Under valuation panic

Dird

So I have a lot of free time which makes me have an over-active imagination (like my happy ever after with the pretty cashier at YBS or the pretty account advisor at Lloyds).

My mortgage process seems to be going well (moving quickly despite electoral roll issues) but with the valuation coming up (maybe this week) I've been thinking...
Accepted offer: £124,950
Deposit: £45,000
LTV: 63-64%

1) If the valuer comes back and says it's worth £120k, will they only offer me one at that rate or do they allow wiggle room and might still give me a mortgage at £125k? If I'd have to meet the extra £5k from my deposit I'd lose the 65% LTV rate
2) Do people normally contact the estate agents themselves to explain the valuation/ask if vendor will accept the new valuation? Or do they get the solicitor to ask the estate agents/vendor's solicitor on their behalf?

Contemptuous

1. The lender bases LTV on the lowest of either the purchase price or the valuation, so if the property is valued at £120k then it doesn't matter if you want to pay more for it, they will base lending on £120k.

2. I don't understand the question. The vendor can't do anything about the valuation? Do you mean to revise your offer on the property to come in line with the valuation figure?

Thrugelmir

If the property is valued at a lower level. Then it's a time for negotiation.

Dird

Contemptuous wrote: »

Do you mean to revise your offer on the property to come in line with the valuation figure?

Yes. What is the typical approach in this situation if you're "Sold STC"? Direct to estate agents or via your solicitor?

sam2015_2

I'd ask the solicitor to negotiate with the estate agent.

Contemptuous

Whereas I would speak to the estate agent directly. I guess it's personal preference.

amnblog

You have far too much time on your hands - the valuation is not even done yet - get a hobby.

Dird

amnblog wrote: »

You have far too much time on your hands - the valuation is not even done yet - get a hobby.

paranoia is a hobby :P also the mortgage company may ask what I plan to do next then there'd be no time for a MSE thread

I guess I'll see if the solicitor is willing to do it. The problem I have is if the estate agents apply a little pressure then I'll panic and just stick at asking price. Same happened when I bought my car =/

PixelPound

Dird wrote: »

paranoia is a hobby :P also the mortgage company may ask what I plan to do next then there'd be no time for a MSE thread

I guess I'll see if the solicitor is willing to do it. The problem I have is if the estate agents apply a little pressure then I'll panic and just stick at asking price. Same happened when I bought my car =/

You do know they have official reps on these forums. They could look at your posting history and compare it to their mortgage applicants to work out who you are :eek:

Or is it not that kind of paranoia :rotfl:

Dird

If you mean the banks then I complemented the speed of process so I doubt they'd mind :P
If you mean estate agents then there must be lots of houses at that value & it won't be their first rodeo...if valuation comes £10k under the price is dropping for sure :P

PixelPound

If the £45,000 is purely deposit, then with a valuation of £120K you could have 65% LTV so long as the sale price is under £123K.

The tactic would be to state the valuation price and say because of that you need to revise your offer down and ask if the vendor will accept £120K. Don't go into more detail, just wait for a reply. When the EA comes back and says no (if they have indeed asked the vendor), its then a case of seeing if they'll make any compromise.

Not sure how the solicitors would do it, would it be a solicitor to solicitor thing, and bypass the EA? There would be a charge for their time to factor in, but if it was bypassing the EA, then a straight offer to split the difference between offer and valuation may work.