Made an offer - worried about low valuation

northern_at_heart

I've just had an offer accepted on a house. We offered the asking price of £370K (we were the first to view and offered the same day) as the market is just mad here (SE commuter hotspot) and we've missed out on several other houses by being too slow (as in 2-3 days) or offering under the asking price. This house is perfect for us in every way, and compared to others we've seen, we're happy to pay this amount. We actually prefer it to one we looked at at £435K.

The vendors bought it for £272K in 2010. Not many similar houses on the same road have sold in the last couple of years: one for 305K but most for £280-300K. Another EA told us they valued the house in question for £350K, which is probably why the vendor went with the higher valuation.

I'm now worried that the lender's valuation will come up lower than our offer. Prices are rising fast here, but it's more the fact that 4-bed modern houses here are in short supply and I'm certain that if we don't pay the asking price someone else will. (Obviously unless they're a cash buyer they might well have the same problem). This is at the top of our budget though so we don't have much slack to absorb the difference if the vendor won't budge.

Just wondering what the best tactic is with the lender (YBS)? We were going to get a Homebuyer's Report but obviously if the valuation part comes back low and the vendor won't negotiate, then we'll lose our fee. Can we order a valuation now and upgrade to a HBR at a later stage?

Any other advice?

kingstreet

If you have the lender's surveyor do only the mortgage report & valuation, your later option will be an independent homebuyer's report by a surveyor of your choice.

The total cost may be higher as a result.

Your call on most sensible approach.

northern_at_heart

Thanks Kingstreet. So we can opt for the basic valuation through YBS now and then if it comes back OK, or we come to an agreement, we can later commission an independent HBR without involving the lender, just to satisfy our own peace of mind about the state of the property?

kingstreet

That's right.

Wolfsbane2k

kingstreet wrote: »

If you have the lender's surveyor do only the mortgage report & valuation, your later option will be an independent homebuyer's report by a surveyor of your choice.

The total cost may be higher as a result.

Your call on most sensible approach.

I'd second this - I wanted a full building survey done on a property we were looking at, but the broker didn't tell the Coventry BS that we wanted that, so got a "Free" valuation done instead, which has picked up an issue straight away that may yet mean we walk away from the property.

So although i was really annoyed having found out i couldn't get the £200 off a home buyers report through the BS, and instead would have spent another 300 to top it up to a full Homer Buyers, I've potentially saved £300 ....

Then i get the choice of a fully independant surveyor in for the last niggles if our big problem goes away, at ~ £500.

pjcox2005

I don't live in SE so don't know the market.

But you've offered £20k more than estate agent was going to list it as (not value it), £50k more than any other house sale on the street, and £100k more than they paid 3 years ago (a 37% increase).

Surley you want a correct valuation as if it is substantially lower then you can either reevaluate or use it to negotiate the price down pointing out that others will have the same issue (and may pull out when they see the valuation).

northern_at_heart

Yes, when you put it like that it does seem a silly amount. Deep down I know it's too much compared to other sales on the street.

But we really love the house and it's in our budget - in fact we've looked at lots around the £370K mark (and higher) (we've been looking for 5 months since we sold) and this is by far our favourite. I would be gutted to lose it, but I suppose the valuer would be doing us a favour really.

It would be great if we could negotiate the price down but I can imagine the vendors are completely carried away now and believe the estate agent's asking price is what it's worth. Gahhhhhhh.

PheoUK

Think of it as the valuer is stopping you making an expensive mistake, or giving you a way of getting a lower price on a house you like.

No point in paying over the odds, even if it is good.

jimbog

Whoever buys it will have to have a valuation done with a BS so the vendor will come across this with someone else too - unless a cash buyer

tigsly

Houses in the house are being sold at EA value - or higher - and the valluations are coming back at that rate..

So you might not have paid too much - the vendors may have bought it cheap and added value (although your post doesn't suggest this to be honest)

If the valuation says its worth less you will have something to negotiate with..

Larsson67

pjcox2005 wrote: »

I don't live in SE so don't know the market.

But you've offered £20k more than estate agent was going to list it as (not value it), £50k more than any other house sale on the street, and £100k more than they paid 3 years ago (a 37% increase).

Surley you want a correct valuation as if it is substantially lower then you can either reevaluate or use it to negotiate the price down pointing out that others will have the same issue (and may pull out when they see the valuation).

We're selling a property in the SE and had a similar %age increase ( in 4 years) and the mortgage valuation valued it up with no issues. Doesn't mean the OP's will of course but those kind of increases are plausible in the SE - even more in Londonium!

Market's a bit mental but there you go.