Homebuyers report valuation lower than accepted offer

Hi,

I had my offer accepted to buy a property for £537,500 (asking price was £545,000). Today I have just received the homebuyers report and they have valued 7% lower at £500,000. I am yet to hear from my mortgage lender, but I am pretty sure that this is going to cause me difficulty with them.

The rest of the report didn't find anything too scary - a little bit of suspected damp (which Victorian properties don't have that?), but nothing major to cause £40k of price drop.

There were 2 other parties bidding for the property when I had my offer accepted, so I worry that if I try to negotiate to £500k (my only real option considering I probably wont have a mortgage otherwise), then I will potentially lose out altogether as the seller could go to one of them.

Any thoughts/advice?
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Replies

  • gingeralangingeralan Forumite
    224 Posts
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    avr79 wrote: »
    Hi,

    I had my offer accepted to buy a property for £537,500 (asking price was £545,000). Today I have just received the homebuyers report and they have valued 7% lower at £500,000. I am yet to hear from my mortgage lender, but I am pretty sure that this is going to cause me difficulty with them.

    The rest of the report didn't find anything too scary - a little bit of suspected damp (which Victorian properties don't have that?), but nothing major to cause £40k of price drop.

    There were 2 other parties bidding for the property when I had my offer accepted, so I worry that if I try to negotiate to £500k (my only real option considering I probably wont have a mortgage otherwise), then I will potentially lose out altogether as the seller could go to one of them.

    Any thoughts/advice?

    Probably other buyers will have similar issues. you will just have to try and renegotiate or put much larger deposit down.
  • JQ.JQ. Forumite
    1.9K Posts
    If it is only worth £500,000, then if the seller pulls out and goes with one of the other parties then they'll have exactly the same problem.

    How do you know any of the other parties actually bid any more than £500,000 anyway?

    I'd be reducing my offer to £500k.
  • DannyboyMidlandsDannyboyMidlands Forumite
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    Why the sad face? The surveyor has just saved you £37,500.
  • go_catgo_cat Forumite
    2.5K Posts
    I've been Money Tipped!
    Any other buyer would probaby get the same price so don't worry

    Reduce your price to £500k if the sellers refuse they are in cuckoo land

    This is the exact reason why mortgage companies always value properties
  • kingstreetkingstreet Forumite
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    What does the mortgage report and valuation say?

    Same surveyor for both, or two different ones?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • brit1234brit1234 Forumite
    5.4K Posts
    I would reduce your offer to £500k. You nearly over payed in a falling market, the survey has saved you a lot of money.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

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  • poppy10_2poppy10_2 Forumite
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    avr79 wrote: »
    There were 2 other parties bidding for the property
    Says who? It is a common estate agent tactic to pretend that there are rival bidders in order to get you to up your offer for fear of losing out.
    Even if these supposed bidders to exist, they will face the same issue when they get there mortgage valuation done. Relax and don't pay a penny over £500k.
    poppy10
  • jimbogjimbog Forumite
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    Send the vendor a copy of the valuation perhaps?
    Gather ye rosebuds while ye may
  • avr79avr79 Forumite
    5 Posts
    Thanks for the quick responses everyone!

    I'm following up on it in a few different directions - I've informed the Estate Agent for 2 reasons:
    * The surveyor was from out of town and the EA reckons that he probably doesn't know the property values in Hackney, so the EA is pulling together evidence of local sales in the same price bracket to prove the higher value (obviously that's in his interest to get a bigger commission).
    * He can start to prepare the vendor with the bad news that there is a pricing issue that they may need to remedy (i.e. drop the price).


    I'm also going to follow up with a full damp survey from an independent surveyor in order to at least have all the information in my hands.
  • jeejee Forumite
    288 Posts
    Drop your offer based on the survey. I had a flat surveyed for a remortgage in east london few weeks ago and the surveyor valued it much less than other sales. The market is soft and they won't negotiate on the valuation as they're covering their own back as well as the bank.
    For me it wasn't great news but I'd be pleased if I were you. The EA knows that anyone going for a mortgage valuation is going to get the same/similar valuation and make that clear to the vendor.
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