over for our house the EA asked at the time of offer “could you afford to make up the difference if it’s downvalued by the mortgage company?”. This is vital information that sellers need to know - I know that’s not exactly the issue here but when you offer over you KNOW you’re blurring the line between how much you want it and how much it’s worth. Unfair to gazunder later.

Good luck. Let us know how you get on.

@boardey yes I know 😬 we are very fortunate we can afford it and no risk of negative equity.