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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:
LovelyGreenCushions · 27/10/2023 17:34

bigbird1234 · 27/10/2023 17:30

Valuer won't budge apparently 😖

Show quote history

Well unless the agent has both seen the valuation and spoken to the valuer personally I would be very suspicious of that

Twiglets1 · 27/10/2023 17:53

I would at least try asking them to meet in the middle at 500k, say.

Appreciate they can't borrow any more but maybe they can raise the extra money through family or something? It's possible they can do that if the other choice is the house goes back on the market.

Another lender might value it higher, it's not an exact science.

TenderDandelions · 27/10/2023 17:55

Tell DH not to get caught up in "losing money". As you've pointed out, you've still made money over what you bought it for.

When I sold my last place, I sold it for £20k less than I'd bought it for. What people couldn't see was that I'd sold the property before that for £50k more than I'd bought that for, so I was still up by £30k.

It's a difficult decision to make though as you may find other buyers having the same issue. If time is on your side I'd be tempted to re-list it and see what happens. You may have the issue again, but if it's for a similar amount as what the current lender is saying, you won't have lost anything other than time. Hopefully you'd find a buyer that either has a better LTV ratio or has more cash.

Janieforever · 27/10/2023 18:03

Twiglets1 · 27/10/2023 17:53

I would at least try asking them to meet in the middle at 500k, say.

Appreciate they can't borrow any more but maybe they can raise the extra money through family or something? It's possible they can do that if the other choice is the house goes back on the market.

Another lender might value it higher, it's not an exact science.

They’d have to really love it to be paying 30 0r 49 grand more than it’s worth. Personally I think I’d pull out.

Mumsgirls · 27/10/2023 18:07

Estate agents will agree to anything to get the sale, when you drop they get a lower fee, but they knew that all along. Worked for a mortgage bank for years and saw this a lot. Just had it now and elderly mother won’t reduced because she believes the agent’s flannel, so house has sat there for months overpriced and without an offer

Hyperemesishell · 27/10/2023 18:11

Their deposit doesn’t give them enough for the mortgage company to be comfortable with the valuation which is half the problem here. If they were looking at 60% LTV for example, this wouldn’t be a problem - hence you COULD get another buyer willing to pay your asking price if they had a larger deposit. Essentially mortgage companies are looking to ensure they can recoup the mortgage funds if a client defaults. Which when your house has been over-valued AND they want a mortgage at a high LTV, the mortgage company cannot be confident they will achieve.

Twiglets1 · 27/10/2023 18:24

Janieforever · 27/10/2023 18:03

They’d have to really love it to be paying 30 0r 49 grand more than it’s worth. Personally I think I’d pull out.

Show quote history

A different valuer could value it higher and anyway, presumably they do really love it seeing as it's the house they chose to try to buy.

SlightlygrumpyBettyswaitress · 27/10/2023 18:43

If you haven't got an onwards purchase there is no way I would accept.
Put it back on the market. Carry on looking. If you find something perfect that makes accepting a lower seen sensible, then do it then.

TammyJones · 27/10/2023 18:53

SlightlygrumpyBettyswaitress · 27/10/2023 18:43

If you haven't got an onwards purchase there is no way I would accept.
Put it back on the market. Carry on looking. If you find something perfect that makes accepting a lower seen sensible, then do it then.

@SlightlygrumpyBettyswaitress
Agree
It's not been that long.

ActDottie · 27/10/2023 18:56

I’d want to see actual proof of the new valuation as it seems madness that the estate agent got the asking price do wrong.

HamstersAreMyLife · 27/10/2023 19:06

Aww that's hard. I have only experienced this as a buyer years ago and it was the first down valuation our bank manager had seen for years. We were only down a difference of £25k and offered to find an additional £15k from the renovation budget if they would come down £10k which was refused. We walked away as tbh the additional amount was a stretch and I was concerned we were overpaying. They sold 18m later for £30k less which was frustrating and odd as prices were seemingly stable but I have a suspicion that once the valuation was on record it affected other offers, perhaps the estate agents have to declare it, I've no idea.

topnoddy · 27/10/2023 19:27

How about getting a couple of estate agents to value the property and see what they come up with compared to the mortgage valuation .

Personally i'd tell the buyers thanks but no thanks and put the house back on the market

rainingsnoring · 27/10/2023 19:31

From your later posts, it appears that your agents were very over optimistic, which they do tend to be, of course.
A 150-200 uplift compared to slightly smaller houses is a pretty huge percentage.
Also, it is highly unlikely that any buyer will be able to suddenly find anywhere near the amount of money needed to make up the difference here.
If you want to move and plan to rent anyway, I would probably just accept rather than take the risk in this market.

Pepper12345 · 27/10/2023 19:52

I find it strange that they won't let you see the report.

We're selling at the moment and the buyers' mortgage company did a surgery and valuation. They were happy to send it on to us and we met the buyer on site to go through every item on the survey and agree what we would do and what we wouldn't before the sale. Luckily they agreed with the agreed sale price, which was a bit below the asking price (6%).

I'm not aware of any reason for the survey not to be shared so it might be worth saying you're willing to continue negotiations subject to them sharing the valuation just to see if it will get conversations started. I may of course be wrong.

Porkepic · 27/10/2023 20:14

Mumsgirls · 27/10/2023 18:07

Estate agents will agree to anything to get the sale, when you drop they get a lower fee, but they knew that all along. Worked for a mortgage bank for years and saw this a lot. Just had it now and elderly mother won’t reduced because she believes the agent’s flannel, so house has sat there for months overpriced and without an offer

Do you know if down valuation are linked to LTV as someone just posted, or does the bank just provide their valuation on the same basis regardless of the amount of deposit?

Porkepic · 27/10/2023 20:19

The negotiation route might work when the market is overall up since both parties know that time is against the buyer. But the opposite is true in a falling market, why would the buyer put themselves at potential loss especially when each month their futur purchase gets a bit cheaper with lower nominal price and strong inflation. Redundancy are just starting, this is going to get a lot worse before it gets better.

moonbeamsokay · 27/10/2023 20:24

Given the difference, it might be worth engaging your own surveyor to see if they agree with the downvaluation. Get someone independent - don't rely on your estate agent, or anyone they recommend.

If they think it's worth more, then consider remarketing it.

But if they more or less agree with the buyer's lender, then I'd say take the hit. You might find another buyer who doesn't need a mortgage and doesn't bother to get their own independent valuation, but it's unlikely.

Octavia64 · 27/10/2023 20:31

I have had this but from the buyers side a long time ago.

Mortgage valuer undervalued it by 20k (a lot of money in those days)

We got an independent valuer in to do it as well. Worth you trying? We really wanted to buy it and when the independent valuer came back at roughly the same figure we just had to walk away because we physically didn't have the extra cash.

moonbeamsokay · 27/10/2023 20:32

Sadly some larger estate agents are well known to overvalue to get business, and persuade you to reduce when it doesn't sell. Someone said (on MN? can't remember) that you should get at least three estate agents to value your property, and never pick the highest.

Dymaxion · 27/10/2023 20:46

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!

How much extra space has that extension actually given you ? How many extra rooms ? Have you gone from a three bed to a four/five ? Two reception rooms to three ? one bathroom to two and a cloakroom ? Or is the extension just a 'Family/lifestyle room' where you have extended out into the back garden to make a bigger living space ?

caringcarer · 27/10/2023 20:48

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…

Extensions never get their value back. If it's one of the big 5 lenders and they value it at £75k less. It's probably less worth than your EA thought. If you pulled out and another purchaser bought it you'd have the same problem because the big 5 lenders use the same pool of valuers. I'd try lowering by £70 and see if buyers can find £5k.

caringcarer · 27/10/2023 20:50

TenderDandelions · 27/10/2023 17:55

Tell DH not to get caught up in "losing money". As you've pointed out, you've still made money over what you bought it for.

When I sold my last place, I sold it for £20k less than I'd bought it for. What people couldn't see was that I'd sold the property before that for £50k more than I'd bought that for, so I was still up by £30k.

It's a difficult decision to make though as you may find other buyers having the same issue. If time is on your side I'd be tempted to re-list it and see what happens. You may have the issue again, but if it's for a similar amount as what the current lender is saying, you won't have lost anything other than time. Hopefully you'd find a buyer that either has a better LTV ratio or has more cash.

The thing many buyers don't have 25 percent deposit.

Housebuyingfamily · 27/10/2023 21:06

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…

Sounds like the old “best house on the street” trap. Salutary lesson (also to myself and others planning work) that valuers will still default to comparables with the same number of bedrooms in the local area, irrespective of how much nicer you’ve made yours.

Aldicrispsareshit · 27/10/2023 21:33

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

Depends if you're paying a fixed fee or not. Last time I bought a lot of conveyancing solicitors were doing fixed fee rates for the entire sale, queries and all.

YukoandHiro · 27/10/2023 21:37

Take it. EAs often over value at first as they're just testing the water.
Took us 18 months to sell (a year ago) and the difference between initial marketing price and actual sale was over £125k!

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