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?

How confident are YOU in the sales price, and what was the surveyor basing his value on? I once had a house devalued by a surveyor, and the estate agent warned me of this as it was a bidding war and it went over asking price. The reason the surveyor did valued was that it was selling at a price higher that many other in the street, including those with an extra bedroom. But line was newly renovated. We did compromise (they were getting a mortgage), and ending up selling g at original asking price, which was above the valuation.
So if you agreed price is in line with similar sold prices in your area hold firm. If it's higher , or in worse condition, then you might knock a bit off.

Surely you would have the same problem with the next buyers when they get a survey and it's down valued and they are like to be with a mortgage so won't be able to complete unless you lower price, I'd bite a cash buyers hand off in the current market with mortgages being withdrawn at a constant rate

Have they instructed a survey (condition report) or a valuation?

It was both - survey with valuation. Survey didn’t show anything terrible apparently

It’s a tough market. I had my heart set on a property, but have walked away as the market in uncertain. I’m your position, I’d meet in the middle. Great position to have a cash buyer. The market will inevitably slow over summer, rates will rise, prices will fall. You may face the same issue with the next buyer. Sell now.

The validity is that the house was surveyed at a lower price. They're not asking to lower it just because.

Ouch. What an absolute PITA. But cash buyers, almost ready to exchange, down valued by independent party? I'd hope to meet them in the middle at 730, but in reality probably be prepared to come all the way down to 710. Sorry.

Have you seen the valuation? Can they buy something similar for less? Do they have other options?

I would say no and see what they say

They are invested too if they have spent thousands and wasted months.

It's all a game

40k is only about 5% of the purchase price.

I expect if you got 3 different surveyors to survey it it would probably vary by more than that. House prices have a significant subjective component. It sounds a lot of money, but really you should be looking at the variation in % terms of the total price, not the actual amount.

I assume that if they have had a survey done they must be ok with buying it at the right price, so it's just a matter of striking a deal. No one wants to overpay for something, just as no one wants to sell something for less that its worth. There's a middle ground between those two points.

The inherent value of property is very low. The property market is solely based on how much premium someone will pay over this. The media is full of stories of the average property value decreasing, but every property is a unique market and I can see locally that some properties are still increasing/holding firm.

Only you can decide whether:

• Your property's value is tracking the average
• Whether you're prepared to take a lower amount for it

If Exchange hasn't happened then it's not too late to renegotiate. I know it's not popular, but this is why I always maintain that a property should never be taken off the market before Exchange.

If they want to renegotiate, you need to be instructing your EA to re-list the property today (tomorrow morning at the latest, you want people reading the listing over the weekend).

How hardball do you want to play it?

I think it depends on how desperate you are to sell and how much it would affect your plans to buy? I have SSTC to a cash buyer too and hope they don't do this as I couldnt proceed with my forwarding purchase unless they reduced by the same amount.

It’s really tricky. As I say this particular house is great, but nothing is selling at the moment so I don’t know how many other buyers there are out there. I think they’re very keen to proceed.

Do you have a plan for the money you make?

We will buy another house but not immediately as we’re relocating overseas

Annoying as fuck they've left it close to exchange to fart about with surveys etc 🙄 But I can understand why the buyers would want to renegotiate now, seeing the 710k on paper. Personally I certainly would NOT automatically drop to that because what if the valuer is simply wrong!?

Surely you have a good idea on the value. What is selling around you? Is the 710k more like it, or the 750k? Did you have a lot of other interest before agreeing your sale? If you remarketed at £730k do you feel it would it be snapped up? What's the local agents saying?

I think either way I'd offer to drop a bit to show willing, and depending on above come down accordingly. You say the market is dead, so bear that in mind. Hard one as nobody wants to feel they've had the rug pulled, but it's a bit of a buyers market atm.

Meet them in the middle, bird in the hand is totally worth having in this market.

Even as a cash buyer 40k dv would worry me. Is it a small % of the value?

Not sure how it can be shifty, they had a survey & want to renegotiate. Quite standard

No idea how much interest there would be if we remarketed. There was a fair amount of interest but very few viewers were actually proceedable and we accepted their offer before having any others.

I only thought it was shifty because it was so late in the process

How late in the process are you? People try this stuff on even on the day of exchange 🤷‍♀️

We pulled out of our purchase today because it was down valued (by a whopping 100k) and the vendors wouldn't budge. We still offered to meet them half way but they were obstinate. I looked at it as, I could use 100k to pay uni fees or weddings etc for my kids. I would overpay by a bit, but it is pretty shocking when you agree a price and the both mortgage and independent valuation come in 100k+ different!

£750k FTBs. Jesus.

Did the mummy and daddy come to viewings?

I would be keeping a close eye on that place to see what it eventually sells for @MamaSharkington
lots of people seem to think the interests rate will revert to the very low rates which they have come to think of as normal, historically the norm is more like 5%

It's only late because they decided late to get the survey. They survey could have come in with a higher valuation. They haven't gone out to shaft you at the late stages. The valuation has come in with the valuation. Not them. You are getting emotionally charged and creating a narrative that just isn't there. Put yourself in their shoes. Had you got a valuation that much lower than the price would you have merrily stumped up? I don't think anyone with any financial sense would.