Valuation lower than agreed price

hazza74

We put a bid in for a property which was accepted. The bank arranged for a valuation which has now come back stating that the property is worth nearly 20k less. The surveyors have undervalued this property and the vendors and myself are very shocked.

The vendors have agreed to reduce the price by 5k, what are our options?

We cannot afford to put anymore money in ourselves, would our brokers (London and country) find another mortgage provider?

Would the bank in this case Santander accept another valuation?

Could we contest the valuation?

Regards.

Thrugelmir

hazza74 wrote: »

Could we contest the valuation?

On what basis?

hazza74

Well other properties in the area have sold for more for starters, the house is in pristine condition compared to other houses on the same street for sale at around the same price.

We really need some advice...

TonyMMM

Reduce your offer by £20k - the vendor may instantly refuse, but leave it on the table and give them a few days to think about it .... any other buyer (who needs a mortgage) they find is likely to come up against the same problem, so the vendor may decide to be realistic.

Thrugelmir

hazza74 wrote: »

on the same street for sale at around the same price.

On sale prices aren't the basis for contesting.

What's the offer price, as although £20k sounds a lot of money. As a % it may be relatively less.

hazza74

Offer price is £118.950

Valuation is £100.000

The vendors purchased the house 7 years ago for £112.000 and have spent a bit doing it up including new roof tiles, new conservatory....

shortchanged_2

hazza74 wrote: »

Offer price is £118.950

Valuation is £100.000

The vendors purchased the house 7 years ago for £112.000 and have spent a bit doing it up including new roof tiles, new conservatory....

They bought during the boom years. Unless you are an area where the market is particularly strong, though I doubt it looking at the price you are paying then expect the valuation to be less than what they paid for it. In weak areas surveyors are being particularly conservative with valuations at the moment.

hazza74

So basically then we are stumped.

I can't see the vendors selling at a huge loss, their estate agents said the same thing happened to another property a while back, and they had another valuation done, it was the same as the agreed price. So he then said the vendors would put it back on the market and try again, I can't see the valuation being any near the agreed price so like tonymmm said I think it would be wise to put the £100k offer on the table, cannot see them accepting.

chambta

You can probably contest the valuation but would need evidence that the valuer has made a mistake which in this case would seem unlikely. You could apply with another institution and hope for a different result but you could end up with the same person doing it, or at least the same company!

Or alternatively you take it as a hint that it's overpriced and you walk away.

hazza74

chambta wrote: »

You can probably contest the valuation but would need evidence that the valuer has made a mistake which in this case would seem unlikely.

Why would it seem unlikely? I don't get how the valuation is 17% or so less than the price! I mean how did the estate agents value it what they did, they are adamant that their value is correct. I understand if the valuation for a couple a grand under but nearly 20k? How can they be so wrong...

opinions4u

I always find these "I want to pay thousands more for something than it's worth" posts baffling on a money saving web site.