Survey has come back as less than what we've agreed to pay!

Justadmin88

Hi everyone,

A bit of a panic, I apologise. Quick rundown of our situation:

Agreed purchase price of property: £249,950
Deposit: £55,000
Loan requested: £194,950

We're FTBs, everything was going so smoothly (completion date even pencilled in for 13th March!) and then today we got our homebuyers report through following our survey completed on Friday, and they reckon that the house is actually worth £225,000 (nothing really "wrong" with the property, just their assessment of the market value). This has knocked us for six as I'm sure you can imagine. I called the bank (Natwest) and they haven't actually got round to assessing the valuation yet, the expect to have this done by Wednesday.

My question really is this: is there any way on God's green earth that Natwest might still offer us the full loan we've requested of £194,950? Or does the result of the survey mean that's just off the table now, no chance at all? To my mind, I thought that IF they had to repossess the house and sell it, and say it sold for £225,000, they'd still get their initial investment of £194,950 back and then some more on top. Or does it not work like that?

Thank you for any kind words, I'm trying to stay calm and remember that it's not all over just yet.

oli_ro

Another angle on this: Is it worth understanding why the surveyor arrived at this amount ?
Don't assume he's wrong, maybe you are overpaying.
Why don't you call him, they tend to be more direct/clear off the record.

Thrugelmir

The bank will base the mortgage offer on the surveyors valuation.

Ring the EA , tell him the valuation and say you've revised your offer.

ACG

On those figures I suspect they will still lend but you will need to pick a new product, which will have a higher interest rate.

Personally I would be using that to go back to the vendors to re-nogetiate the price down. Use it to your advantage, you dont want to be paying 20% more than the value is do you? Every pound saved is better in your pocket than theirs.

Justadmin88

Thanks for the advice all. I hear what you're all saying about renegotiating the price, my brain tells me that's the right thing to do but I also worry about scaring off/insulting the vendor which is stupid I know. Would you advise that we wait at least until Wednesday to hear the official decision from the bank or should I jump on it tomorrow with the Homebuyers Report as evidence enough for a lower price?

ACG

Try to renegotiate, all that will happen is they come back and say no. You then have a choice of sticking with the purchase price or backing out.

Think of it another way, if you struggle to get the price you want so may others. Lenders usually use a lot of the same surveyors so you may find that whoever has been out to see the property for you will see it for someone else regardless of which lender they use. That may not happen but it can.

Jonbvn

Justadmin88 wrote: »

Thanks for the advice all. I hear what you're all saying about renegotiating the price, my brain tells me that's the right thing to do but I also worry about scaring off/insulting the vendor

Please remember that this is a commercial transaction. You should never worry about offending the vendor/buyer in such a transaction.

amnblog

The vendor has insulted you by asking £249K when it is worth £225K.


Expect a much lower price or walk away.


Experience tells me that clients that need to find a second property option always get a better deal.

roddydogs

Dont surveyors always say its worth less, in order to "cover" themselves for any possible comeback later?

MacMickster

ACG wrote: »

Try to renegotiate, all that will happen is they come back and say no. You then have a choice of sticking with the purchase price or backing out.

If they say no then immediately arrange viewings on another couple of properties on the same agent's books (even if you have no real interest in them).

You currently have too much emotional buy-in to what is a transaction in respect of a pile of bricks and mortar. The seller is equally likely to start with an emotional reaction to your revised offer. It is up to you, and the EA to help him to move from the position of "I'm not going to accept that price for the home that I love" to "I'm not going to be able to sell to anyone for more than its market value"

amnblog

roddydogs wrote: »

Dont surveyors always say its worth less, in order to "cover" themselves for any possible comeback later?

They try to value to the best of their Professional opinion. The majority of properties meet valuation.