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Original poster

Help! Downvaluation on our house

88 replies

bigbird1234 · 27/10/2023 16:22

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!

OP posts:
Original poster
bigbird1234 · 27/10/2023 16:54

It's one of the big five

OP posts:
cultureplanet · 27/10/2023 16:55

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…

How long have you lived there op? How long was your property on the market before you received this offer?

cultureplanet · 27/10/2023 16:55

bigbird1234 · 27/10/2023 16:54

It's one of the big five

Ok in that case - your hands are tied really

Original poster
bigbird1234 · 27/10/2023 16:58

New to this so not sure how to reply to specific messages! We've lived here since 2013 and it was on the market for 2 months. We had a few other viewings other than this one

OP posts:
cakepip · 27/10/2023 17:03

This happened to us as buyers, there are 3 options:

  1. you drop the price
  2. you hold firm on the price
  3. you meet somewhere in the middle.

It's likely your buyers will now be concerned they are overpaying if you try 2 or 3, ultimately it will come down to how much you want to sell, and how much they want to buy.

I'm sorry, it's so stressful.

BlinkerGoBlink · 27/10/2023 17:03

When we remortgaged we were down valued but we appealed to mortgage company to do an in-person valuation. When they did that we broke the ceiling price due to renovations including extension. It wasn't a lengthy process - took maybe 2 weeks. Worth a shot as if yours is worth so much more it may just not be fitting into the mortgage lenders maths for the area.

BlinkerGoBlink · 27/10/2023 17:05

Per @cakepip 's list and my experience, I would add;

4 - ask buyers to request in-person mortgage valuation from lender.

cakepip · 27/10/2023 17:07

@BlinkerGoBlink yes that's true, sorry I assumed that had already been done.

cultureplanet · 27/10/2023 17:07

bigbird1234 · 27/10/2023 16:58

New to this so not sure how to reply to specific messages! We've lived here since 2013 and it was on the market for 2 months. We had a few other viewings other than this one

Edited

So they offered £535k and you accepted. Now down values to £460k
what was the asking price?

two months on the market. No other offers?

whys your dh’s rationale for thinking that you’ll put back on market and get another offer no problem?

topnoddy · 27/10/2023 17:10

I think that maybe they are stretching the truth somewhat .

How much is your house worth at the moment compared to them wanting to drop the offer by 75K ? Because most houses have dropped in value in the last 3 or so months

Palmasailor · 27/10/2023 17:11

We’re heading into Xmas and the market dies.

If they’re actually prepared to pay 75k less I’d be tempted to take it. I can only see things getting worse for the foreseeable future.

Original poster
bigbird1234 · 27/10/2023 17:11

@BlinkerGoBlink The lender has refused and will not budge - they have said they are sticking by their verdict

@cultureplanet yep, good maths! We put it up for £545k

OP posts:
GasPanic · 27/10/2023 17:13

I would have thought it hard for mortgaged buyers to suddenly find another 40k out of nowhere. Cash buyer maybe.

The real question is, is the revised price enough for you to get the property you want where you want to move to ? Without answering this question, surely you can't figure out whether the transaction can work for you in any way.

Lakeyloo · 27/10/2023 17:13

Surveyors will use recently sold comparable properties to value your house. £150k - 200k over the nearest example sounds like a lot of money, even with an extension and especially in a slowing market, which will probably get quieter as we get nearer to Christmas. They generally won't take into account how nicely something is decorated, it's about the bricks and mortar, kitchen, central heating, roof, windows, bathroom, etc and even then its not whether they were super expensive or not.
You can't guarantee that the next buyer won't be using the same lender/surveyors.
You could put it back on the market and end up having to take a lower offer.
Your agent could do some leg work and come up with evidence to prove their valuation is right (would need to be examples of recently sold houses, not under offer) Some lenders will re-evaluate but it's definitely not guaranteed and your buyers might be too spooked by now to pay more than the original mortgage valuation.
Tough one but a bird in the hand if you can afford it.

MimiSunshine · 27/10/2023 17:14

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…

In that case I would accept that the bank is right.
as your house isn’t like any other nearby due to the changes then as you say, it’s hard to know what it’s worth. So the agents valuation was at best, an educated guess. At worst, a hopeful one.

now you do know that it’s worth a more conservative valuation than the agents wanted to achieve. It doesn’t sound like you’re really losing out, just not making as much as you had been allowed to get excited by.

accept the new reality and get on with your move and new chapter.

Original poster
bigbird1234 · 27/10/2023 17:14

We were hoping to rent to begin with while we find our feet so it's not a problem in terms of a chain. They aren't in a chain either

OP posts:
cultureplanet · 27/10/2023 17:15

bigbird1234 · 27/10/2023 17:14

We were hoping to rent to begin with while we find our feet so it's not a problem in terms of a chain. They aren't in a chain either

Have they come back with an offer?

loseweightpleasegod · 27/10/2023 17:16

If your in no rush put it back on the market.

Barleysugar86 · 27/10/2023 17:27

Surely if they are downvalued the difference comes out of their deposit and the mortgage company considers them to be lower deposit mortgagees. Have you asked what the minimum deposit their mortgage company will accept is?

Because I don't believe they can't pay some of the difference out of their deposit. I would be more inclined to deal with them if they said this is the maximum we could now do and its just the last £20k or £30k they can't make.

Clearly you both thought it was a fair offer when you agreed it and you likely both have a good feel for the real amount things sell for.

We are in London and have been downvalued before, its quite common, they are cautious I find, more so than the market is. I think they definitely err lower than real value for mortgages.

LovelyGreenCushions · 27/10/2023 17:28

cakepip · 27/10/2023 17:03

This happened to us as buyers, there are 3 options:

  1. you drop the price
  2. you hold firm on the price
  3. you meet somewhere in the middle.

It's likely your buyers will now be concerned they are overpaying if you try 2 or 3, ultimately it will come down to how much you want to sell, and how much they want to buy.

I'm sorry, it's so stressful.

Other option and should always be number 1 :
They supported by the agent go back to. the valuer and renegotiate
The valuers very frequently can be persuaded to change.

Original poster
bigbird1234 · 27/10/2023 17:28

@cultureplanet Not yet...and DH and I are at loggerheads about what to do now! I am leaning towards 'bird in the hand' option, as we'd be right back to square 1 on the sale, at a time when prices are dropping.

Slightly feel like we've been sold a dream by an estate agent who didn't know what they were talking about!

DH having a hard time coming to terms with such a substantial reduction - which I understand but we haven't lost money! We've just not made as much as we'd hoped!

Our only other option is to the buyer to get another opinion - we could offer to split the cost...

OP posts:
cultureplanet · 27/10/2023 17:29

They’d be a fool to split down the middle

Original poster
bigbird1234 · 27/10/2023 17:30

LovelyGreenCushions · 27/10/2023 17:28

Other option and should always be number 1 :
They supported by the agent go back to. the valuer and renegotiate
The valuers very frequently can be persuaded to change.

Show quote history

Valuer won't budge apparently 😖

OP posts:
Original poster
bigbird1234 · 27/10/2023 17:33

Barleysugar86 · 27/10/2023 17:27

Surely if they are downvalued the difference comes out of their deposit and the mortgage company considers them to be lower deposit mortgagees. Have you asked what the minimum deposit their mortgage company will accept is?

Because I don't believe they can't pay some of the difference out of their deposit. I would be more inclined to deal with them if they said this is the maximum we could now do and its just the last £20k or £30k they can't make.

Clearly you both thought it was a fair offer when you agreed it and you likely both have a good feel for the real amount things sell for.

We are in London and have been downvalued before, its quite common, they are cautious I find, more so than the market is. I think they definitely err lower than real value for mortgages.

They are saying they have completely used up all funds to meet our counteroffer of £535k in the initial negotiation. It's a pretty hefty deposit, well over £100k.

OP posts:
TheSugarcubes · 27/10/2023 17:33

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

Weird response to what I wrote.

As is clear in my post I asked if the estate agent agreed the value could have dropped by 75k to see if there was likely to be any truth to their claim of valuation. I also said she should ask to see evidence of the valuation.

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