Help! Downvaluation on our house

bigbird1234 · 2023-10-27T15:22:10+00:00

We are trying to sell our house (large 4 bed semi) because we want to move closer to family in another city. We had accepted an offer slightly below asking price and things were progressing well. However, now the buyer has now been in touch to say they have had a £75k down-valuation from their mortgage provider, meaning that they wont be able to get enough funds. What do we do? They are saying they can't consider another lender as the rates are not affordable for them elsewhere and they can't raise the cash shortfall. Do we stand firm to original price and risk losing the sale? With house prices dropping, my fear is that we'll lose out on this offer and that most buyers will come up against the same barrier (they have a decent deposit so that isnt the problem). DH says we will be able to find another buyer but I am less sure... Advice please!

TheNoonBell · 27/10/2023 16:25

Is that 75k a big percentage?

UsingChangeofName · 27/10/2023 16:27

£75K seems a HUGE difference between offer and valuation.
Although, as NoonBell says, I suppose it depends on what the total is.

As to what you should do - as with every transaction, it depends on what you can afford to do and how much you need to move now.

TheSugarcubes · 27/10/2023 16:30

If it is worth 75k less than the offer that will probably be all you will get for it from anybody at the moment. Have you seen evidence that it has been valued at 75k less than the agreed offer? Does your estate agent agree with this new valuation given the market?

cultureplanet · 27/10/2023 16:33

Ask estate agent to go back and say you need to see written evidence that this is indeed the case

and if it is, and from one of the big 5, then I would accept that I have to lower very substantially

what percentage does £75k rep?

cultureplanet · 27/10/2023 16:34

You can gather evidence to contradict the view (presuming there is intact evidence to indicate that wrong) eg what neighbouring properties have very recently sold for

Janieforever · 27/10/2023 16:35

Holding firm is pointless, I am not sure why you’re asking that, the mortgage company has said it’s not worth the price, so no one will pay 75 k more, and the current buyer has said they can’t afford it as they can’t get the mortgage now.

there is no holding firm. And the buyer is gone. Unless you reduce to the valuation.

cultureplanet · 27/10/2023 16:35

What does your agent suggest?

how long was your property on the market before you had this offer?

rainingsnoring · 27/10/2023 16:35

As the others have said, what percentage of the agreed sale price is 75K?

Have you seen paperwork confirming the mortgage valuation?

It's a bit of a gamble which depends on lots of factors such as:
How well properties are selling in your area
How desirable your home is (was it easy to sell before?)
How much you need to be able to continue with your onward purchase
How desperate you are to move
How much of a hurry you are in

It sounds as if you will probably lose the sale if you refuse to negotiate but could you have a discussion about meeting somewhere in the middle?
You are correct that the housing market is falling and that lenders have tightened up on lending, neither of which work in your favour at present.

If it were me, I would probably try to negotiate given all factors.

cultureplanet · 27/10/2023 16:36

You don’t say whether you have had an offer accepted in the new city?

Janieforever · 27/10/2023 16:37

TheSugarcubes · 27/10/2023 16:30

If it is worth 75k less than the offer that will probably be all you will get for it from anybody at the moment. Have you seen evidence that it has been valued at 75k less than the agreed offer? Does your estate agent agree with this new valuation given the market?

The estate agent doesn’t need to agree, the agent is irrelevant at this point, the mortgage provider has it valued and that’s it, they don’t ask opinion from the agent.

the only other option is another lender but buyer is saying no, it’s over. There is no way round it, it’s either drop the 75 or go back on the market and see if someone else will pay that and their mortgage company value higher.

TeenLifeMum · 27/10/2023 16:37

Firstly request proof of the valuation amount before you’ll consider any amendment to the purchase price (I bet they’ve over inflated it). Then consider what the market is like in your area and what you’re prepared to sell for to make the move viable.

cultureplanet · 27/10/2023 16:38

Janieforever · 27/10/2023 16:37

The estate agent doesn’t need to agree, the agent is irrelevant at this point, the mortgage provider has it valued and that’s it, they don’t ask opinion from the agent.

the only other option is another lender but buyer is saying no, it’s over. There is no way round it, it’s either drop the 75 or go back on the market and see if someone else will pay that and their mortgage company value higher.

Show quote history

PP wasn’t saying that the agent “had to agree”

PP was enquiring what the agents thoughts were

Janieforever · 27/10/2023 16:38

TeenLifeMum · 27/10/2023 16:37

Firstly request proof of the valuation amount before you’ll consider any amendment to the purchase price (I bet they’ve over inflated it). Then consider what the market is like in your area and what you’re prepared to sell for to make the move viable.

she won’t see proof. She can ask for it to be provided to her solicitor.

Janieforever · 27/10/2023 16:38

cultureplanet · 27/10/2023 16:38

PP wasn’t saying that the agent “had to agree”

PP was enquiring what the agents thoughts were

Show quote history

She specifically used the words does the agent agree. Like actually used those words!

TeenLifeMum · 27/10/2023 16:42

@Janieforever price negotiations are done via the estate agent not the solicitor and it’s perfectly reasonable to ask to see the valuation document. The buyer doesn’t have to agree, but you can ask.

In this market, houses are selling for less but, that doesn’t mean some buyers are being cheeky arseholes. These ones may be genuine but just because someone can’t afford a house doesn’t mean the seller should reduce the price. If the buyer could get the mortgage, they were willing to pay the price agreed so maybe others will. Depends on the market and urgency etc

cultureplanet · 27/10/2023 16:43

Janieforever · 27/10/2023 16:38

She specifically used the words does the agent agree. Like actually used those words!

Show quote history

Yes. Which is surely asking for thoughts “do you agree with mortgage company given any changes in the market since we accepted the offer”

not

“if the agent agrees, then accept the £75k reduction”

see the difference?

cultureplanet · 27/10/2023 16:45

Janieforever · 27/10/2023 16:38

she won’t see proof. She can ask for it to be provided to her solicitor.

Show quote history

What are you on about?

the agent goes back to buyer’s agent and said “Vendor would like sight of the valuation before responding”

Janieforever · 27/10/2023 16:45

TeenLifeMum · 27/10/2023 16:42

@Janieforever price negotiations are done via the estate agent not the solicitor and it’s perfectly reasonable to ask to see the valuation document. The buyer doesn’t have to agree, but you can ask.

In this market, houses are selling for less but, that doesn’t mean some buyers are being cheeky arseholes. These ones may be genuine but just because someone can’t afford a house doesn’t mean the seller should reduce the price. If the buyer could get the mortgage, they were willing to pay the price agreed so maybe others will. Depends on the market and urgency etc

Totally agree, and yes she should ask for evidence of valuation to be provided to her solicitor, either way it’s over though, the buyer was out. I am assuming they are being honest, but yes, they could be lying.

Yazoop · 27/10/2023 16:48

I had this situation but the other way around - we made an offer and our mortgage company down valued it significantly. It was not long after the first covid lockdown so at that time was an uncertain market (before it went crazy) - a bit like it is uncertain now.

we offered to split the difference - ie we put in more and the buyers reduced by same amount to meet in the middle. That might be a suggestion that to think about here if the circumstances are right (and both sides can afford to do it) - it means you get to sell but not take the whole 75k off (which is a large chunk of change) and they get some reassurance about interest rates, risks of negative equity etc.

unfortuately, this down valuation may not be limited to one lender at this time - things are uncertain and banks are cautious.

TeenLifeMum · 27/10/2023 16:48

@Janieforever following my previous moving experiences I’d guess they’re stretching the truth and the gap isn’t that significant. Happy to be wrong but my god people lie when buying houses.

Yazoop · 27/10/2023 16:49

Btw we sent our email from the lender to our estate agent to show the vendor as proof - this wouldn’t be hard for the buyers to do. Our downvaluation was around the same as OP - it does happen, especially in places like London where house prices are £££

cultureplanet · 27/10/2023 16:52

You don’t involve the solicitor in price negotiations! Can you imagine the bills you’d rack up.

negotiations are between the agents

cultureplanet · 27/10/2023 16:53

TeenLifeMum · 27/10/2023 16:48

@Janieforever following my previous moving experiences I’d guess they’re stretching the truth and the gap isn’t that significant. Happy to be wrong but my god people lie when buying houses.

They’ve been short sighted though

Not surprising to be asked to provide evidence in this scenario

Original poster

bigbird1234 · 27/10/2023 16:53

Thanks everyone for your replies. The estate agent has had it confirmed in writing so it looks legitimate - the provider doesn’t let us see the report but it has been confirmed by their broker.

It’s roughly a 14% drop from the agreed price.

We haven’t found a place to live yet in the new city but are keen to move quickly.

It’s hard to know what a fair price is - we have been going off what the estate agent told us it would go for. In comparison to other houses sold, we put it up for much higher (around £150k-200k more) but it is bigger and better (extension etc) so finding an exact comparison from recent year is very tricky!

However, even if we were to drop in line with the new offer, we would still have made around £100k on the property so it’s not all bad - but it’s hard not to feel deflated after what the agents thought we could get for it!

My worry is that the buyer has a decent deposit (25%) so I just see us getting to the same point again with another buyer…

OP posts:

cultureplanet · 27/10/2023 16:54

Is the mortgage company in question one of the main ones or more niche?