Help needed on undervalued home

geordiepaul2001

I have used nethouseprices but unfortunately their are only two house sales in the past 3 years.
One is 2006 for £115,000 and one in 2007 for £75,000.
The street I am buying in is a cul-de-sac, the street the cul-de-sac runs off has far more house sales including one for £133,500 in 2007.

Their is a house in the next street with one less bedroom and a garden half the size for offers over £120,000.

I am going to attempt to contest the valuation but don't hold out much luck.

Paul

Catblue

Why on earth are you so determined to pay a LOT MORE than the house is actually worth?

Why do you want to give the vendors £12K more than the house is worth? Are they family members or something?

If the vendors won't accept 98K, then they'll just have exactly the same problem with the next set of prospective buyers. The vendors could be forced to stay in the house for a very long time.

And remember that if you do go ahead a buy this house for more than the valuer says it is worth, you could be in for a big shock when you come to sell it again and the next valuer says it is worth nowhere near what you are asking for it.

sw_jay

I've got exactly the same issue going on with my mother's home. I am in the process of buying it from her, it's a 4 bed ex council terraced property. I'm buying it in order to assist her financially by releasing the equity for her to pay off outstanding debts and live comfortably for the rest of her life (she's in her 60's now). I was hoping to pay what I believed was a fair market value of £160,000 for it.

Mum was giving me a gift of £40,000 from the equity as a deposit leaving a mortgage of £120,000 which was agreed by the mortgage company. However their valuation only came in at £145,000 so they will now only give me £109,000, leaving my mum with less cash for the future.

I was very disappointed with this valuation, especially as there are 2 bed back to backs half the size of my mum's house in the area on sale for only 5k less.

I think this just goes to show the state of the market at the moment and that estate agents are still listing properties at unreallistic prices.

Coupon-mad

poppysarah wrote: »

Reduce your offer.

Seriously you'd be insane to pay more than it's been valued at.
You'd probably be wise to pay less.

A local EA claims houses have been selling for 25-30% under peak already.

Totally agree, it's a no-brainer. It's a buyer's market.

Why would you want to pay £110,000 for a house you could only sell for £98,000 or less, if you had to sell up later for unexpected reasons??

REDUCE YOUR OFFER TO £98,000. (Sorry to shout, geordiepaul!)

This used to happen sometimes when I worked as a mortgage manager years ago (I recall the last recession and it was common then as it always would be in a falling house-prices market).
OP, seriously, IMHO don't waste your time looking for a lender who will try to match the (overpriced) £110,000 with their valuation, this does you no favours at all IMHO.

GDB2222

sw_jay wrote: »

I've got exactly the same issue going on with my mother's home. I am in the process of buying it from her, it's a 4 bed ex council terraced property. I'm buying it in order to assist her financially by releasing the equity for her to pay off outstanding debts and live comfortably for the rest of her life (she's in her 60's now). I was hoping to pay what I believed was a fair market value of £160,000 for it.

Mum was giving me a gift of £40,000 from the equity as a deposit leaving a mortgage of £120,000 which was agreed by the mortgage company. However their valuation only came in at £145,000 so they will now only give me £109,000, leaving my mum with less cash for the future.

Easy solution: Give mum the extra £11k in monthly instalments with interest.

If you give her 10% of what you give the lenders you will pay her off at exactly the same time as you pay them off, as £11k is 10% of £109k (almost).

geordiepaul2001

Thanks for all the advice, I guess its hard to see the facts when you have become emotionally attached to a property.

Back to the drawing board to look for another house..

princessamy86

But have you tried to negotiate the price down? I still don't really see why you want to contest the valuation, if it's worth less than that's that! What did the EA say when you asked for a reduction in price?

geordiepaul2001

They have asked to see whats on the valuation, to see if it gives a reason why it has been valued so low.

We have quite a good relationship with the vendor and have been keeping them up to date on the progress of everything.
They have stated that they can't go lower than the agreed price.

princessamy86

What reason does it give? I'm assuming they are aware that if it states serious work that needs doing then another survey will come back the same. Don't give up just yet, lots of vendors will say they can't go lower but when you wave some evidence in their face it turns out they would rather not lose their buyer.

geordiepaul2001

I am hoping the evaluation will come in the post tomorrow and I plan to drop a copy off with the estate agent.
No reasons have been given yet why the valuation was low.
Its just a shame because its the first house we have found that ticks all the boxes.