Home Buyers Report has come back £12k under!

EatingGlitter

Hiya,

We've had our Home Buyers Report back through Countrywide/Nationwide.

There were 2 urgent things, one being the electrics are a little bit old but are in good working order. The second is a previous tenant started to convert the loft but left it with a ladder. We are only going to use it for storage and not as another room. It's been like it is for 10 years and I discussed it with the surveyor as such and he said it should be ok.

However, the property was on at £175k, we were accepted at £172k with fixtures etc and now the Home Buyers Report has come back as £160k.... this is £7k under what they paid for it (in a much worse state) 7 years ago, and £12k what we've had accepted on it.

What happens now? Partner is quite happy to pay £172k. A house over the road, exactly the same, has just completed at £175k... I'm quite happy to stick at £172k etc as this is going to be our home for 20/30 years but i'm worried that the building society will refuse the mortgage now.

not sure what to do from here. I know Countrywide have a rep for undervaluing but what happens with the bank now?

EatingGlitter

Just thought I'd add, in regards of the electrics, OH's best friend is an electrician and has already offered to do anything electrical for the cost of materials and a night out on us. Not massively worried about that bit.

whitedot

Does the value make any difference to the bank as long as it's higher than the amount they're lending you?

Been wondering about this situation myself; we're awaiting our survey/valuation back soon.

EatingGlitter

I've read somewhere that if this happens and you're happy to pay it you have to pay the difference out of your own pocket? We've managed to get together a 20% deposit and this would blow it out of the water. OH seems to think that the building society will just lend it anyway... argh he's so naive!

chewmylegoff

it's likely that you will only get a mortgage based on the surveyor's valuation.

so, if you were buying a property for £100k and your mortgage product had a max LTV of 90%, and the surveyor came back and said the place was worth only £90k, then the bank would only lend you £81k max, rather than the £90k you had anticipated.

so now, you need a £9k deposit to get the £81k mortgage. you need to make up the difference by paying cash to the seller, so you can use the £1k you already had (to get the £10k deposit required for the original cost of £100k) plus you need to fine another £9k on top.

if you can bridge the gap with cash you're fine, if you can't then you need to either convince the surveyor they are wrong using comparables, or convince the seller to reduce their price.

even if you can bridge the gap with cash, you may be able to convince the seller to reduce the price on the basis of the 'survey'. worth a try.

InkZ

If you've got a 20% deposit then if you can't negotiate a reduction in price, you'll probably end up paying a slightly higher rate due to not being in the 80% LTV bracket. You've got enough money to get the house though.

First thing I would be doing is trying hard to negotiate a discount on the price. They will have the same problem if they sell to someone else.

DannyboyMidlands

It amazes me that buyers are so keen to pay over the odds and are being regularly saved from their own stupidity by the surveyor. Consider it a lucky escape and offer £160k and not a penny more. What the vendor paid has nothing to do with it's current value.

poppysarah

EatingGlitter wrote: »

Partner is quite happy to pay £172k.

Does he have cash?

No? Then use this as a lever to PAY LESS.

poppysarah

DannyboyMidlands wrote: »

What the vendor paid has nothing to do with it's current value.

Well put!

EatingGlitter

Thanks for all the comments on here, I'm truly surprised at this valuation myself for a 3 bedroom semi-detached with garage in the area that I live....

I'm fine with trying to renegotiate etc but it's my partner being... a stubborn person. I can't seem to get through to him what this means, what it means we should do... he seems to think that the valuation doesn't matter at all when it's pretty darned important. He actually said, and I quote, on the phone to me, "Well we have X amount, the bank will just lend it to us anyway. If not, and we need to renegotiate then the solicitors can do it. I'm not going to".

I'm trying very hard to educate him but he's being very stubborn at the moment. I'm just trying to be realistic and think of every possible outcome so we're prepared... he thinks it's a case of documents in, survey done, we sign some stuff and move in...:(

sonastin

Its down to what LTV you've got now, bearing in mind that the "V" is £160k, not £172k. If your LTV is still within the boundaries of the mortgage you've applied for, the lender will still lend what you've asked for on the same mortgage deal. If its not, I am not sure whether they will a) offer you the same amount on a different product with the right LTV limits or b) offer you the max "L" to suit the new "V" on that same mortgage product. Either way, you'll have to find extra money - either as a bigger lump sum to secure the house or as bigger repayments on a higher interest rates.

Your partner might be right if your deposit is big enough in relation to the mortgage you've applied for. I applied to borrow 65% on a max 70% LTV product. When the nationwide valution was £10k lower, the LTV was still only 68% so it didn't affect the mortgage offer. I tried to renegotiate and the vendor took the house off the market instead so its worth bearing in mind that there can be unexpected consequences to every action! (Found a better house quickly and then the vendor came crawling back to see if I still wanted to buy - but still wouldn't negotiate on price!)