Property Undervalued by Natwest on Mortgage - Help?

stables_kid

I am in the process of buying a property for £115,000 but the valuation survey has come back with a valuation of £105,000. I'm a first time buyer and new to this game! So I am not sure how best to approach this...

Should I go through the Estate Agent to re-negotiate the price or should I go through a Solicitor? Obviously the EA would stand to lose out on the profit of their mark up if the seller drops the price so I feel like they are not likely to do me any favours? There has been a lot of interest in the property and I don't want to miss out and the 10k drop is in my favour, but I dont want to be paying more than the value.

Just wondered if anyone had any advice on the best way to proceed and not let the EA potentially try to rip me off?!

Leory

im a FTB too and the mortgage valuation seems to be affecting a lot at the moment....
But as you say you dont want to pay more than market value, so surely you cant get ripped off if a valuation comes back at 105k? any difference would either have to be paid by you, or the vendors reduce the price.

hopefully the latter!

poppysarah

Don't pay a bean more than the valuation.
Go via EA.

stables_kid

cheers, I guess I dont really trust the EA and they did introduce a mystery bidder to push the price to asking (115k) at the last minute.

really wouldn't be prepared to go over the valuation. interesting comment that that this seems to be affecting a lot of mortgages at the moment...

DVardysShadow

stables_kid wrote: »

cheers, I guess I dont really trust the EA and they did introduce a mystery bidder to push the price to asking (115k) at the last minute.

really wouldn't be prepared to go over the valuation. interesting comment that that this seems to be affecting a lot of mortgages at the moment...

You either find the difference yourself or if you are feeling bold, you go back to the agent and say "You know that buyer you had ... well offer the property to him, because my valuation is 105 and I am not going to go above that'

secla

at the end of the day if thats what the mortgage company are saying its worth thats all there going to let you have. if the seller doesnt want to drop there price then walk away.
i wouldnt contemplate adding any money to it to make up the difference as thats a route to instant negative equity, tell your ea im sure they would rather make some commission than no commission at all

Sammy85_2

We had the same situation with Natwest, valued £15k lower than our offer.

Managed to get the vendor down £11k but had to find the extra £4k ourselves. Couldnt let the house slip away for the sake of £4k when we love it so much.

It all really boils down to what you think its worth and what you can afford to stretch to. I would go back and play hardball with the vendors, they may cave or they may offer to meet you somewhere in between.

RX-78

Whilst I agree you should bargain, a simple approach of refusing to pay a peeny more than valuation may not always work well.

If you use search on here you'll see how many people are getting valuations less than agreed price. I (and others) think this is because the bank's valuation reflects the need of the bank to minimize their risk, thus tending to under value. Where as an independant valuation may give a figure that is perhaps closer to true market value.

Some vendor wil drop their price, some will meet you 1/2 way. Others will refuse to negotiate (especially if you go in with "I'm not paying a penny more than valuation" attitude!) and you may end up loosing survey & conveyance fee, not to mention that house you wanted.

Please consider carefully before deciding how you deal with this valuation.

stables_kid

Thanks for all the tips. At what point is it a good time to re-negoitiate as there are a few other issues with the initial valuation survey - such as requesting I get a full structural engineers report, a damp and timber report and an electrical report as the property is currently in quite poor condition. How far do I go down the line with spending extra money on these reports?

Should I present the market valuation report with these issues and say are you prepared to negotiate ahead of me carrying out these further investigations?

Or should I present the findings of all these reports and use these as the bargaining tool to get the price down as any other prospective buyer would have to go down the same route and this shows my commitment to the deal?

It needs a lot of work but has great potential...

poppysarah

Offer (house bank valuation - cost of sorting repairs out)

no point buying a damp shed at this point in the market though.