House valued less than offer..

bargain_hunter25

Hi

We are first time buyers and here is the situation we are finding ourselves in. We recently saw a house on the market with an asking price of £146000 which we liked and after a few viewings we had our second offer accepted which was £141000. We applied for a mortgage with The Post Office / Bank of Ireland (4.29% fixed for 2 years 85% LTV). They arranged for a valuer to vist the property but they have only valued it at £125000. Obviously, this causes us a problem as we were planning on borrowing £119850 and putting £21150 deposit down to get the mortgage deal. The survey as you would expect, being a basic mortgage valuation doesnt contain much information, it advises the house would be worth £130000 with some improvments. So, they will lend us £106250 rather than £119850, We have spoken to the Estate Agent who advises that the maximum the vendor can go down to is £135000 which still leaves us needing to put an extra £7600 down. Has anyone had experience with houses being valued quite a lot less than the accepted offer price? Would it not be wise to buy a house for £135000 when the mortgage provider says its worth £125000 or are they covering there own backs? Would it actually be worth more? We could find out with a full structural survey what they advise the house is worth but before we spend that sort of money we would like to know a few opinions

Many thanks

seraphin_2

Its not uncommon for houses to be valued quite abit less than you have offered, have you looked at whats sold in the road in the last 12 months.

I wouldent pay more than a house has been valued at, you would have to find the difference and if something was to go round in the future you would be left in neg equity.

Personally id go back to ea and say how much its been valued for and let them see the report, then they can speak to the seller, and see if you can re-neg a better price.

sarah

bargain_hunter25

seraphin wrote: »

Its not uncommon for houses to be valued quite abit less than you have offered, have you looked at whats sold in the road in the last 12 months.

I wouldent pay more than a house has been valued at, you would have to find the difference and if something was to go round in the future you would be left in neg equity.

Personally id go back to ea and say how much its been valued for and let them see the report, then they can speak to the seller, and see if you can re-neg a better price.

sarah

Hi Sarah

We already went back to the EA, they then said the max the vendor can go to is £135000. So still some way to go, theres not many houses sold this past year or so on the street.. Theres one for about £140000 but thats back in 2007 so at the height of the boom..

ciano125

If they can't go below a certain level, that's their problem if the house isn't worth what they are asking. Why do you want to pay more than market value for it? Just because someone "needs" £X for a house (perhaps in order to buy a bigger, better one), it doesnt mean that its worth that, and why should you fund their better lifestyle anyway?

Listen to the experts. It aint worth it and if they can't sell for what its worth, move on, their problem not yours. There's plenty others.

bargain_hunter25

So you would expect that another mortgage provider would also likely value it at the same £125000? As you can imagine, finding a nice house is quite hard and we do like this one but we agree in not overpaying and funding someone elses lifestyle and if the vendor is not being realistic then thats not really our problem.

nic_santorini

That happened to me and I lost the house of my dreams because they valued it at £15k lower and they sellers would not budge because we all thought it was worth that much - I got a second survey, they said the same thing, it was just because it had a back boiler!!! A cash buyer bought it for the asking price instead - it was the mortgage companies being cautious and I had no more money that I could put down - absoluting gutting!!

Welsh_Totster

We pulled out of a house purchase 8 years ago because it was valued much less than our offer. The property was originally on for £77k dropped to £75k and we offered and had accepted £70k. Survey valuation came back at £55k quite a drop! We said we would go ip to £60k but the vendor wouldn't drop lower than £65k we didn't have the cash to make up the deficit and didn't want uo be in that much negative equity, we walked away even though it was a dream house. The vendor never did sell the house as he wouldn't budge and as we told him no matter eho offered what the valuation would come back the same.

Fire_Fox

bargain_hunter25 wrote: »

Hi Sarah

We already went back to the EA, they then said the max the vendor can go to is £135000. So still some way to go, theres not many houses sold this past year or so on the street.. Theres one for about £140000 but thats back in 2007 so at the height of the boom..

Of course the estate agent is going to say that: they work for the vendor and are on commission! Get as many land registry sold prices together as you can for similar properties in the street and area, revise your offer to £125K in writing. detailing exactly how you came to the revised offer, also note your strong position as buyers (FTB, finances in place, solicitor instructed). Forget what the vendor wants/ needs - unless they get a silly cash buyer they won't get it. If you overpay for this house you are throwing thousands of pounds down the drain. If they come back to you and say no, calmly say your offer will not be increased and remains on the table and walk away for a week or so.

Bullfighter

Offer £125,000. In fact offer £115,000.

Do you seriously want to buy a house that's in negative equity the day you move in??

A house with negative equity is a rental with debt.

RobertoMoir

bargain_hunter25 wrote: »

We already went back to the EA, they then said the max the vendor can go to is £135000.

The max the vendor can "go to" is called "their problem" for a reason.

bargain_hunter25

I have done some more research and these figures are interesting and definately something to go on regarding a new offer price.

Prices of Semi-Detached houses in the area have actually gone down 6k or so since the house was purchased by the current vendor in September 2006 so about 5.4% decline. It was bought for £107500 back then but I know significant improvements have been done since then, e.g central heating, double glazing, new kitchen and bathroom, new oak flooring etc. So based on the price it was bought for in 2006 and the actual decline in Land Registry prices since then it probably is worth what the bank say right now of £125k even with all the improvements.. My brain is working overtime here!:rotfl: