Valuation lower than sale price

AliceBanned

I did think I was being played by the EA but at the same time I thought it was worth that bit more.

Once I tell what it is I'll get loads of people telling me to back off, as it is a shared ownership place and I've had to consider for a long time whether it is worth going SO, for the location and finally decided that yes, it was.

I also know the vendor is keen to sell quickly (not sure why or whether this is more of the EA putting pressure on).

I'd be willing to meet them in the middle.. but the lender said this price would not go on their paperwork. Problem is I don't have that bit extra but could borrow about £2k from a friend or family.

As it is SO i'd be effectively putting the property price up (on the 100%) by £7k over the original asking price. As I want that street and no others are likely to appear for some time (or again, as there are very little SO in the area) I was willing to pay a bit more. It is close to a station with good parking, no street noise and rail like to central London in 25 mins. For me working in London it is ideal.

AliceBanned

PS not heard back from vendor yet and haven't told them I will pay some of the "2.5k. Not quite worked out how as it will need to go via the solicitor, but is not part of the deal with the lender so they are not going to recognise it in the sale.

TrickyDicky101

If it's shared ownership then I'm afraid I think you are utterly mad to consider paying any of this £2.5k. The vendor is highly unlikely to have alternative purchasers. You have been played.

AliceBanned

OK thanks. I was messed around by the EA. I'm waiting for the vendor's response but am not now considering paying the extra.

You say this, but it is a highly desirable area - the other flats are over £220k and more importantly, I love being there and it is convenient. I don't think all SOs are risky - but most of them probably are. I thought long and hard. My reason for not mentioning it earlier was that I know people would try and persuade me against it..I've already been through that in an earlier thread..

xyellowx

pjread wrote: »

Another consideration, is this 2.5k on a 30k flat in outer liverpool or a £2m flat in kensington? if the former run for the hills, if the latter suck it up...

why would this matter its still 2.5k overpriced no matter were in the country it is

GDVS

xyellowx wrote: »

why would this matter its still 2.5k overpriced no matter were in the country it is

2.5k is 1.25% of 2 million and 8.3% of 30k, that's the difference. The location was only illustrative, there aren't many 2 million pound flats in Liverpool.

AliceBanned

It does make a difference where it is as well if you look at the trends in values. I know it isn't possible to be 100% accurate but there are trends. An upward trend would mean spending the extra £2.5 is less of a risk.

Dick_here

This is where property dealings are so unnecessarily tricky and confusing.

If the survey was done up front and the EA had to advertise it at that price, then everyone would know where they stood. The survey value is 'what it's worth' and that should be made clear. If the OP decides to offer more that's entirely up to her, but it won't come from a mortgage offer it'll need to be from savings.

As things stand in this case, you've offered X but the survey say it's worth Y (less), then you reduce your offer to Y if you've got any sense.

ging84

I think things get very complicated with shared ownership properties
2 years ago i sold my shared ownership property on the open market, doing that they call simultaneous stair casing, the independent valuation for required by the housing association to value their share was much lower than the offer, which worked out well for me, as they only wanted 60% of this lower value.
This survey was disclosed to the buyer during the conveyancing and it was queried, my response was that this was a conservative estimate based on it's value as a shared ownership property, this was accepted and the sale went through

AliceBanned

Thanks. Very helpful. What is complicated also is the fact that I was going ahead and had an offer accepted at the lower value, in Jan this year and then pulled out as I had hardly seen any properties, various reasons but after more searching I decided that flat was the best I could get and would be a lovely home, and despite SO I wanted to live there, although ideally I would have liked to purchase 100%. So when I pulled out it went onto the open market and apparently there were further offers, and the EA were telling me the original price I was going to pay was "not enough". So I decided I wanted it so would go a bit higher, let's face it not a huge amount really £2.5k, but when the valuation came back I realised I could be in negative equity from the beginning and I was advised to try and get the price back down which seemed sensible.

I may go slightly higher if this offer is refused, but will tell them it may take a month or so longer as I don't have the funds without it being covered by a mortgage. The thing is though I know the vendor was previously willing to accept the original (£2.5k lower) price, but I let it go. The EA knows I was buying before and let it go, i had to tell them obviously and I do feel they probably played me at that point (possibly).