valuation advice urgent

rach29

We have recently agreed to sell our house subject to contract for £280,000 having steadily reduced the asking price over a few months (from an original start point of £325k), to £285k.We had 2 offers of £280k & went with the most proceedable buyer (FTB with large deposit & mtg agreed in principle) Today we hear that the mtg valuation has come back at £265k!!! Purchaser has asked us to reduce sale price but we have declined to do this. We believe valuation is entirely wrong because the property in unique in its market and because there are no comparable properties locally. No properties in the same locality have been sold recently but the neighbours either side bought for £231k & £243K in 2003. These properties are both on smaller plots and are relatively modern, our property is a character period property. Any advice as to way forward??

Doozergirl

If they have a large deposit in terms of percentage of the property, the valuation would be more likely to come in near to the agreed sale price as the valuation shouldn't be so much of an issue for your buyer or their lender. I suspect that their deposit might be smaller percentage wise - even £50,000 is only 17% of the sale price. Can you find out from the EA how much they are borrowing against the house?

If they are putting down 40 or 50% then it may be that you have overvalued your house, though from the example of your neighbours, £280k sounds okay if the house is a larger, period property and you account for some rise in the market.

Assuming you're not prepared to negotiate (I would be pretty upset considering your original asking price), then you have to go back to the other party and see if they're still interested. They may not be FTB, but they may have a larger deposit. If they're still interested, it gives you a hand to play at least. Otherwise you cut your losses, bluff them, or wait for another buyer.

Poppy9

What does your EA advise?

rach29

EA advised that she had the "proof" of its real value because she has the valuation report in front of her! Although she did admit it was "harsh" I think she has an eye on her commission since our acceptance of a lower offer will only reduce this by £150-£200. Buyer has offered £270k now but we are still not minded to accept as this means we cannot buy the house we want. Have some experience of mortgage sales myself in my work & I think we should request the buyer dispute the valuation giving our reasons (neighbouring properties etc) or alternatively we could offer to pay for a further survey with a local surveyor (suspect mtg valuation is by Esurv or similar) What do you think? BTW Have also found another property sold STC in same village approx 300yds away for £359,995 (new build but similar dimensions & smaller plot)

rach29

http://www.rightmove.co.uk/viewdetails-10431017.rsp?pa_n=1&tr_t=buy

http://www.rightmove.co.uk/viewdetails-7707278.rsp?pa_n=1&tr_t=buy

See what you think

Doozergirl

The other house does seem to have a little extra space than yours, but there's no competition in my eyes your house looks lovely; far more welcoming and yes, better value, but we don't know how overpriced the new build is...

I can't see how you'd persuade your buyer to dispute the valuation - after all, the fact that it has been undervalued is not a bad thing for them. Similarly, I can't see how paying for your own valuation is going to help as I suspect your purchasers will think the new valuation to be biased in your favour if it comes back with the figure you need. The expense would be pointless then

I would be contacting the other party and/or hoping that these people are bluffing you and have enough cash to cover the defecit. You go back to them, say no and back your argument up with the evidence of your neighbours' sales and the house down the road. If you can't afford your next house at £270k, you don't have much choice.

How long was your property on the market at £285k before you received the offers? Could you see yourself receiving new offers quite quickly? The market does seem to have revived itself recently IMO and Sold boards are springing up quite quickly again where I am.

I think you should establish whether your buyers can actually afford to pay that £280k as your opinions seem pretty well backed up to me and it may well be the problem lies with them, rather than your price. I've heard from EAs that it is not unusual for properties to be undervalued at survey where high LTV mortgages are involved, certainly during last year.

rach29

Thanks for your advice Dooozergirl, The house was on at £285 through December & we got 2 offers in 2 days on 13th/14th Jan. Our buyer says if we accept £270k he will complete in 2 weeks, this leads us to believe he is just trying to get a reduction rather than having money issues. Will take your advice & contact EA & tell her we are sticking to our guns & see what happens.

996ducati

The sad thing is here is that this sort of "bluffing" goes on all the time in sales.

It does sound like the buyer is trying to save 10K which in principle is fair enough BUT the stage for negotiation has really been passed once a sum is agreed as long as the survey agrees the property is sound.

My thoughts would be to stand firm & risk the sale if you cant afford to lose the extra 10K. Worst case scenario is to re-market your property & advise your buyer you cant afford to accept the lower offer & put the property back on the market. It will force the buyers hand either way.

rach29

Thanks 996ducati, We have decided to take the advice here and stand firm. If we dont get the agreed £280k then we lose our purchase which is a shame as the chain is only 3 people (our buyer, us & our vendor) We thought that this would be a simple process but we should have known better. We are thinking of emailing the EA today with our reasons for disputing the valuation & confirmation that we are sticking to £280k, (she is speaking to the vendor on Monday a.m) we plan to tell her that if no deal at £280 then property goes back on market. Do you think this is the right thing to do?

stratford_2

Hi, I know you chose the most proceedable buyer, but what's happened to the others who also put an offer of £280k in? Maybe they could still be interested and this could be communicated to the current purchaser?

Good luck!

rach29

Thanks Stratford, we will ask the EA to try & contact the other couple who made an offer, we rejected them because although they also had no property to sell & a large deposit they had problems obtaining a mortgage as they had moved to Australia and had left behind a problem with their previous mortgage co' However they may have now sorted this so it is worth a try. Fingers crossed!!