Paying over valuation price

mr_grubby

Hi,

I was wondering if I can get an idea about this little situation, I have done some searching and found similar posts but nothing exact. A house I was interested in came on the market in December for 150k, I put in an offer for 145k which was accepted. Prior to this I had an AIP saying that a mortgage would be available for that figure.

I applied for a mortgage on the property and the valuation was duly paid for, the valuation done by Colleys came back at 134k which was a fair difference between the offer price let alone the asking price. I thought that 145k was probably 1/2k above the right price but I was prepared to pay that for the sake of it being a nearly new house, no work needing to be done etc. I appealed the valuation and got nowhere as there are no comparable properties in the area sold within the last six months, there are virtually no comparable properties at all in the area.

I go back to the EA with 134k and come up with some resistance and an eventual refusal of the offer so I cancelled the solicitor and mortgage application, already I have lost 600 quid regardless.

Now the house has been dropped on Rightmove by 5k and I know the sellers are very eager to get out (separation) and I am contemplating putting another offer in.

If there is an xk difference over (say I offered 137/138k) I know the mortgage company will only lend 134k but will they let me do this if I pay cash or will they not care as long as the balance is settled and in that case the balance is payable to the solicitor? The way I work it that if they sell it and get 134k then they have not lost out (I have). Do I then just tell the solicitor the missing balance will be coming from cash (I have the difference saved), how would I approach the mortgage company?

I have seen similar threads but none where people have actually done this and what they needed to do.

I know people will say don't pay more than valuation etc etc but I do think the valuation was a little on the low side, I have been looking at similar houses in the neighboring areas that are 15+ years older and they need 10k of work doing to them at least before they are livable and then they are on the market for around 133k, figuring a 5k lower asking price that still ends up balancing out.

Thanks for any help...

TheCyclingProgrammer

If the valuation is lower, I believe you have two choices:

1. Maintain the LTV and take the reduced loan. Make up the shortfall in cash.

2. Borrow the same amount at the expense of a higher LTV. Whether or not you can do this really depends on how close you are to the LTV threshokd for your mortgage product.

Only you can decide if it's worth paying over the valuation price. If you think the valuation is wrong, go for it.

Best in mind that you pulled out once before - the vendors might not even entertain an offer from you on that basis in case you pull out again. They might even suspect a gazundering.