Lender downvaluation - What to do?

[MammaDramaLlama]

We just got our mortgage offer for the amount requested. However, the lender valuation has come back 100k lower than agreed sale price which is around 7% of the purchase price. The valuation states that there has been historic movement and wear and tear and the valuation reflects current market conditions.

We have our survey booked for next week but are now worried that we will be over paying. Should we wait for the survey outcome to go back and re-negotiate or let the EA know tomorrow? How accurate is the lender valuation?

Can you still afford the house? I wouldn't worry in terms of house valuation, 7% seems within margin of error and also, all houses might be currently overpriced according to valuations.

It depends how much you want the house, and if you can afford it given what the lender will lend you. And probably how long you’d stay there too.

If you really want it, can afford it and will stay a long time, I wouldn’t worry about overpaying now as the house will go up in value long term and you won’t lose out too much.

Buyers do sometimes try to renegotiate in these circumstances, but if the sellers have other buyers lined up then they could withdraw if you ask them to drop the price.

FWIW when I sold my last place it was downvalued slightly (there was a bidding war and it was a seller’s market). I agreed a slightly lower price with the buyer, so in a way we both absorbed some of the cost of the down valuation. If a property has been downvalued, a seller has to know they will only get that price if they get a cash buyer or one with a huge deposit.

I would go back and re adjust your offer price.No one can afford to throw away that much money.A few thousand pounds under is one thing but £100 000 to over pay beyond so called estate agent valuation is ridiculous.
Do this before you waste any more money on fees etc.

It depends. How much do you want this house, how many others might come along that you would also want and to what extent is this a commercial purchase? I probably wouldn’t buy it (at the agreed price) but then I tend to view property purchases through a very commercial lens (which isn’t always the best strategy).

What do you want to do? Are you happy to overpay by 100k or do you want to try to renegotiate? Are you willing to walk away if they say no?
I wouldn't want to overpay by such a huge amount in the current market but you might be content to do so.
If you are not willing to pay, I would tell the agent. If you do go ahead with the survey, you should have more evidence on which to base your renegotiation.

If you still like the home then get the survey done to see how that lands.

Work out the maximum price that you would feel comfortable paying - and disappointed if someone beat you by offering, say, £1000 more.

Remember that while prices will typically be higher in 25 years time it is not unknown for the price to not recover for 20+ years if you overpay. You should be sure that you are comfortable in this worst case scenario.

100k in this climate? I wouldn't be paying over the odds.

7% is £100k?

So your buying a house for £1,428,571?

So just shy of a million and a half pound?

If you cannot afford £100k then you simply cannot afford a millionaire house really (which is fine, most of us could not) but anyone buying million + houses should have fairly hefty contingencies or you will find yourself in debt fast. Its not just buying a house they cost a hell of a lot to run and maintain (the bigger and more expensive then the more they cost) and having to drop 7% at a moments notice is pretty common if say your heating packs in or roof goes etc...

As for it being 7% is well within the standard 10% reduction margin so not unusual level of reduction.

No go back and renegotiate. Why on earth are you even considering overpaying in today’s market. Absurd. Yes house prices do go up over time but it may take you welll over a decade or even 2, to make up that difference in current market conditions