Putting a house back on the market after downvaluation.

Mr_GB

I'm currently selling my house at the moment (It's sold STC) The surveyor that was assigned by the buyers mortgage lender has downvalued the house and the buyer no longer wishes to pay the full amount.

I'm not prepared to drop to the figure he wishes to pay so was going to put it back on the market. However, my estate agent has said that he will have to put it back on the market at the downvalued price - is that correct!?

Luckily, it's a a shared ownership property so if needs be I can put it back on the market for the lower price and increase the premium, but I'd like to know for definate as it sounds a bit strange to me!

I would appreciate any comments you may have. Thank you in advance

Richard_Webster

Is this shared ownership with a Housing Association or similar body?

Are you selling just your percentage or are you aiming to buy in the remaining percentage and pass the 100% on? If the latter have you checked that you can do that? Some SO leases contain provisions that effectively prevent anyone buying the 100% and selling within 3 months.

Even if you do buy in the remaining percentage you usually have to pay the amount the SO's surveyor determines so you would have little room to manoeuvre

If you are selling only your percentage have you offered to sell it to the HA? What did they say?

You will need to read the lease carefully to see whether you are allowed to sell your percentage for any price other than agreed by the HA.

Meatballs

Mr_GB wrote: »

I'm currently selling my house at the moment (It's sold STC) The surveyor that was assigned by the buyers mortgage lender has downvalued the house and the buyer no longer wishes to pay the full amount.

I thought if the valuation came in low from the lender then the buyer wouldn't be able to a mortgage for the original amount? Not so much doesn't want to pay the full amount, but has to match the lender's valuation?

Mr_GB

Hi there Richard,

I'm selling just my share on the open market, the other share is owned by Milton Keynes Council. I am allowed to sell my share for whatever I wish to, and as far as I know the council wouldn't buy back my share of the property anyway.

I was more looking for a response about my estate agents comments, R.E. advertising the property for the downvalued price - surely that is incorrect?

Mr_GB

Meatballs wrote: »

I thought if the valuation came in low from the lender then the buyer wouldn't be able to a mortgage for the original amount? Not so much doesn't want to pay the full amount, but has to match the lender's valuation?

That's correct, the mortgage lender will only lend the buyer the downvalued price, hence why I wish to put it back on the market for it's original price (to find another buyer). If another mortage lender is used, presumably another survery will have to be done?

Richard_Webster

You need to look at the agreement with the estate agents. That might say that they can reasonably stipulate the price the property should be offered for.

I would ask them why they want to put it back on at a reduced price.

Is it because they think there is some law that says they must because some lender's valuer has downvalued it - unlikely I think - or because they think it is overpriced?

I would check through your SO lease and any pre-contract report you had from your solicitors when you bought to make sure there are no constraints on you selling. Usually the whole point of shared ownership is to provide affordable housing so Councils/HAs keep lists of people who want such properties and require you to offer it to people on their list first. There are other schemes where you can't sell a percentage - you have to buy in and sell on the 100% in a back to back transaction.

saveallmymoney

The estate agent will be thinking that he is wasting his time trying to sell your house only for it to be valued lower again, so he probably doesn't want to spend a lot of time and effort with a house he can never sell (since, presumably you won't accept the valued price which is likely to be the same next time).

brit1234

Mr_GB wrote: »

I'm not prepared to drop to the figure he wishes to pay so was going to put it back on the market. However, my estate agent has said that he will have to put it back on the market at the downvalued price - is that correct!?

You have to remember house prices are set to continue falling throughout 2011 and mortgage transactions are rapidly falling.

By not being prepared to drop the price in todays lending criteria you are making it near impossible to sell especially as it is a very unpopular shared ownership type home.

Your estate agent is right to ask for the reduction, they have enough unrealistic sellers on their books already. Whats the point of marketing it if they know it won't sell at the inflated price.

Mr_GB

Thank you for all your opinions!

By not being prepared to drop the price in todays lending criteria you are making it near impossible to sell especially as it is a very unpopular shared ownership type home.

I disagree, shared ownership housing is extremely popular, certainly within the Milton Keynes area anyway. Even more so for 3 bedroom houses like mine.

Your estate agent is right to ask for the reduction, they have enough unrealistic sellers on their books already. Whats the point of marketing it if they know it won't sell at the inflated price.

But it will sell at that price as it already has, the house sold within 3 days of me putting it on the market and for the original asking price, it's the surveyor of that particular mortgage company that is causing the issue.

zappahey

Mr_GB wrote: »

But it will sell at that price as it already has, the house sold within 3 days of me putting it on the market and for the original asking price, it's the surveyor of that particular mortgage company that is causing the issue.

No, you got an offer within 3 days. It's not sold until you get the money in the bank.

Anyone can offer whatever they like but they can only buy it if they get the funding which they likely won't if the surveyor is valuing at less.

Catblue

Mr_GB wrote: »

But it will sell at that price as it already has, the house sold within 3 days of me putting it on the market and for the original asking price, it's the surveyor of that particular mortgage company that is causing the issue.

It hasn't sold. If you get an offer for the asking price again, then another surveyor will be round to value it again. The likelihood is that the next surveyor will value your house at less than the asking price.

This means that the buyer cannot get a mortgage for that amount and will have to withdraw unless you reduce the price. People who are attracted to shared ownership schemes are those people who have very little money of their own. So even if you did find a magical buyer who was prepared to pay more than their own surveyor thinks it is worth, then unfortunately they wouldn't have enough money of their own to do it.

You might be waiting a long time to move.