Is the lender's valuation report reliable?

dominoman

We offered 468 000 for a house two months ago and it was accepted.

However since then we have had three key pieces of information that mean we are looking for a discount:

1. The house has subsidence history and has been partly underpinned
2. The house needs a whole new roof
3. Our independent building surveyor valued the house at 425k maximum

I have gone back to the agent asking for 20k off the price (halfway between the price we offered and the valuation). He has said the vendor will say absolutely no discount at all, unless we can show the mortgage offer valuation is lower than the original 468 price.

Unfortunately our mortgage valuation is saying 468k. However, we have a 40% deposit so is the mortgage valuation reliable? I am at the point where I wish they had valued it under! Without that I don’t think I can get a discount. What would you do?

DRP

I think 'reliable' is the wrong word.

You valued the house at 468k when you made the offer you were presumably happy with that at the time.

Two 'experts' have valued the house and there is less than 10% difference between the higher and lower.

I think +/- 10% is about as accurate as you can get when it comes to something so subjective.

dominoman

DRP wrote: »

You valued the house at 468k when you made the offer you were presumably happy with that at the time.

Yes, but then we found out about the subsidence afterwards, and also the survey showed urgent work was needed. That's why I want an adjustment.

The valuation "discrepancy", if that is what it is, is the thing that the agent is using to justify that the vendor will not change the price. Is that always the way (that the vendor will not go lower than the mortgage valuation)?

Thanks

tim123456789

I think that if I was spending that sort of money I would walk away from a property with a subsidence history unless it was being sold at a substantial discount.

Do you know what the vendors paid for the property. Did they get a discount when they bought?

dominoman

tim123456789 wrote: »

I think that if I was spending that sort of money I would walk away from a property with a subsidence history unless it was being sold at a substantial discount.

Do you know what the vendors paid for the property. Did they get a discount when they bought?

No. The subsidence happened more recently. It is underpinned and I like the house, but we are paying a hefty premium to market value not getting a discount. Houses are in short supply in most of London.

I wish the lender's valuation hadn't just valued it at our original agreed purchase price, because that is undermining any attempt to get a discount for the works that were subsequently found to be needed.

Has anyone got a discount following the structural survey, even though the lender's valuation was at the original agreed purchase price?

Full_of_angst

dominoman wrote: »

I wish the lender's valuation hadn't just valued it at our original agreed purchase price, because that is undermining any attempt to get a discount for the works that were subsequently found to be needed.

QUOTE]

Perhaps it was priced to reflect the subsidence? If that was the case then the vendor shouldn't have to reduce it again. Personally I would think long and hard before buying a house with subsidence, however, if the price already reflects this I would not be asking for a further reduction. That being said, if the vendors knew about the subsidence it was wrong of them not to tell you at the start.

Thrugelmir

Forget the valuations. You need to make a revised offer on the basis of the cost of the work that is required. Then it's up to the vendor to accept or decline.

Being lower the lender will automatically revise it's mortgage offer. All the lender is interested in is security for the loan. With a 40% deposit being injected. Lender has a very low exposure risk even if a fire sale was necessary.

janiebquick

You have revised your offer and the vendors have refused it. Start looking for another house.

pjread

You might find if they realise you're really pulling out they'll start talking or the agent will call you back in a few days. All the time you're on the fence, they can see you toppling in to pushing on at the offer price.

(and if you're happy to, that's not necessarily wrong...)