Mortgage lender devalued house we are buying by 30k

[foodiefil]

Eep!

We offered asking price on a gorgeous property in our local area. £350,000 which is expensive for the area but after doing our current property up from it having a bird sanctuary in the loft to our beautiful home as it is today we wanted our next property to be a bit easier and it would be.

The couple have renovated it as if it was their forever home and have spent a lot on it in the last couple of years, it’s clear to see that. Now they’re moving away.

we offered asking price as we wanted it and I didn’t want to mess around (them or us).

now our lender has valued it at 30k less.

we are having another lender value it but from a brief conversation with the EA yesterday it didn’t sound like seller would budge.

even though we love it I don’t think I’m prepared to pay £30k beyond its value and take that financial risk in case our circumstances change.
i understand that they’re trying to claw back as much of their investment in the property as possible.

if second valuation comes back the same - what would you offer?

we have a buyer for ours, we are ready to go but won’t pay an inflated price for a property that isn’t worth what the buyers hope it’s worth.

we would add on an amount to cover some additional things included in the property price as it stands (oven etc).

any advice or similar experiences gratefully received

Banks will be down valuing for the next few months. The markets were shaky the other day and the chancellor is going to look for ways to take more money from you.

Ask the estate agent again to point out all buyers are likely to have a lower value made on the property.

This happened with us but for a bit more than £30k. Sellers wouldn't budge and we had buyers for ours. In the end, we went ahead. We could still afford it and our plan was (is) for it to be our home for the next 20+ years and I know in 20 years, the difference won't matter. I'm glad we did.

I think if it's your forever home, you should consider taking the risk. For us, pretty much only a marital separation in the next few years after purchase would have forced us to sell, and although you can never be sure, we were as sure as we could be that that was unlikely to happen.

Also, after our purchase, another neighbouring house sold for a similar amount. So our purchase likely bumped their valuation up, as I believe they consider past purchases for similar houses for their valuations.

It's a down valuation, doesn't mean the house is worth £30k less. It just means a risk averse surveyor did the valuation. It's a common problem in the mortgage market. I had a sale fall through once where the buyer' lender down valued. The following year I sold it for about 15k more than that down valuation. If you can't get your seller to drop, and if you can't arrange finance, sadly the purchase will fall thru.

No way would I pay over 2020 valuations in this market. Interest rates have increased fivefold since and unemployment and insolvencies are on the rise. Renovations rarely feed into a materially higher sale price in any case, except for a doer upper.

I think in this situation normal practice is normally to try and meet in the middle. The sellers may be reluctant to do this but in reality they may as well if they want to sell their property because the down valuation could well happen again with new buyers. So they may have to face facts that they can't get the price they hoped for their property.

I’ve been in this situation.

Mortgage company and homebuyers survey valuation both had it lower than asking/offer price.

The vendor absolutely refused to negotiate. Threw it back on the market within five minutes.

I was DELIGHTED when it didn’t sell again for a year, and they eventually had to keep dropping the price.

I think you would be very unwise to pay more than the lenders's valuations in the current economic climate. The foundations look extremely shaky. Some lenders are being more cautious for good reason. New kitchens, etc won't add as much to value as more space and an extra bedroom.
The sellers wanting to recoup their money is totally irrelevant to you. They may well be forced to be realistic and lower the price if lenders are valuing lower. Don't be the mug that throws away 30k.

When i bought a property many years ago it was valued by the mortgage lender below the asking price and the building society said it was not uncommon abd reflected what they would be guaranteed tobe able to sell.it for it I defaulted.
Akthough they advanced tbe sum I wanted I had to take an insurance policy to cover difference in the event of a default.

(This was a long, long time ago. I think James IV was on tbe stamps)

What did your survey value it as? How long had it been on the market? Did the mortgage value it from their computer or seeing it? If from computer they'll have assumed bang on average decor and people will pay more for gorgeous new kitchen bathroom etc

We haven’t had our own survey done yet. It was on the market approx a month. It was a computer/desktop valuation yes