Down valuation

[ZoomBroom]

We are selling a property to first time (cash) buyers, no chain on our part. Everything proceeding and we are a couple of weeks from exchange. Initially they weren’t going to bother with a survey but changed their minds on advice from their solicitor. Survey found no major issues but down valued the house by £40k. Now we are pretty late in the day with the sale and they want to renegotiate on price. I think it’s too late for that. It’s a great house but the market here is dead. WWYD?

They won't be able to pay more than the survey value if they have the majority on a mortgage so you either reduce the price or remarket in a slowing economy and hope the next valuation is higher.
You can't force a sale however close you are to exchange; it feels unfair to you as you'd expected a higher price but the buyer's position is the stronger one.

Surveyors often don't know the market and local area well enough to be accurate on value. Quite often they seem to travel in from 50+ miles away. I've even read stories of them popping into local EAs to help get advice on the value of the house.

What did their mortgage lender value the property at? That's the important thing.

From my experience they'll only ever tell you the true value if they think the house is worth less than you're asking to borrow, so they won't put a figure on it, they'll just approve the mortgage.

I suspect your buyers are probably scared at the valuation and the possibility of negative equity, but really, if the mortgage co have said 'fine, we'll lend you that', they don't really have too much to worry about, and they may just need a bit of reassurance.

Posters seem to be ignoring the fact that they’re cash buyers, so there’s no mortgage involved. I’d hold tight.

oopsie

need more coffee

Yes cash buyers. I understand the valuation is a bit scary but I think that’s they price we agreed.

@kweeble @KievLoverTwo the OP says they are cash buyers.

OP, difficult, as if you don’t sell to these cash buyers, most likely you’ll sell for less (falling market) to mortgaged buyers, who’ll get a valuation anyway which may not be in your favour.
Do some research on local sales, wax on about the positives, and aim to meet them halfway?

What is the agreed sale price? £40k is a bit arbitrary.

If you don't agree tell them no and go back on the market. You can't force them to possibly pay 40k more than they think it is worth just because its the price you agreed. It is now back to negotiations to be honest, but be prepared they may walk away.

We originally listed for 775, agreed 750, valuation has come in at 710

Isn’t it a bit shifty to do this so late in the day?

Ooo in the buyers position I'd want a bit knocked off tbh - 775 would have been overpriced if the valuation is 710! 750 is still quite high if they're saying 710, 40k is a lot of cash tbh.

Depends totally on the area and house though. It's not shifty if it's based on a valuation imo, they're not randomly just trying to save money, they're basing it on a report provided.

Is the market falling in your area? I'd try and negotiate and meet in the middle.

It sounds more like they're naive and unprepared rather than chancers wanting last minute money off. I'd really like to know where you find a cash buyer with 750k in the bank tho!!

I think it's quite normal for houses to sell 5% or more under asking at the moment, so the figures are sort of in line with that. I don't think you'll find a cash buyer with that amount of money again.

You're taking a considerable risk not agreeing. But why not try negotiating? Meet them in the middle, or somewhere thereabouts?

As a buyer, I would do exactly the same if they survey came back like that.

It’s about 5% less, so as a seller with a cash buyer, I’d take it. It could fall more. Property is only worth what someone will pay for it, so at the moment it’s worth £710k unless you can bump that up by negotiating or with another buyer.

But you will have your own priorities and may choose to wait for a higher offer.

Best of luck with your decision.

I'm not surprised they want to renegotiate in this market with prices falling and down valuations common. I would accept it because of the above if you want to sell. You say that market is 'dead' so what do you think you would get if you said no and re-marketed?

It's not shifty. They had a survey, it told them it's not worth more than £710. If the market is dead and they are true cash buyers snap their hands off. The next buyers might not be so good and they'll still not want to pay more than £710.

It's just business, you want as much as you can for the place, they want to get it for as little as they can.
If you're not prepared to make a deal on their terms then you'll have to find someone else who will accept your terms.

Maybe your asking price was shifty.

I'd offer them £725 and say you won't take less and if they don't want it at that price it goes back on to the market for £750. See what they say.

I’d listen to what they have to say and if there is any validity to the price drop

OP I'm not surprised - I bought a house last year valued at 480k, now according to the house price index it's worth 460k. Obviously the index might show different values in your area - could you check that and see if the valuation is accurate or if not, use that argument in the negotiations?

First time buyers with £750k in their piggy bank?! WTF?
Anyway, OP I’d be inclined to get a second opinion if that’s an option. Or meet them in the middle and suggest £730k final offer. No further negotiations.

Can any renegotiation be passed on? If you pull out you will break a chain. What has your survey said about the place you are buying?

We’re not buying anything and yes I agree we are lucky to have a buyer in such a good position. Just a bit miffed but everyone is right to point out that anything could happen if we re-list.

I would perhaps have it valued again by a couple of local estate agents and see what they say then you’re in a better position to negotiate with the buyers.