Mortgage valuation £25k below offer: worth paying for second valuation?

[StrawberryElephants]

We just put an offer on a house - over the bloody moon it was accepted. The house is chain free and vacant - we are first time buyers. The property was top end of budget at £350k but we honestly felt like after lots of looking around anyway- we had found a £370k house for an absolute steal.

However, the bank just did their valuation and listed it as £325k - £25k less than we offered. I am stunned. Estate agents are stunned. Bank obviously wont lend us the amount we requested because its not valued high enough.

The valuer said in their report that there wasn't enough evidence of similar properties selling for the same price nearby. It doesnt appear this way to us - but what do we know right!

I can pay £180 to have a second valuation done. The seller wont drop £25k off the asking (its inheritance for teenagers - sad situation, apparently they won't budge). Ive asked the estate agent to tell the sellers what happend and she suggested asking them to pay £90 (half each).

I guess what im actually asking is - any chance the valuer is wrong and have you had experience of having a property valued a second time round and getting a different awnser. Or - maybe it is what it is... Help 😪

Often depends on how many other offers there are.

What are you talking about?

If the seller has no other offers and wants to sell they might accept reality? If the OP gets another valuation it is likely to be lower as mortgage rates are rising fast.

You quoted one of my posts when making a point that had nothing to do with what I said ... strange.

He has a lot of cover just now, but sitting governments tend to get the blame for inflation etc. even although it is obvious they can"t control global events, they are all going to be forced out, maybe by an early election at some point?

The minimum the seller will accept is often flexible, in many cases it is just bluster, if they have no other offers they may see that their options are to take the lower offer or remain unsold, there are plenty of other properties the OP might like, the seller is stuck with their one property trying to sell.

Early election with a majority of 158 seats?!

Hi everyone - wanted to give you all an update... 2nd valuation has been done and it was put at £350k! So we are rocking and rolling ahead!

It also means we get to keep our mortgage rate that was agreed pre-war shit show - so it was the right choice to do what we have done!

Doing a happy little dance this morning 😃

Did the bank accept?

Good for you OP, well done

Brilliant news @StrawberryElephants

As I said earlier in the thread, valuations are subjective. Glad it has worked out for you.

Yes! 🥰 thank you x

And thanks to all who commented explaining about different bits and pieces. It was really appreciated.

delighted for you. And great you updated us.

Good result for you, good luck.

You must be very relieved. Well done and good luck in your future home!

We just had a valuation back from Santander. The surveyors valued the house at £100k less than what were paying for it. Yes thats not a typo 100k less!...we were shocked, estate agents were shocked!..The use a company called E SURV. Check the reviews on Google etcc...it will tell you all you need to know!...We've just paid the £180 for the second valuations through appeals process. They said they will use a completely different company on the second one. Im not very confident. We've lived in the area over 6 years and know what the properties are worth. Similar houses went for offers over 600k and a 3 bed semi went for 500k. The house were buying is a 4 bed detached at 550k.

Valuers talk out of their butts a lot of the time. We wanted to remortgage our house and the valuation came back £200k less than we expected. Four months later we tried again and it was valued at £250k more than previously (same mortgage company different Valuer). The house was around £2m but I can assure you the value didn’t jump like that in four months. No house had sold on the street or nearby that was equivalent in the intervening time. Two months later I actually sold it for more than higher valuation (my DH sadly having died suddenly right after the second valuation).
And surely the house is worth what someone is willing to pay? But banks are sticklers. I was selling a house and it went to a bidding war and both parties offered over the ask. But the agent warned me that the bank would not agree with the value they were offering (it did break the top price for any house sold on the street). But surely if TWO people were happy to pay X or more that IS the value? Didn’t make sense to me.

The lender is looking at future predictions for the market. How many other offers did the house get?

It might be the value if two people say it is, but they have to put up their own money to buy it, the lender is looking to the future when that might no longer be the value and they still want their mortgage debt paid back.

The lenders are very conservative over the value because they want to be sure they could get all their money back if they had to repossess.

Buyers aren't always so cautious because most will be seeing it as a family home foremost rather than an investment.

True, and you can offer what you like in all the excitement of wanting to "secure" the house, but unless you have the cash to make up the difference in a "down-valuation" either the seller drops their price or you ain"t buying that house.

Valuers have to be cautious and will value down if they think there is any risk of house prices going down, especially with a 5% or lower deposit. Mainly as a whole load of them got sued by banks after 2008 for overvaluing properties which were then repossessed and sold off for less, meaning the banks lost money. I had a lawyer friend who specialised in that for a while, and was never short of work.

It is worth paying for a second valuation, but I think it unlikely that they will say the 100k was a major mistake, they might say 50k or 75k less instead though, after the second valuation however it is best just to accept that the house is overpriced IMO.

We bought the house before the estate agents had a chance to put it on the market. Just by chance we saw the estate agent outside taking the pictures. We've been looking for almost a year. We live in Knutsford which is a desirable place to live in Cheshire. Properties were interested in kept getting snapped up. Its the surveyors that have come up with the silly valuation not the lender.

A lot of buyers only purchase a "valuation survey" though - the cheapest option which is not a proper survey though the name is confusing.

In this instance a valuer employed by a lender will do a very basic survey. Or sometimes just a desktop survey where they don't even visit the property in person.

Did you buy the property before the covid boom? I haven't seen freehold properties selling for less than 2019-2022 price in our area.