Valuation less than price agreed

perfecta1

Situation is:

we offered 128k and our offer has been accepted. we have 35k deposit so we want to lend a 93k. Bank gave us a green light 3 weeks ago and informed us that our application has been accepted.

Today the property has been valued at price (!) 104k so it is 25k less than price agreed.

Now, we haven't heard anything from bank yet but our concern is that bank may refuse to lend us money.

Anyone has a consolation words to nor worry???

laurel7172

Consolation? Are you not even slightly tempted to try to renegotiate the price?

opinions4u

perfecta1 wrote: »

we offered 128k and our offer has been accepted. we have 35k deposit so we want to lend a 93k.

You want to borrow. It's the bank who lend.

Today the property has been valued at price (!) 104k so it is 25k less than price agreed.

The valuer may have made key comments about the state of the property and how he/she reached this figure. Read them carefully.

But this is a great opportunity for you to renegotiate the price downwards.

Now, we haven't heard anything from bank yet but our concern is that bank may refuse to lend us money.

They may offer a lower mortgage amount than the figure applied for.

GMS

If you saw a car on a dealer forecourt for £9.995 would you pay this, try to negotiate a bit less or offer £12,000?

If the £12,000 then worry about the bank lending you enough. If you would pay the real value then renegotiate the price.

If you still want to pay higher do you want to buy a car?!!

ACG

If the price has come back less than expected there is a reason for this.

If the price has come back like that for you, then it will most likely come back at that for others too.

This leaves 2 options if you still want the property - renegotiate the price, or the seller backs out.

perfecta1

opinions4u wrote: »

You want to borrow. It's the bank who lend.

The valuer may have made key comments about the state of the property and how he/she reached this figure. Read them carefully.

But this is a great opportunity for you to renegotiate the price downwards.

Sorry for my mistakes, ENglish isn't my first language

laurel7172 wrote: »

Consolation? Are you not even slightly tempted to try to renegotiate the price?

we already have negotiated the price down by 8k.

In our opinion the property is worth the money. CLose to town, bus stop just behid the corner, big garden, big garage. Everything we want. If bank decide to lend us less money we simply won't afford to buy the property

The funny things is that everything is OK with the property. No significant problems. He even made a comment that agreed price is reasonable. But still only valued the house for 105k

perfecta1

ACG wrote: »

If the price has come back like that for you, then it will most likely come back at that for others too.

yes, but someone who really likes the property and pay by cash or get only a small mortgage won't be bother by the valuation price.

I know that I might not be very reasonable and stubbornly want to buy that house but I feel like this is one off opportunity. That kind of houses don't show up on the market very often

ACG

The chances of someone wanting to buy a property and lose £25k overnight is probably quite slim.

I would be using this to my full advantage, telling themthe valuation that has come back. See if you can get it for that, may as well start at the lowest possible. If your prepared to go higher than that then thats a bonus for them - make sure they realise it.

Yorkie1

The bank is unlikely to refuse to lend you money. However, you are probably applying for a mortgage which has a certain ratio of deposit to mortgage e.g. they will only lend a maximum of 75% of the property value (loan to value).

So, using that %, if the property is now valued at £104K, they will only lend £78K at 75% loan to value. If the sellers won't drop the price of the property to match the new valuation, you would need to find all of the difference between £128K and £78K - i.e. £50K.

In this situation, you go back to the sellers and tell them of the valuation. If they won't drop the price to a point where you can afford to buy it, then you will have to walk away.

perfecta1

ACG wrote: »

The chances of someone wanting to buy a property and lose £25k overnight is probably quite slim.

I would be using this to my full advantage, telling themthe valuation that has come back. See if you can get it for that, may as well start at the lowest possible. If your prepared to go higher than that then thats a bonus for them - make sure they realise it.

SO you suggest to be a tough player?

It came through my mind to go to the estate agency and play by this card but what if the seller backs out? We will lose 700 pounds :cool: We have seen lots of properties but didn't like nothing else?

GMS

perfecta1 wrote: »

SO you suggest to be a tough player?

It came through my mind to go to the estate agency and play by this card but what if the seller backs out? We will lose 700 pounds :cool: We have seen lots of properties but didn't like nothing else?

Lose £700 or lose £25,000.

I know which I would choose. Go back to the vendor and reduce offer based on valuation.