House undervalued - what now??

Tim_L

Couple of points here. Firstly the mortgage company will only be interested in being able to cover the value of the mortgage - it's up to you what you pay out of your own cash. So you should be fine if you decide to continue.

HOWEVER: there is nothing worst than the feeling of moving in somewhere and finding the problems are bigger than you thought. Part of the psychology of house buying is that you can end up worrying more about the upfront costs - the grand - instead of what it might cost if you were to make a mistake, and you do set your heart on purchases often on the basis of maybe a 30 minute viewing. Many people will agonise more in a shop over a pair of shoes than they do about spending quarter of a mill plus on a house!

So given there are problems, you need to take a deep breath and a step back, be certain you know how they can be fixed and what it will cost - possibly involving a second more specific survey - and take a rational view. I doubt you will persuade the vendor to contribute given the competition over the price - she may well be more inclined to put the house back on the market if there's a delay - but it's always worth a go.

Ian_W

Just another few points:
1. A substantial part of the UK, i.e. Scotland, operate a system of house purchasing which frequently amounts to offers over the stated price - sometimes substantially so. Given their alleged propensity for tightness [which I have, incidentally, not experienced! ] who are the rest of the UK to label them dopes and fools for doing so?
2. The OP lives in Belfast where prices over the past few years have gone very quickly from amongst the very lowest in the UK to on a par with the rest, the market is still rising fast. The "peace dividend" has given prosperity and security resulting in more confidence and a wish to improve their lives - and those of their children. Given the close links with Scotland I'm not in the least bit surprised that in a rising market the scottish system of "offers over" prevails whether the legal system is the same or not.
3. Given the OP has a mortgage of <60% LTV and has budgeted that they can afford a 3% rise in interest rates - they've certainly thought it through a lot more thoroughly than those who jump in to critisise have.
4. Some people always know better .... :rolleyes:

Angela_D wrote:

It is true clearly the sheeple aren't as clever as me which is why they'll be lambs to the slaughter.
Baaaaa

.... though in my experience it's usually in converse proportions to their actual experience and knowledge!! :eek:

Nothing in life is 100% safe, that's why it's so much fun.
Best of Luck, leftie.

pawpurrs

Well said Ian, you have made the points that I wanted to, but hadnt got round to !

leftieM

Thank you Ian W for such a measured response. What you say is correct. Prices in Belfast are climbing at a frightening rate. I knew this and although our budget was 240k for a house, we looked at those priced between 190k and 210k, allowing for a 10-20% margin. When I saw the house we've agreed now I guessed it would go for 240k.
We are moving now because soon our budget will take us over the stamp duty threshold, my eldest starts school next year and we want some stability, and , frankly, I'd love a bigger house. Both surveyor and damp specialist have decribed the house we're (hopefully!) moving to as 'beautiful' and it really is. 1900 square feet of red-bricked bay-windowed loveliness. With £455 of woodworm.
Thanks for all your comments, both positive and negative.

Doozergirl

Glad you've come to play for a bit, Ian W! Well said.

Good luck, OP. I hope you're happy in your new home. Despite what others have said, it doesn't sound like it's falling down at all. Just needs a bit of a relatively inexpensive 'polish up' on the maintenance side.

noyk

Oddly we didn't bid up on this house. We adopted a 'wait and see' and asked to be allowed to make a bid at closing. We matched the top offer - what else could we do?

How does this work, do people put in written offers? Did you get to see the alternate offers? This system seems rather overly trusting of estate agents to me!!!

Poppy9

I don't trust damp specialists after problem with my first ever home. It was a lovely Victorian 4 bedroom terraced house which I bought for the very expensive price of £17500 (on market at £21k). This was in 1986 and we bought it knowing it needed a lot of work i.e it had no central heating and no kitchen. The survey showed up damp and woodworm problems so two specialists came out to survey. No woodworm could be found:T and the damp problem was mild and would only cost £500 to put right. What they didn't tell us was that when they put in the damp course it could affect the plaster on the walls. We then found out that it needed hacking of and replastering. Two rooms and hallway downstairs. Then putting up a new light fitting the lathe and plaster ceiling started to come away. Down came all the ceilings on the ground floor. The damp didn't improve though and the plaster on the walls kept perishing. We had a 25 year guarantee with the damp course but it didn't cover the cost of replastering it only covered them re-doing the damp course. We had all sorts of excuses as to why we still had damp. We had replaced the guttering after one surveyor said this was the problem, we relaid the sitting room floor after being told this was the problem. After a few years we gave up and sold as we were fed up with the constant mess. We vowed never to buy a house that showed any signs of damp again and we never have. We were both so picky looking at houses, feeling walls, looking for tell tale partial redecoration, and mould on the lining of curtains etc.

leftieM

noyk wrote:

How does this work, do people put in written offers? Did you get to see the alternate offers? This system seems rather overly trusting of estate agents to me!!!

It is a bit over-trusting of estate agents but surely the system is like that anyway. How we did it was we put in an offer of 221.5k after vendor told us he had an offer of 221k. We had just put our house on the market (in order to get this house). We kept in touch with the EA to see how bidding was going and said that we wanted to put in a bid before closing, which we did.
Confession - we went with the same EA as the vendor as they gave us the impression that it would increase our chances (and we knocked them down to 0.5% commission). They advised us to 'wait and see' rather than getting into a bidding war and driving the price through the roof (more than the paltry 40k that is!)

noyk

Thanks for replying but i'm concerned about this - so it appears the estate agents dream came true. They knew how much you had and how much you could "afford" and helped you spend your future earnings. I'm sorry if i appear a little synical but by their nature estate agents manipulate people and this sounds to me like they've made you spend a whole lot more than you should have done - is the market in n.ireland really that hot? I know you say you can afford it and thats fine but it really does seem dodgy to me.

leftieM

It is true that the EA had the dream deal having a buyer and seller on their books so they get commission on both. I was, however, not forced by the EA to spend a certain amount. We had a budget for the house which we came in under. I was forced by the vendor to spend £235k in order to buy her house.
Now, if the EA lied about bids in order to push the price of the house up, I have no control over that. They didn't lie to me about bids we received for our house so I don't believe they lied about the house we're buying.
Maybe you could explain how we were manipulated? I'd like to know. I don't feel I was manipulated but maybe I'm so buried in this that I've missed something.
You have to accept that the NI property market is very competitive. We didn't have a boom in the '80s (for obvious reasons!) and now, unfortunately, we are having one.
There are a couple of local EAs who post the bids as they come in. If you PM me I'll send you the links. You'll see what it's like. There is no requirement to register sale prices with the land registry here so that's the only way to know what properties sell for.
When I asked the surveyor about his valuation he said it was purely based on damp - he thought he saw wet rot and was allowing for the maximum remedial work. His comment was that he hated putting retentions on mortgages at the moment as the market is moving so fast that the house we're buying would probably get 10 or 15k more if it want back on the market in the morning. That's what it's like.