Valuation less than offer by 13k

xyz123

nigthmare scenario! mortgage company valuation is 13k less than our offer. i have the home buyers report which ntoes a lot of things but mainly following:

1) there is possibly some asbestos in one of the ceilings
2) Electrics appear old. main consumer board is old dated type with circuit breakers and on/off style switches fitted
3) hot water tank is old and a gas safe engineer should safety test this installation.
4) crack in garage roof
5) old, double panel type radiators

House had three offer on the house. it was on for £360k, first offer was £354. We put an offer of £345 and was rejected. £354k was accepted, house taken off the market but that fell through after 2 weeks. then ours was accepted at £350 and there was a third offer in the same region.

Our offer was for £350k, valuation is £337. We were looking for a mortgage of £255!. i dont know what happens now. dreams might be shattered!!!!!!!!!!!!!

will speak to EA to see how to renegotiate and am waiting to hear from mortgage company re what to do.

any advise on what to do.please!!!!!!! am happy to PM/email to someone the scanned report if anyone has some time to help us!

jc808

So you want our help to pay more than its worth?

AFK_Matrix

One of 3 options really:

1. Negotiate with vendor to drop the price 13k
2. Find the extra 13k your self from savings etc
3. Walk away and find another property.

xyz123

jc808 wrote: »

So you want our help to pay more than its worth?

No i dont want your help in that particular aspect.

being FTB, i want to ask how to go forward? e.g. can i share detailed report with the EA, when to talk to them, shall i approach my solicitor first, how to renegotiate, what are my mortgage company likely to do etc.

Funkygibbon

xyz123 wrote: »

No i dont want your help in that particular aspect.

being FTB, i want to ask how to go forward? e.g. can i share detailed report with the EA, how to renegotiate, what are my mortgage company likely to do etc.

Go back to the EA and tell them due to the report your revised offer is £337k, take it or leave it.

irishcol

xyz123 wrote: »

No i dont want your help in that particular aspect.

being FTB, i want to ask how to go forward? e.g. can i share detailed report with the EA, how to renegotiate, what are my mortgage company likely to do.

So if you need to borrow £255k, they will consider that as >75% LTV, which may well mean a higher interest rate than 255/350 = 72.8% LTV).

As already advised, if you're happy to overpay the 13k from your own savings, then you can do that, but it would be a bit silly. Unless this is the 1 in a million hosue that you woant to live in forever, and can afford to write off £13,000 to get the house of your dreams.

The best strategy is to advise the estate agent that the valuation has come back £13k less than your offer, so you will need the vendor to reduce the asking price. And be prepared to pull out if they aren't willing to neogtiate on it. Any future buyer (who needs a mortgage) will have the same issue, so it's in the vendor's interests to consider helping out.

sirmosh

If you're really willing then you can give evidence to the lender it's worth more i.e. identical properties in the same area selling for that price or get your own valuation done by a professional.

You could also try another lender who could possibly value it differently. Personally I wouldn't want to pay over the odds and so I'd seriously consider offering the reduced amount or walking away.

Dave_Ham

Firstly ask the mortgage company/surveryor if they would consider the valuation if some of the works were undertaken now?
Chances are they will say no without another valuation and fee. I would then go back to EA (you can share report) and tell them that either you buy at £337k or they do the works and obtain proof. You can either then approach bank or fund from savings the difference.

Would imagine the seller would accept as they are probably part of a chain and alternatively as soon as they try to get asbestos sorted appropriately the price will be high.

That said, are you not worried about some of the valuers concerns, specifically the asbestos one....

The_J

Right, so you've gone for a 75% LTV deal yes? So the maximum loan is £252750, i.e to make this purchase go through at the current situation you need to find an extra £2250 from savings.

Just because the valuation has come back less doesn't mean it's right although the issues illustrated do explain a few things (was the property sold with these issues highlighted?). If not, go back to the estate agents and say your surveyor has advised you to drop the purchase price to 337k to account for the cost of the work required.

If they say no then you can negotiate the price.

ruggedtoast

You dont say whether you think the valuation is wrong or not?

I would be angling for a discount from the vendor rather than trying to find a way to renegotiate the survey. If they lose you they have the prospect of the same thing happening again and again anyway, for the sake of 13 grand on a £300k plus house they may not want to risk it.

SecondLegDownIsTheBigOne

Great news! The valuer is protecting you from overpaying by 13k!