FTB - Valuation lower than offer

KierzUK

Evening all, newbie here but long time peeker.

Bit of background, I'm a FTB on my tod. Have had an offer accepted of 138 for a property listed at 140 using the HTB scheme for a mortgage of 131 with Natwest.

Today gave them a call and found out the valuation had been done but only valued the property at 130!

Now I was a little bit heeved having been very careful monitoring prices of similar propertys, and in my eyes it's well worth the 138, however understand Banks valuers tend to down value.

The case is currently with their underwriters and I should hear back tomorrow but I think it's unlikely to be good news.

So I am assuming that leaves me with the following options:

1 - Offer 130 to the vendor. (the vendors apparently had rejected a cash offer of 136 prior to accepting mine! This may have been estate agent hot air though...)

2 - Try and find extra funds to better the LTV

Now option 2 really isn't an option as I do not have the funds available nor any relatives who can help.

If I were to ask for a revaluation I am assuming it would cost? And is it even worth bothering?

Option 1 if what the EA had said was true is also looking unlikely. The sellers are looking to relocate but currently haven't put an offer in on anywhere yet. My offer was accepted over a month ago.

Any advice or comments would be great, feeling a tad lost and deflated right now with the time and valuation fee potentially wasted. On the plus side, financially the only hit if it falls apart is 240 pounds, but this place is so lovely itd be such a pity if it doesn't work out.:(

mail2z

Very difficult to convice the lender for reconsideration. Are you getting carried away in trying to out offer the "cash" buyer?.

Put forward your revised offer of 130k to the seller giving the valuation as the reason and let it sit on the table, you will know soon if it is hot air offer from the cash buyer or a real offer. My guess he will still you as a buyer than the cash buyer for some vague reason :-)

KierzUK

Thanks, may not be a bad shout.

They did however reject my first offer of 136 and said 137 would be accepted and it was.

For all I know this may have also been a bit of a ploy by the estate agent again doing his bit for the seller, perhaps smelling that I'd go that bit higher as a keen FTB.

Is it worth going straight to the EA tomorrow with an offer of 130 without waiting to hear from the underwriter? Or should I hold fire.
(Patience isn't one of my qualities sadly! I'm working on it with this property purchasing carry on!):rotfl:

firefly72

I posted last week that I'm facing a similar issue and am in a similar quandary! Currently trying to negotiate with the seller as well as waiting to hear from underwriter.

A lot of the advice I got was to stick to my guns and get the seller to reduce the price, but I understand how hard it is when the property is really nice.

Good luck.

ethank

Hope that this resolves itself for you. I would make the seller aware of the valuation.

henrik1971

Friends we know recently sold their house at auction for £165k, but then the buyers mortgage company's valuer said it was only worth £140, and so the same kind of difficulties arose.

In this case the valuer was probably wrong as the house had several people bidding upto the £165 level, and so what better evidence of market value than that?

Your valuer would have had a reason to value how he/she did. They generally know or find out how much the agreed sale price is before they produce their report for the lender. If the house is a regular sort of a property with nothing particularly unusual about it they would have compared it to sales of similar properties within the last few months.

If you're convinced its worth what you think it is, you could pay for a second valuation and perhaps provide some objective evidence/analysis yourself about why you think its worth the amount agreed.

Good Luck!

KierzUK

Thanks to all.

Have thought about it last night a little more.

Going to wait for the NWB mortgage underwriter team to get back to me which will likely be with their reduced mortgage offer of £123,500 against the surveyors valuation of £130,000.

Once I hear from them i'll contact the Estate Agent in writing informing them that I unfortunately am submitting a reduced offer of £130,000 based on valuation conducted.

I am toying with the idea of giving the vendor the option to pay for another valuation - i'm not willing to pay for it after paying for the initial valuation. Do people think this is a good idea? Or should I simply not bother and stick with the valuation provided already.

Having put my mind to it, i'm in no immediate rush to move out (living w/ parents at present) and should probably play hardball a little more. I also do not have the financial capability to meet the shortfall if the seller doesn't budge on price [and need to think about the longer term also when it comes to selling the property probably in around 5 years time]

If it does come to losing the property, it would simply mean me staying with the 'rents a little longer which isn't perfect but it gives even more time to save for a deposit and the chance of something even nicer coming on the market!

jules888

When we bought our house,we"d put an offer in of £175,000.Surveyors valuation was £165,000.We told vendors this and they reluctantly accepted £165,000.But i think they were fed up and desperate to sell.We were cash buyers as well,no mortgage.

allthingsmustpass

If only you could spend more than it is actually worth, how annoying for you?

Bizarre.

KierzUK

allthingsmustpass wrote: »

If only you could spend more than it is actually worth, how annoying for you?

Bizarre.

:money: The annoyance is more around time invested and potentially not ending up with somewhere that I quite liked. I understand valuations are there for the protection of the lender and to an extent the buyer but thanks for your really useful post. :money:

Anyhow.. just heard from the underwriters and as expected they came back saying the max they would lend is 95% of £130k.

I'll make the revised offer this afternoon. Can't see it going anywhere, but fingers crossed.

Strangely one of the notes on the valuation report related to the conservatory and whether all building regs/planning had been met/done correctly, as they said "the doors had been removed from the main building".

On my viewing we had to spend 5 minutes trying to find the keys for the actual doors that are actually there!! :undecided

ACG

I have never had a valuation appeal overturned.

If they had received a cash offer, then it would be exempt from a valuation anyway. The only way that would be carried out is if the cash buyers wanted it - it would be their choice.

As you are looking at the HTB any negotiation on the price is pretty much going to have to be £130k take it or leave it. If theyre not prepared to take it then there is very little you can do.

You obviously can appeal it, in which case you would need to get 3 similar properties in a near by area and get their SOLD prices (not marketed price).