I don't get it

Miss_Merlot

We had a valuation today which we are keeping our fingers crossed will be ok.

My husband says that if they put the value lower, then we actually have to pay a bigger deposit.

I don't get it. Surely if the valuer says the property is overpriced, the seller has to drop the price (which we are paying asking price for), and 20% of a lower value is less....?!??!

cmorrison6

Just because the valuer, values the property lower than the agreed asking price, it doesn't automatically mean the vendor will lower their price.

Some renegotiating will need to commence between you and the vendor.

Miss_Merlot

I still don't see how it follows that we would have to stump up a bigger deposit though.

Dan-Dan

because the bank would lend you less

nakiwala123

If the vendor is not willing to drop the price then either you move on and find somewhere else to buy or if you like it so much then you would have to stump up the difference.

The vendor, however, will have to be careful if they decide to remarket the property as they might have the same issue with the nexty buyer's valuation.

Dave_Ham

For simplicity, say you are buying a property at £200k with a 75% LTV product and therefore your mortgage is £150k

As an example the property gets "valued" at £180k. The lender will only then lend on the same product - £135k.

Your deposit then increases from £50k to £65k or you take a lesser product with higher monthly repayments.

Clearly this is why someone above said you speak to the vendor about the price. Try not to worry about this, as often is not an issue and you can second guess all types of problems throughout the process and not encounter them.

Fingers crossed.

Miss_Merlot

Oh I seeeeeeeee...

The other option would be to drop our mortgage application from 20% to 15%, which could make up any difference.

Is it possible to do that mid-application, on the basis of the valuer's assessment?

Miss_Merlot

That's what I thought - too.

nakiwala123 wrote: »

The vendor, however, will have to be careful if they decide to remarket the property as they might have the same issue with the nexty buyer's valuation.