Lower valuation!

The_Pixi

Hi,

I am buying my first home and I received news today that the property has been valued 25k lower than the asking price - I offered the full amount.

Basically, what kind of position does that put me in as a buyer - my mortgage company obviously wont give me the mortgage with such a discrepancy.

will the vendor accept the lower valuation? I know no one can answer that, looking to hear about other experience in this situation?

kingstreet

Contact the selling agent and tell them of the downvaluation.

Ask them to put the valuation figure to the vendor as the new offer and see what comes back.

Are there essential repairs listed? Is there a big difference between the valuation now and after repairs? Have you been asked to obtain specialist reports? Any suggested retention?

The_Pixi

kingstreet wrote: »

Contact the selling agent and tell them of the downvaluation.

Ask them to put the valuation figure to the vendor as the new offer and see what comes back.

Are there essential repairs listed? Is there a big difference between the valuation now and after repairs? Have you been asked to obtain specialist reports? Any suggested retention?

Hi Thanks for replying,

Well I dont want to give to much away in case they also read the forums

However there is nothing wrong with the property repair wise, I think the owners may be too optimistic, being a 1st time buyer I wasn't sure about all the valuation stuff.

The flat is from a vendor that does property up and sells on - which is why I am surprised they valued the property so high?

I really like it and I just don't know how realistic it is to think they will have to accept a new offer - I guess short of a cash buyer with no sense they wouldn't be able to shift it after that valuation without accepting a lower offer?

jamesml

A developer is probably aware of the price he could actually expect to get, and has probably added an additional element into the price to take into account negotiation.

Go back and explain that the valuation has come in at £xxx,xxx and that is the most you would be able to offer.

loobylou232

Prepare to move on.No matter how much you like the flat, 25k of negative equity is a noose around your neck that you don't want. Unless the vendors accept the lower valuation, leave it be. There are other flats.

Tancred

The_Pixi wrote: »

Hi Thanks for replying,

Well I dont want to give to much away in case they also read the forums

However there is nothing wrong with the property repair wise, I think the owners may be too optimistic, being a 1st time buyer I wasn't sure about all the valuation stuff.

The flat is from a vendor that does property up and sells on - which is why I am surprised they valued the property so high?

I really like it and I just don't know how realistic it is to think they will have to accept a new offer - I guess short of a cash buyer with no sense they wouldn't be able to shift it after that valuation without accepting a lower offer?

How does the seller's valuation tally with the Zoopla estimates?
Such a huge £25k disparity seems very strange to me. You might want to consult another mortgage provider for a second opinion.

mrginge

Tancred wrote: »

How does the seller's valuation tally with the Zoopla estimates?
Such a huge £25k disparity seems very strange to me. You might want to consult another mortgage provider for a second opinion.

Zoopla probably estimates it at 25k over asking price

kingstreet

What do recent sold prices for similar property in the area indicate would be a reasonable value?

TBH if the property has been recently renovated, the builder/developer may be expecting a "premium" for the property being occupied for the first time since it was done.

This can cause a problem for some lenders who will apply their reduced newbuild maximum loan to value if/when it becomes apparent to them.

Halifax for example;-

An initial occupancy/new build property is classed as any property being occupied and/or sold for the first time on the open market in its current state. These will fall into one of the following categories:

Newly built property.

Refurbished property i.e. refurbishment of an existing residential property, typically a re-furbished property will be considered as initial occupancy where the vendor is a builder/developer and the property has been vacated to allow for the refurbishment to be undertaken.

Newly converted property i.e. conversion of an existing non residential property, e.g. an existing mill converted into flats.

All lending decisions are based on valuation or purchase price (whichever is lower).

A property, either new or converted (as above), that has been tenanted through a 'try before you buy' or 'rent before you buy' scheme and is now offered for sale by the builder/developer.

Maximum LTV on new build properties (houses and flats) is 80% (65% if the scheme type is a second home loan or buy to let).

thelem

Tancred wrote: »

How does the seller's valuation tally with the Zoopla estimates?
Such a huge £25k disparity seems very strange to me. You might want to consult another mortgage provider for a second opinion.

Please don't trust Zoopla estimates - the surveyor has access to much, much more information than Zoopla, and will have come to a better estimate.

You could ask for a second opinion from another surveyor if you wanted, but I suspect the vendor was expecting to receive an offer below asking price and was delighted when your offer came in. Was it your first offer on the property, or did the vendor refuse a lower offer?

tim123456789

The_Pixi wrote: »

Hi Thanks for replying,

Well I dont want to give to much away in case they also read the forums

However there is nothing wrong with the property repair wise, I think the owners may be too optimistic, being a 1st time buyer I wasn't sure about all the valuation stuff.

The flat is from a vendor that does property up and sells on - which is why I am surprised they valued the property so high?

I'm not. That's exactly the sort of seller who will over-price

tim

raindudu

This happened to us too. We later found out there is a reason that the valuation is much lower. I think you should use this to re-negotiate the price. We managed to reduced 15k... Definitely worth a try.. Good luck.