What to do when there's a down Valuation

[valuationworry]

Hi all, we've had a nightmare experience with the MetroBank despite going though a broker. They're due to come and carry out a valuation of the property we're trying to buy next Friday at lunchtime. I'm petrified because I've read that they're notorious for down valuing properties. Has anyone else heard of this? And what happens when this is the case- is it a case of pulling out of the purchase and trying another property or negotiating a price reduction with the seller? I know I'm jumping way ahead of myself but I just want to be prepared.

You have 3 options depending on your circumstances:

• reduce offer to match valuation
• put more cash up upfront to make up shortfall
• pull out

We’ve had the same with NatWest. They hugely downvalued it (by 25%). We managed to reduce the price of the house we are buying but not as much as NatWest valued it at as our private survey said it was worth more. NatWest won’t budge on price but we are trying to make it worth with them as tied in. We are now offering 10% of what they say it’s worth rather than 25% of what we offered and making up the difference - still no offer and this has been going on a month. Stress levels are high 😩

seems like you cannot afford it. why you still hoping?

I feel your pain Beach- we paid just slightly over asking. Our buyer has been waiting patiently for us for months and in we can't afford anymore than what we've said we'd paid. If there's a down valuation (seems likely) and the seller refuses to budge on agreed price then we'll have no option but to let the house go and look for another property. I think we'll risk losing our buyer in that case :( house has had extensive works carried out on it because of subsidence in the past- I wonder if that'll impact the valuation. Like you, I'm hardly sleeping and my hair is falling out. I feel like there's obstacle after obstacle on this one.

Option 1 and 3 is what we'll have to do. We're already maxing out on our purchase :(

@oiltrader i can afford it - if I couldn’t I wouldn’t be putting myself through the stress of it all. But the renegotiating with NatWest is painfully slow, everything takes 4 days to get an answer on.

@valuationworry its a new level of stress, try not to worry yet, fingers crossed it all works out for you!

Almost every house is getting downvalued, you might need to look at your budget if you bid over asking

To stop offering over asking price, if you can’t comfortably afford it, would be the new thing to do for mortgage buyers.

It's not the bank that are down valuing it, its the surveyor
Most bank use surveyors from a panel of firms who are entirely independent from the bank
The mortgage valuation is for their purposes
In certain areas there isn't a lot of coverage so even if you were to change lenders you could end up with the same surveying firm
Mortgage valuations are to confirm to the bank the property's suitability and wjether it would sell quickly and easily if they needed to take possession
Surveyors do have to use comparables to justify any valuation figures, with land registry still so far behind comparables showing the market price increase or hard to find and surveyors are aware that prices may start to come down

Or try a different mortgage lender

Pointless nasty dig.

they're being down valued at asking price too. 🙄🙄🙄

You can appeal.
or try to find a different mortgage company.

how can you? you said you cant add more cash for a deposit. the bank has decided what its worth

We had this. House valued at £150k less than we offered at. Buyers wouldn't budge as needed a quick sale and suggested we get a loan for the extra, instead of saying it's a mortgage. We declined, strangely enough.
House went back on the market and next buyer had the same issue.
Eventually, house price was reduced by £175k, 6 months later. Bonkers!

We used metrobank recently and they valued the house at what we offered. I think downvaluations are just common at the moment, it's happened to a few people I know.

Fingers crossed for you op

Thanks for this- very reassuring.

Can I ask how long it took from valuation to offer please?

It depends on your LTV as well. If you are buying with a 71% LTV and the value that comes back means that you are now buying with 75% LTV (based on bank valuation) and your product has a 75% limit on borrowing then it will likely be passed. If you move up a LTV band you may have to make a new application.

We were under asking and we’re down valued. Luckily we could make the difference but it was frustrating when it was a drive by valuation on a high spec house…we’d seen another local house, same size but not redecorated in 30 years and offered £150k less than we’re paying because that would have been the cost to bring it up to a modern standard! But from the outside the two properties were similar…

@valuationworry they were INCREDIBLY picky (nothing to do with the valuation!) it was a good couple of weeks. The stress it caused was ridiculous! I'd not recommend them again if it came to it but seeing as you're almost there, I genuinely hope the valuation comes back ok and it's smooth sailing from then on.

I'll DM you if you want me to go into more detail, I don't want to out myself!

Oh no- yes please re: DM. It's taken an age for us to get to this stage and I'm hoping they reward us with a quick turnaround. I don't think I'd be able to handle anymore stress.

This is worrying since this house is all done up and came with a price to match whereas the other houses that have sold locally have been in a bit of a sorry state and proved accordingly... :(

@oiltrader I think you’ve misunderstood my post. We are now offering a 10% deposit of the figure the bank valued the house at rather than a 25% deposit of what we offered originally (we have also re-negotiated the sale price to one that is cheaper than our original offer but more than the banks valuation - using the equity from our house sale to make the difference up the the sale price). NatWest obviously agree as we got our offer yesterday! But thanks for your concern!

Which is fine, I’m sure banks have a bit more experience with valuations than random estate agent who’s set the selling price, which is clearly to high. If bank would down value my asking price offer, I’d count myself lucky.

My place got downvalued by around 10%, which I was kind of expecting. We met in the middle after a bit of negotiation and I'm happy with that - saved a bit on stamp duty too.

Oh and that was with NatWest.