FTB: lower valuation

mickybar

Hi all,
I am a First Time Buyer and I agreed to buy a property at £360.000 (the property was on the market at £369.950).

Now, the mortgage valuation came at £330.000, and this is a massive reduction, considering that it's more than 8% on the agreed price, and considering that my first offer has been £350.000 and it has been refused.

This means that, if I want to proceed, I need to take an higher LTV product, and of course I don't want to do that. My broker tried to see if the valuation could have been challenged, but the lender refused.

I can try to re-negotiate the price, but I doubt the seller will accept that amount. Nonetheless, if all the lenders come up with the same valuation, he will never be able to sell at that price.

What to do now? Try to renegotiate? Ask to another lender? I know that someone will say "If he doesn't accept, search for something else", and he will be probably right I like the property though and I need a strategy.

Thanks!

Squiggles2312

mickybar wrote: »

Hi all,
I am a First Time Buyer and I agreed to buy a property at £360.000 (the property was on the market at £369.950).

Now, the mortgage valuation came at £330.000, and this is a massive reduction, considering that it's more than 8% on the agreed price, and considering that my first offer has been £350.000 and it has been refused.

This means that, if I want to proceed, I need to take an higher LTV product, and of course I don't want to do that. My broker tried to see if the valuation could have been challenged, but the lender refused.

I can try to re-negotiate the price, but I doubt the seller will accept that amount. Nonetheless, if all the lenders come up with the same valuation, he will never be able to sell at that price.

What to do now? Try to renegotiate? Ask to another lender? I know that someone will say "If he doesn't accept, search for something else", and he will be probably right I like the property though and I need a strategy.

Thanks!

Hi,


We had the same problem although ours wasn't as bad as 30k!
We decided to beg borrow and steal the extra money because we wanted the house so badly :-) only you will know what to do.

Good luck deciding :-)

Malmo

The options are essentially to:
1) Accept the valuation and attempt to re-negotiate the purchase price
2) Accept the valuation and make up the shortfall yourself
3) Request the lender to ask the valuer to review the valuation
4) Approach another lender that uses a different valuer

How does this property stack up in terms of general condition and current asking / recent sold prices with other comparable ones in the same post code and neighbourhood?

mickybar

Malmo wrote: »

The options are essentially to:
1) Accept the valuation and attempt to re-negotiate the purchase price
2) Accept the valuation and make up the shortfall yourself
3) Request the lender to ask the valuer to review the valuation
4) Approach another lender that uses a different valuer

How does this property stack up in terms of general condition and current asking / recent sold prices with other comparable ones in the same post code and neighbourhood?

They already refused a challenge of the valuation, so point 3 is not applicable. I can't afford the solution at point 2, either, don't have £30000 cash on top of the deposit.

Almost 9% of difference is a lot and, although I like the property and I was looking forward to move in, I think it's insane to pay £30000 more than it's worth. And how could I rely on a new valuation stating that the price of 360 is correct? I am really discouraged

The flat is recent (13 yo) and it's in good condition. It's in central London, and it has 2 bedrooms. Unfortunately, and that's probably the issue, in the same postcode there are no recent sales. The most recent one is Aug 2014, and it's for a 1-bedroom so it can't be properly compared.

At the moment I wrote to the estate agent making him aware of the situation. I pointed out that if the seller really wants to sell, he will probably face the same problem with other potential buyers.