Advice on low valuation on house we are selling

Thrugelmir

Bungly wrote: »

Thanks again for all the replies - great forum :T

The £20k drop is about 7% of the house value. Think we are going to negotiate and see what is the most the buyers will go up to. It would be a pain to lose the place we want to buy - don't really want to start this all over again.

So does it take it down below the stamp duty threshold at £250k ?

chodges84

The problem is, that even being valued £20k under what you agreed to sell it for, it is still over valued. Every property in this country is. But people love it, because it makes them think they are worth more. That's why we are seeing BUYERS moaning on the forum that the house they are looking to buy is under valued.

'I was prepared to pay £160k' they say 'but the bank says its only worth 140k'. It's irrelevant want you think it's worth as its the banks money you are buying the house with and 140k is the banks maximum offer.

I find it highly odd that surveyors are valuing properties for less and BUYERS are moaning. The only reason I can see for this bizarre behavious is that they can say to their friends, 'this house cost me £160k' as it makes them appear richer than if they had bought a house for £140k. Although they will have a bigger mortgage and it will cost them more to RENT it from the bank.

Milliewilly

How is a mortgage renting from the bank ? Its yours at the end of the mortgage unlike renting which is money permanently lost.

Buyers are moaning because there is a definate trend of Surveyors undervaluing so the banks keep hold of their money to invest in markets other than mortgages.

People are sayng Estate Agents over value but most estate agents you will find are RICS members just like surveyors!

Coded

Milliewilly wrote: »

How is a mortgage renting from the bank ? Its yours at the end of the mortgage unlike renting which is money permanently lost.

Buyers are moaning because there is a definate trend of Surveyors undervaluing so the banks keep hold of their money to invest in markets other than mortgages.

People are sayng Estate Agents over value but most estate agents you will find are RICS members just like surveyors!

Totally agree, I think some are too set with thinking the valuers must be right. Surely the value of a house is a price that most people would be willing to buy it for.

Emy1501

Its yours at the end of the mortgage unlike renting which is money permanently lost.

Interest payments on a mortgage are permanently lost just like in rent. The main part of a mortgage is interest payments.

Buyers are moaning because there is a definate trend of Surveyors undervaluing so the banks keep hold of their money to invest in markets other than mortgages.

Banks want realistic values for properties now. If a property gets repossessed they need to make sure they are going to get their money back especially in the volatile market we are in. There are noises that banks want to consider suing surveyors who have overvalued properties therefore better to be safe than sorry if you are a surveyor.

People are sayng Estate Agents over value but most estate agents you will find are RICS members just like surveyors!

Estate agents are there to get the best price they can for the seller. They have no concern regarding how the buyer gets their finance and whether the bank would ever get their money back if the property is repossessed.



As for the original issue. If I was a buyer I would only want to pay what the valuation report said unless I knew i was getting a bargin and there was nothing out there compared to the valuation. If I was the seller my decision would be based on how easy it was to sell the property ie. If it went under offer within a couple of weeks and there was loads of interest I would probably consider stick close to the selling price and re-marketing if necessary. If though it took a while to sell and the buyer was the only really interested party I would probably sell at the valuation if I could afford it.

Milliewilly

Interest payments on a mortgage are permanently lost just like in rent. The main part of a mortgage is interest payments.


Errr - that assumes you have a massive mortgage at a high interest rate and you pay it until the day you die. The interest also decreases as the loan decreases over the term. Rents are only going one way.

Most mortgages are 25 years so once you get to about 60 your mortgage in the average scenario will be paid off. The rest of your life is then mortgage free. If you rent you will have to pay rent until the day you die.

Emy1501

Milliewilly wrote: »

Interest payments on a mortgage are permanently lost just like in rent. The main part of a mortgage is interest payments.


Errr - that assumes you have a massive mortgage at a high interest rate and you pay it until the day you die. The interest also decreases as the loan decreases over the term. Rents are only going one way.

Most mortgages are 25 years so once you get to about 60 your mortgage in the average scenario will be paid off. The rest of your life is then mortgage free. If you rent you will have to pay rent until the day you die.

If you take say a 150K mortgage at say 5% you are talking about £700 a month in interest payments alone. Its going to be like this for at least the first 5-10 years.

Not saying renting is better than buying just saying that interest on a mortgage is same dead money as renting especially for any period where house prices do not go up.

Thrugelmir

Emy1501 wrote: »

If you take say a 150K mortgage at say 5% you are talking about £700 a month in interest payments alone. Its going to be like this for at least the first 5-10 years.

Not saying renting is better than buying just saying that interest on a mortgage is same dead money as renting especially for any period where house prices do not go up.

Rent is inflationary , interest is not.

Emy1501

Thrugelmir wrote: »

Rent is inflationary , interest is not.

Rent has hardly gone up over the last 10 years or so and its cheaper than it was a couple of years ago certainly in my area. Of course interest rates go up and down especially if you do not fix as many people don't.

The point I was making you can't simply say rent is dead money. Ie if I bought in say 2006 for 175K in my area and my mate rented, we would probably be no different off now and his rent would be no more dead money than my interest payment.

Thrugelmir

Emy1501 wrote: »

Rent has hardly gone up over the last 10 years or so and its cheaper than it was a couple of years ago certainly in my area. Of course interest rates go up and down especially if you do not fix as many people don't.

The point I was making you can't simply say rent is dead money. Ie if I bought in say 2006 for 175K in my area and my mate rented, we would probably be no different off now and his rent would be no more dead money than my interest payment.

Agree that the rental market is not normal. Longer term there will be a market correction. Either rents will rise or prices fall.

Whether interest rates move up or down isnt important. The key is reducing the capital debt which means that interest rate changes progressively have a smaller impact on repayments.