Renegotiating purchase price after mortgage valuation

[CatLadyP]

We're buying a house at £425k, offer accepted about a month ago. Everything is progressing well, however we got our mortgage approval through and the lender valued it at £389k, so a £36k difference.

Having checked, it was most likely a desktop valuation because they didn't request access to the house, but the lender won't provide any further details as it was a free valuation. The mortgage was approved anyway as we've got a large deposit, so the lender isn't bothered, and it didn't affect the rate offered.

The estate agent reckons that £389k is far too low (of course) and doesn't take into account the actual condition of the house as they didn't look inside. They've got a point and to be fair, we agree that £389k is a low valuation (which I understand is fairly common).

However, in the past couple of weeks we have seen two very similar houses come onto the market at around £395k, one of them in the same street. These houses are the same type of construction and size. Both look to be in good decorative order, though not quite as modernised as the one we're buying. They both have bigger gardens and driveways though... I'm not sure how much value that generally adds.

So we're thinking to ask the EA to contact the seller and request a reduction in price. Has anyone done similar and got any tips for success? We really like the house and we'd like to get moving and avoid any further stress and hassle, but ultimately if we could potentially buy one of the other houses at £30k less, even if we spent £30k modernising to our own chosen standard (which wouldn't even be necessary) we'd be in the same position financially but have a larger garden and more parking space.

Thanks!

Nothing to stop you trying to negotiate. But be prepared to potentially lose the house.
Get a level 2 survey done and see if anything crops up that can negotiated upon? That might give you a better negotiating position than just saying that a similar house is cheaper, especially at that price point. - a bit like comparing sandals from Asda to sandals from jimmy choo. Iyswim.

We intend to have a full building survey, but I suppose it might be worth having an independent valuation at the same time?

We don't want to lose the house, but at the same time I think I'd rather lose it than pay £30k more than it's worth.

I don't think the seller is likely to get £425k from another buyer given the other houses being available... depends how much they want to risk it I suppose.

Yep the risk goes both ways. I don’t know about independent valuations, threads on MN seem to imply that valuers ‘work’ in tandem and pool knowledge of the areas they work in. - I have no idea if that’s true or not. But if an independent valuer looked inside the house and saw what there is, there is every possibility that may sway things. Wether the mortgage provider would accept their findings is another thing to consider - they are trying to protect their money if you fail to pay.
ultimately, it comes down to how much do you want to pay for the house and what the vendor wants, being the same amount. If you do not mind losing the house- you have nothing to lose by trying to negotiate the price.

Hmm... I might speak to the EA and see if they can back up their valuation, I can't see how based on my own research but then I'm no expert.

Fortunately it doesn't matter what the mortgage provider thinks at this point as they approved the mortgage with the lower valuation anyway.

Thanks