Valuation less than price agreed

ACG

The maximum available in 90% of the property value, the deals become better at 85%, 80%, 75% etc depending on the lender.

If you prepared to go to the price discussed fine, but why not make the most of this little ace. Dont forget when/if it becomes time to sell your effectively going to be in negative equity for a while.

I would rather lose £700 than £25k to be honest but if your happy with the property then i understand where your coming from.

If the vendor wants to pull out then you can still negotiate, but at the end of the day - they want to move too. Put an offer in at the valuation price, if it gets rejected say your prepared to negotiate but not to the original price, if you cant agree then you still have the asking price to fall back on as a worst case scenario - they will be biting your hand off at that based on that valuation.

Im purchasing a property at the minute, the valuation came back £5k lower than the purchase price. I ripped the back page off that said the valuer still recommends the lender offers the full mortgage amount and negotiated the price down £5k in about 30 minutes. I told them the lender wouldnt go to that amount and if my lender wont then nobody elses will either.... to top it off, i didnt tell my mrs that, so i still have £5k in savings for a rainy day that isnt being spent on shoes or holidays

perfecta1

GMS wrote: »

Lose £700 or lose £25,000.

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

might go with your advice

ACG wrote: »

The maximum available in 90% of the property value, the deals become better at 85%, 80%, 75% etc depending on the lender.

If you prepared to go to the price discussed fine, but why not make the most of this little ace. Dont forget when/if it becomes time to sell your effectively going to be in negative equity for a while.

I would rather lose £700 than £25k to be honest but if your happy with the property then i understand where your coming from.

If the vendor wants to pull out then you can still negotiate, but at the end of the day - they want to move too. Put an offer in at the valuation price, if it gets rejected say your prepared to negotiate but not to the original price, if you cant agree then you still have the asking price to fall back on as a worst case scenario - they will be biting your hand off at that based on that valuation.

Im purchasing a property at the minute, the valuation came back £5k lower than the purchase price. I ripped the back page off that said the valuer still recommends the lender offers the full mortgage amount and negotiated the price down £5k in about 30 minutes. I told them the lender wouldnt go to that amount and if my lender wont then nobody elses will either.... to top it off, i didnt tell my mrs that, so i still have £5k in savings for a rainy day that isnt being spent on shoes or holidays

I am for 99% sure that vendors will reject an offer of 105k, 110k or even 120k as we viewed the property in 3rd day of being on the market. I assume, that because of that, they will back out and wait for other, better offers.

The owner is not in rush as he ownes and lives in other house.

DO you really believe that someone will drope the price by 20k??:eek:

(I am not a risky player and that keeps me back by taking risky steps and decisions )

ACG

Each to their own, mine was in more of a rush to sell.

But if you dont ask, you dont get. If you dont ask, your going to pay the full asking price. If you do ask, then you might not.

Its all about the mind games you play with the estate agents, if they think your ready to walk away they will be desperate to keep you - maybe more so than the seller, get them earning their wage.

perfecta1

thanks everyone for replying.

I will contact the EA within 2 days and use the following arguments:

+ if my valuation price is 105k other people will have the same valuation price.
+ People with 10% of deposit won't go ahead with buying the house when find out the real value.
+ property won't gain on value over the years as it already is overpriced and some work need to be done as well
+ house was bought from council over 40 years ago so I assume that owner paid only 25-30% of the full price. He lose nothing when sells cheaper (I know that it's a 'nice' argument


any other ideas?

kingstreet

You were buying for £128k with a £93k mortgage. That's a 72% loan to value and you would have been applying for a very nice rate?

If you proceed with the purchase at £128k, the lender will take the value at the surveyor's level of £104k and will use this for their loan to value calculation as they use purchase price or valuation, whichever is the lower.

They will say that £93k on £104k is 89% and this will result in your mortgage application being declined if they don't wish to offer a mortgage at this loan to value, or the rate increasing substantially.

Alternatively, as Yorkie has suggested, they may be happy to offer you a 75% mortgage, but that would mean an offer of only £78k and the need for you to increase your deposit to £50k.

I would say this;-

He even made a comment that agreed price is reasonable. But still only valued the house for 105k

makes little sense and it may be worth checking the valuation figure is correct before you proceed any further. It may be a mis-type or a figure from a previous report being left in incorrectly.

perfecta1

kingstreet wrote: »

You were buying for £128k with a £93k mortgage. That's a 72% loan to value and you would have been applying for a very nice rate?

If you proceed with the purchase at £128k, the lender will take the value at the surveyor's level of £104k and will use this for their loan to value calculation as they use purchase price or valuation, whichever is the lower.

They will say that £93k on £104k is 89% and this will result in your mortgage application being declined if they don't wish to offer a mortgage at this loan to value, or the rate increasing substantially.

Alternatively, as Yorkie has suggested, they may be happy to offer you a 75% mortgage, but that would mean an offer of only £78k and the need for you to increase your deposit to £50k.

I would say this;-


makes little sense and it may be worth checking the valuation figure is correct before you proceed any further. It may be a mis-type or a figure from a previous report being left in incorrectly.

The property is considered to be a reasonable purchase at the agreed price of £128,000 provided that you are prepared to accept the cost and inconvenience of dealing with the various repair/improvement works reported. These deficiencies are quite common in properties of this age and type and as long as the necessary works are carried out to a satisfactory standard and the property is kept in good repair, we can see no reason why there should be any special difficulties on resale in normal market conditions.

That's exactly his opinion. (but the EA doesn't have to know that )

We are trying to get the lowest % rate as I work part time only and study at the same time. Low repayments are important to us and difference of 30-50 pounds in monthy repayments does matter

By paying full asking price but bearing in mind that the lender will take the value at the surveyor's level of £104k means that LTV is 89% so we will have no more than 11% deposit. Monthly Repayments are 80 pounds higher than with 24% deposit

kingstreet

It sounds like you haven't given us the full picture.

The property is considered to be a reasonable purchase at the agreed price of £128,000 provided that you are prepared to accept the cost and inconvenience of dealing with the various repair/improvement works reported.

Please confirm;-

the value in present condition
any repairs considered essential
the estimated cost of any essential repairs
any suggested retention
the value after essential repairs.

With this information, the guidance so far may be revised as we have all worked on a simple market downvaluation and not one based on heavy essential repairs needed.

perfecta1

kingstreet wrote: »

It sounds like you haven't given us the full picture.


Please confirm;-

the value in present condition
any repairs considered essential
the estimated cost of any essential repairs
any suggested retention
the value after essential repairs.

With this information, the guidance so far may be revised as we have all worked on a simple market downvaluation and not one based on heavy essential repairs needed.

We all know how surveyors rate properties and things to repair? Ratings are 1 no repairs, 2 defects to repair in some time 3 must be repaired.

things rated as 3 (must be repaired)

• [FONT=Arial, sans-serif]Rainwater pipes and gutters- The guttering is leaking and needs cleaning through/resealing or renewing to reduce the risk of rainwater penetrating internally.
  [/FONT]

• [FONT=Arial, sans-serif]Windows (Generally, these are in fair order for the age of the property with no significant defects apparent. However, some localised repairs/improvements are needed. A small number of windows were worn and will require some maintenance and repair including resealing[/FONT]
• [FONT=Arial, sans-serif]Roof structure The roof is formed with conventional timber rafters and purlins supporting the coverings.The roof structure is in fair order with no serious defects evident. Ventilation could be improved. The thermal insulation in the roof space has been improved but you should consider increasing the insulation thickness to at least 300mm[/FONT]
• [FONT=Arial, sans-serif]electric The electric consumer unit can be found at high level within the kitchen. Where visible, the installation has been wired in plastic covered cable.[/FONT]
• [FONT=Arial, sans-serif]water The internal stopcock is under the kitchen sink. A test is required.[/FONT]
• [FONT=Arial, sans-serif]gas Natural gas is connected and the meter is located in an outside meter box. A test is required.[/FONT]
• [FONT=Arial, sans-serif]Central heating and hot water is provided by the combination boiler which is
  located in the kitchen. Servicing and testing is required.[/FONT]
• [FONT=Arial, sans-serif]Drainage We were unable to raise any drainage covers as these were fixed in place and we therefore recommend a full drainage test is obtained.
  [/FONT]

perfecta1

I do not know why someone gives a 3 for something what hasn't been checked like water, heating or gas supply! This is not a reason to underprice the property. [FONT=Arial, sans-serif]Repairs including resealing? My husbad can do this just in cost of materials![/FONT][FONT=Arial, sans-serif]

I am confused because not sure what to think of this report. Shall I contact surveyor and ask any question why he underpriced the property by almost 20%? ( I know I have answears in the report but they are not such obvious for me)
[/FONT]

kingstreet

You need the mortgage report and valuation. The Homebuyer's Report and it's daft numbering system are about as much use as a chocolate fireguard for this job.

These;-

the value in present condition
any repairs considered essential
the estimated cost of any essential repairs
any suggested retention
the value after essential repairs

are on the mortgage report and valuation.