Help! Massive devaluation of S/O Flat

indiegirl_2

I'm just after a bit of advice really...

I have a s/o flat which I'm selling my 50% share of. I had three valuations over the stretch of a month, and went with the highest valuing agents as they were 'convinced' that they would achieve the asking price.

They did sell at the asking price, however my buyers have had their mortgage valuation survey back - and the valuation is very surprising.

On the full 100%, the mortgage valuation has come back 25k lower, which on my 50% share is obviously half of that.

I'm extremely angry at the agents for overvaluing by so much. I have requested that a new contract of agreement is drawn up by them as we were given a fixed price sales fee which was in the bracket of the original selling price. The new selling price is two brackets lower, and I want my fees reduced! However the manager of the agency branch flatly refused my request on the telephone earlier... so I'm not holding out much hope.

The problem that I have is that the house I have agreed to buy was all originally based on the average of the three valuations that I had for my flat (a worst case scenario was on the lowest of the three, but the lenders valuation is less than that!). With the new valuation of my 50% being 12.5k lower, I have a 6k shortfall.

I have options to loan money from parents (dropping out of the house we are buying is a no-no because my OH has set her heart on it) and will take that, but I wondered whether I can ask my vendors to drop 2k off of the agreed price of their house (182k). Is it worth trying that line of thought?? (I'm attempting to siphon money anywhere I can!).

I'm going to speak to my building society to extend my mortgage (although I didn't want to!) as well, and hopefully - even though I didn't want to go to 95% LTV I'm going to have to - I should be able to squeeze it.

My agents (national chain, will never use again) have wriggled out of their excessive valuation by telling me that surveyors are 'tightening the valuations and being extremely mean due to interest rate rises'. A big part of me thinks that the building societies are covering their backs should anything happen to the market, but no one's going to admit that!

My buyers are FTB's and are unlikely to have more than 5% deposit to put down, so I feel that there is no negotiation to be had there. To be honest I don't want to screw them over because I was in their situation a year ago!

If anyone has seen this happen before - please let me know... what did you do and who did you negotiate with??

Thanks in advance.

jonathon

we are just putting uor s/o house up for sale. fisrt thing we had to to was offer it back to the housing assocation. we had to pay to get it valued through them it came back as £68k for our 50% in the meantime we had 2 ea value the house and thay both priced it at around £140k for 100% so we were happy with our £68k for 50%
have you thought of getting an independant valuation ?

indiegirl_2

It's a bit late for our independent valuation now to change things!

We don't have to get ours done until our buyers are confirmed and approved by our Housing Association. Only then does our independent valuation come into play (and only lasts three months anyway). As it is, due to various issues with the estate agent we've been 'selling' for two months already!

hearts

Have you thought of taking your mortgage INTERST ONLY? Cuts repayments till you can get a bit of equity then remortgage if you wish.

With regard to your fees. Is it not a % of the selling price?

danlightbulb

Presume you havn't exchanged contracts yet?

Have you threatened to pull out of the sale to see if EA will reduce their fee? You have to be prepared to go through with it though.

If you can't get the required price for your property then you either have to pass that loss on up the chain or pull out and wait for another buyer.

If it was me i'd reject the lower offer and say to the buyers 'sorry but we can't afford to move with this lower offer'. That is unless you can pass the loss on up the chain.

Melissa177

Does the buyer's mortgage company have a habit of undervaluing properties?

25K is a big difference!

Romani_Ite_Domum

Melissa177 wrote: »

Does the buyer's mortgage company have a habit of undervaluing properties?

25K is a big difference!

Read this recently

The Financial Services Authority (FSA), which oversees the financial services industry, has issued a stark warning to mortgage lenders – make sure you’re robust enough to get by if house prices dropped by up to a fifth.

Perhaps they are starting to take notice?

indiegirl_2

I don't know anything about Leeds Building Society (who are my purchasers BS), so I can't comment on the devaluing.

The Estate Agents are to blame here, and so far have refused to change their fees to reflect the new sale price. We agreed a fixed fee (sadly not a %) based on the original marketing price. We have been back to them and said that as we are selling over 12k less than the original agreed price, this now makes their agreement null and void in my view (as they aren't selling at the price originally agreed). They have so far refused to renegotiate their fees.

Would involving the OEA be any use?

Interest only may be an option, or perhaps a part & part split of the mortgage until we can generate some income to pay a lump sum off and remortgage at a later date... I'd not thought of that so I will have to consider it carefully.

lynzpower

Maybe the lender has downvalued it BECAUSE its shared ownership.

I had exactly the same concerns when I sold mine - but we found a cash ( sort of) buyer in the end.

Whos the lender BTW?

eek

If you flat is suddenly worth £25k less than what the estate agent thought it was worth are you really, REALLY sure that the house you are moving too is not similarly over priced?

I would start approaching the rest of the chain to see how much they are willing to knock off their prices to allow the chain to complete otherwise you will be forced to pull out.

As for the estate agent try the same tactic. I'm pulling the flat off the market unless I see a discount. Done in a way that shows that you mean business its bound to work.

Redbedhead

Sorry to hear this Indiegirl.

Is it the EA's beginning with H?

Re getting the house price dropped of the one you are buying - did anything come back in the survey on that one that you can use to get the price down a bit?

How long do you have on your agreement with the EA? Could you withdraw the flat from the market, give notice and sell with someone else? Or does that mean you will lose the house you are buying?

If it is SO is it with Midsummer - is there anything they can do to help?