First Time Buyer - Valuation not as expected

Sue81

I could do with some advice. I'm a first time buyer, buying the flat I am currently occupying from my landlord. My offer of £125k was accepted and I got a mortgage offer of £100k from HSBC, so 80% of purchase price.
The valuation was done on Thursday and I've just got the report back this morning. It has been valued at £115k. Obviously the bank are going to revise their offer if it stays at 80% it will only be £92k so as it stands I would have to find another £8k for the deposit which isn't going to happen.

I don't really know what to do now.

Emmzi

Go back to the landlord and tell him what the valuation was, and see what he says?

poppysarah

Do not pay more than the valuation.

You need to tell them and then point out for you to buy the price needs to drop a lot.

Sue81

Thanks, I'm going to get in touch with him and see what he says. I was hoping this might just all go smoothly.

Sammy85_2

Go back to your landlord.

Our valuation came in £15k under our offer, whilst i couldnt get the price down to the valuation, i did get £11k off, so i was happy. (i thought the valuation was a load of crap anyway, but couldnt afford to make up the shortfall, hense the haggling)

Alot of people will tell you not to pay above valuation, but i would say, pay what you are happy (and can afford) to pay.

In our case this surveyor was undervaluing consistently at around £15k on a number of houses we know of, and for his valuation i couldnt have bought a semi on the street, never mind a detatched, it was very unrealistic, purely designed to lower the risk to the bank (which is fair enough) but doesnt help us!

bitsandpieces

Sue81 wrote: »

Thanks, I'm going to get in touch with him and see what he says. I was hoping this might just all go smoothly.

Seems sensible. I wouldn't view this as such a negative thing - depending how negotiations go, it could save you thousands.

Blacksheep1979

Sammy85 wrote: »

for his valuation i couldnt have bought a semi on the street, never mind a detatched, it was very unrealistic, purely designed to lower the risk to the bank (which is fair enough) but doesnt help us!

Or he was being realistic and the sellers weren't? I really don't understand this 'it doesn't help us' attitude people have - do you want negative equity? Do you want to pay more for something?

Milliewilly

Blacksheep1979 wrote: »

Or he was being realistic and the sellers weren't? I really don't understand this 'it doesn't help us' attitude people have - do you want negative equity? Do you want to pay more for something?

No Surveyors are routinely undervaluing even when presented with comparables. What makes the opinion of one surveyor always correct?

If you are sure prices are going to fall then fine.

Sue81

Well I've rung and told him. The call lasted all of 48 secs. He is going to call me back!

Hailstorm

I don't really buy these conspiracy theories you see sometimes on this site that surveyors are deliberately undervalueing to lower the risk.

When I bought a house last year I had surveys on two properties (the seller pulled out on the first house I was going to buy) and both valuations matched my offer. I was also borrowing bang on the maximum loan to value ratio for the mortgage I had applied for.

I agree with Emmzi, just tell the landlord the survey valuation and wait for his response before deciding what to do next.

Blacksheep1979

Milliewilly wrote: »

No Surveyors are routinely undervaluing even when presented with comparables. What makes the opinion of one surveyor always correct?

They're the professionals here with little to gain from over/undervaluing

Milliewilly wrote: »

If you are sure prices are going to fall then fine.

Last months data seemed to agree that prices were going down again - besides I never said prices were falling I merely asked if you wanted negative equity? Because if you buy for over market value and nobody else will buy back from you at that price/lend to you at that price then you're in negative equity.