What happens if the lender's valuation is lower than the accepted offer?

martin2345uk

So we had an offer accepted at 194k - we're about to have HSBC's valuation done. Is it common for it to be vastly different to the agreed sum?

If it's more, are the vendors likely to demand more money?
What if it's less?

Can't quite get my head round this part...

Thanks

Bluebonnie

How would vendor find out what valuation came back to your lender?
Vendor only finds out what his solicitor tells him. The valuation is between you and your lender.

jackomdj

The vendors won't see it. More often than not it is the same ;ie them telling the bank it s worth your offer) but if it is less you can try to negotiate it down. if they wont you may have to pull out or not depending on your loan ratio.

martin2345uk

Ah ok, didn't realise that the results didn't get shared with all parties.

Ok well I will just have to hope that it comes out at roughly what we offered!

Thanks guys, as always!

chappers

the lenders just want to make sure that your property is worth enough to cover the money they are lending you, if they value it way below they may not be willing to lend you as much money though.

ACG

The valuation will just match what your offer is, it will never be more. It is occasionally less.

My house came back about £3k less than i bought it for, the lender ignored it and proceeded with the offer anyway. If that £3k was £10k then it might have been a different story.

Werdnal

If they find some specific problems with the property which affect its value, they may also give you a mortgage offer, but specify a "retention" amount until X, Y and Z are put right - then they revalue it and release the withheld amount.

We had this when we bought out current home 20 years ago. We wanted to borrow £30K, lender stated they would give £25K initially, and the remaining £5K after we have uprated the bathroom and kitchen (both of which were substandard). I think we had 3 years to do the work and request the money was released.

In the end, we managed to scrape together the extra money and told them we didn't need the £5K, so reduced our borrowings anyway.

Riggster

The mortgage valuation will not come back as being more than you've offered.

Your mortgage provider want to ensure that should you default on mortgage payments they can quickly and easily sell the house and get their money back.

The valuation could potentially come back as lower than you've offered. If, so then it would be worth considering why this is so. Have you put in an offer that is unreasonably high?

Even if the valuation does come in below your offer, this shouldn't matter to your mortgage as long as the loan:value ratio is still low enough for your mortgage product.

I bet you your valuation comes in at exactly £194k.