Finally moving house - new home undervalued by £15k! Advice/experience sought

PottyHouse_2

Hi all ,

After being on the market for the last 10 months or so and and hopefully "sold" for the third time we are now going through the conveyancing procedure and applying for mortgage etc etc.

Our offer of £160k for a "very large" 3 bed semi home in very much sought after area has been valued by Surveyor at £145k!! We were taken aback as was the Estate Agent acting on behalf of our Seller. We gained evidence of recent sales, houses currently on the market and the EA asked the Surveyor to look at the evidence and very diplomatically asked if he could "revisit" the price he had printed. Apparently the Surveyor evidence was based on recent sales in the "area" (those properties being in not a very sought after road, completely different houses and a lot smaller - hence we are not buying one of those - plus there have been no sales this year on the road we are buying on - no comparison really!!) plus he does not even know the local area well.

We have not yet received our mortgage offer but obviously it is not looking good and I am expecting the Building Society to say if we want the house that much we have to put the extra £15k towards it ourselves - which will cause us to withdraw our offer and break the whole chain.

We all wanted to complete well before Christmas due to the stamp duty exemption and VAT change so for us this is a nightmare and we are going to loose the house that we have been desperately seeking, with the slowdown in the market there are no others on the market that suit our needs/location etc etc.

I just wondered if anyone had any similiar experience /advice they can give - our IFA is defending the company and telling us the EA will try and convince us the house is worth more as he wants the sale, but we are not stupid, having watched the market for nearly a year and being RIGHTMOVE obsessed we know the house we want is worth at lot more than £145k and it seems really unfair to us that we are going to loose it, down to perhaps an error in judgement.

Yes - I am not a Surveyor, neither is our IFA and neither is the Estate Agent but we trust them to do their job, be open and honest and hopefully admit if they have made a mistake ..... ??

Rockporkchop

PottyHouse wrote: »

We have not yet received our mortgage offer but obviously it is not looking good and I am expecting the Building Society to say if we want the house that much we have to put the extra £15k towards it ourselves - which will cause us to withdraw our offer and break the whole chain.

Just wondering why you won't pay the extra £15k towards the house yourselves, if you truly believe that it is worth more and you desperately want it?

fdm

The same thing happened to us - we offered £235,000 for a large detached property - offer accepted - mortgage approved subject to valuation, then the surveyor valued the property (he was employed by bank) and valued the property at £210,000 and to add insult to injury he stated the rebuild cost of the property would be £265,000!!!
The bank did not ask for the extra just decreased our ltv and increased the interest rate!! We did not want to slow down the process anymore so we have just accepted it - they have the money we need so they hold the cards.
we did however get the vendor to knock off £5,000 - should help towards decorating etc.
Good luck with your situation - it will be interesting to see what you bank does!

sunshinetours

Rockporkchop wrote: »

Just wondering why you won't pay the extra £15k towards the house yourselves, if you truly believe that it is worth more and you desperately want it?

At a guess because the OP doesn't have a spare £15k?

PottyHouse_2

Thanks for reply.

We believe it is worth in the region of £155k to £160k but were happy to pay £160k to secure it - there is no way we would get any house similar to that for £145k. As our Solicitor said to us depends on how much we want the house - would you give £15k to a complete stranger ???!!!

Didnt want to bore everyone with personal circumstances etc etc but don't you think £15k is a lot to add onto costs when you take everything else into account, EA costs, solicitors, moving etc etc plus the house we want needs every single room decorating/work doing (this was reflected in the offer we originally gave) and the bit of money we had left over was going towards this - we are making a sideways move for the location we want re: schools so our plans were not to increase our current mortgage but port it across.

I would also add that if the BS will not give us the same mortgage but offered us less this could mean we will have to redeem our mortgage and incur penalty charges as we have a fixed rate and this could cost another £3k - seems we are losing out whichever route we take.

I just wondered if anyone had a similar experience with undervaluation??

Miss_Money_5

My heart goes out to you! I'm in a similiar situation - i have made an offer on house for 108 and not they bank surveyor says its only worth 105. This obvioulsy will affect my LTV and i'm worried that the sellor will not reduce the price especially as they have not found something themselves yet! Any advice or help as to how to approach vendor or estate agent needed please!

Miss Money x

poppysarah

Your money you decide. Banks money they decide.

You might not think you'd get anything else for that much, but houses are being valued less (which is good really unless you've overpaid for one and have NE)

PottyHouse_2

Thanks for your experience - yes that's helpful for us that we are not the only ones - but not for you !

I need to work out our LTV, on £160k we were asking £75k mortgage which is less than 50% so that is in our favour.

Yes, I suppose I need to keep being patient and wait (been 3 weeks now) for our mortgage offer to come back. I thought Nationwide were pretty good ??!!!

Gorgeestwo

we were in the same position, mortgage valuation came in at 12k less than our offer had been accepted for, we were in a position to be able to come up with extra money so we didn't have to go onto a higher LTV and thus a higher interest rate, we did get the vendors to drop a couple of thousand though,

Our house is also alot bigger than surrounding houses and in a decent road etc, came up with comparables and can't really understand why it came up alot less did wonder if it was a bit of a ploy by the bank to get us up to a higher LTV and thus a higher interest rate as we had applied for a low rate fixed for 2 yrs (3.49%) they were happy to lend us more because of the lower valuation but obviously at a higher LTV, it totally backfired if that is what they were trying as we ended up borrowing less to make sure we stayed on the low interest rate Can't get quite so much decorating done straight away as planned but doesn't matter it will get done eventually

Hope it all works out for you

PottyHouse_2

Gorgeestwo wrote: »

we were in the same position, mortgage valuation came in at 12k less than our offer had been accepted for, we were in a position to be able to come up with extra money so we didn't have to go onto a higher LTV and thus a higher interest rate, we did get the vendors to drop a couple of thousand though,

Our house is also alot bigger than surrounding houses and in a decent road etc, came up with comparables and can't really understand why it came up alot less did wonder if it was a bit of a ploy by the bank to get us up to a higher LTV and thus a higher interest rate as we had applied for a low rate fixed for 2 yrs (3.49%) they were happy to lend us more because of the lower valuation but obviously at a higher LTV, it totally backfired if that is what they were trying as we ended up borrowing less to make sure we stayed on the low interest rate Can't get quite so much decorating done straight away as planned but doesn't matter it will get done eventually

Hope it all works out for you

Glad you got what you wanted, this has made me feel better :rotfl:
I will discuss with my IFA if we can get a different rate based on LTV etc etc, yes we could manage an extra £50 on our mortgage payments but not £15,000 from our pockets !! We already have a feeling our Seller will not be able to negotiate on selling price as they are unfortunately NE and splitting up, debts etc etc etc etc but not sure if this is their last chance before the end of the year to sell - so feel that the final decision and money issue lands at our feet.
Thanks again

morg_monster

I have no advice but argh i'm worrying about this, we're having a survey done on the house we're buying today... I have everything crossed but its kakifn it hav=rd tii tyoe,.,.

(translation: making it hard to type...)