House undervalued

BaronVonDoon

Ok, so I'm in the middle of buying my first house, a mid terrace 2 bedroom for 75k (it's Wales, houses are cheap), mortgaged through HSBC, with a 90% LTV (actually 89%)

This morning I had a copy of the mortgage valuation report from Countrywide, which valued the house at 65k, a huge 13% less than the agreed price.

Obviously this has now created a huge problem, and with it being the weekend, I can't really do anything about it until Monday. So thought I would come here and ask advice on which direction to proceed.

While I have a few extra thousand available to me, it's nowhere near the amount needed to pay the asking price given my new lower mortgage offer. I'm inclined to think that I wouldn't want to pay it either, as it's massively paying over the odds. While I do have some wiggle room, I'm unsure how to approach it when I speak to the estate agent on Monday, I love the house and don't want to lose it. At the same time, I'm not willing to potentially throw myself straight into negative equity just to get it.

Should I go straight in and ask to lower to the 65k valuation? (if I was the vendor, I'd probably tell myself to do one)

While some people will probably tell me 'I thought it was worth 75 and a fair price etc etc' It's something that will hinder me when I come to remortgage or sell on. And something that will crop up with another buyer should I choose to pull out.

tigsly

Personally - i would pay only what the valuer had said, and use the 'i can't affor anymore - its what the mortgage company will lend me' line - followed by - anyone else who goes for a mortgage will be told the same thing..

Unless there are local things that have sold for the offer price, then I might 'meet in the middle'.... if you could afford to..

I guess tho it does depend on what other things have sold for in that area, I've always pondered about valuationa - as in how often they come back low - all the houses I've bought (3 now so not that many!) have been valued at offer price.

mrginge

BaronVonDoon wrote: »

Should I go straight in and ask to lower to the 65k valuation? (if I was the vendor, I'd probably tell myself to do one)

Yes of course you should.

BaronVonDoon

Thanks for the quick replies..

Well it's a tiny village, and only 1 house has sold there in the last 4 months, which was sold at 65k funnily enough. Only found this out today, and didn't think to check at the time of offer, as there's another similar house for sale at roughly the same price.

Should have my home buyers report turn up sometime in the week, so will see if that's thrown anything up to use as an extra bargaining chip.

My initial thought is to offer only what's been valued, I just worry it's such a big drop on a cheap house in the first place, they won't accept it. Everything was going so smoothly till today as well ,, sigh!

Loopy28

If the valuer said it is worth 10k less then it is likely that the seller might have the same problem with anyone else trying to get a mortgage, if they decide not to reduce what they will accept.

Unless of course the valuer has made an error of judgement, not sure where you stand on appealing this?

You can only really wait and see what the vendor says when the have this information. If I was the seller then I would probably have a serious think about it because I would be concerned that if I decided not to proceed then any other person buying the house might have the same problem at valuation.

I definitely wouldn't fund the 10k yourself, you will end up in negative equity.

Thrugelmir

BaronVonDoon wrote: »

My initial thought is to offer only what's been valued,

Don't offer anything. Tell the EA the valuation and let them talk to the vendor.

poppy10_2

Loopy28 wrote: »

Unless of course the valuer has made an error of judgement, not sure where you stand on appealing this?

Why would the buyer want to appeal this?

Halle71

poppy10 wrote: »

Why would the buyer want to appeal this?

To get their mortgage.

brit1234

Halle71 wrote: »

To get their mortgage.

That's really sensible lol

You have been handed a big bargaining tool to lower your price, personally I would take. If not you could repost on the moneywastingexpert.com :rotfl:or just burn your money

BaronVonDoon

Well looks like this has come to a dead end. Vendors said they can't take below 70k after they had spent a lot of cash on it already. I said I can't go over 65k as I would be over paying. And while I have the money, I'm not going to throw money at it needlessly. So unless they have a huge change of heart, that's the end of that.

Beckyy

If that's what it's worth then people aren't going to be paying over the odds. If they want to move then they will have to accept £65K - give them a bit of time to stir.