Valuation at 5k less

reckless_ladybird

Hi!

We have been actively looking to buy for over a year. By the time we saw this property, which was further out from the area where we initially wanted, we were a bit desperate. We put an offer for 4k under asking price, which was accepted.The mortgage application went through. The valuation came back at 5k less than what we offered (305,000).

We are completely stretching ourselves for this property, and the valuation obviously means we have to pay the difference on top of our deposit.

For one thing, we don't have it. (Unless, if possible, we put all the buying expenses incl stamp duty tax on credit cards...?)

We have already spent around £800 and giving up on the property will probably mean us losing this money.
Not sure what to do at all. Is it common for banks to undervalue? (Halifax, in our case)

Thanks for reading

Typhoon2000

Valuation by the surveyor is for the purposes of mortgage lending. The value of the property to you may be a lot higher and a lot lower to someone else.
You can approach the the seller with the valuation and see if they will reduce the price by £5k.

ThePants999

I saw from another thread that you have a 20% deposit. Is there any chance that you can switch to an 85% LTV product instead of an 80% one?

reckless_ladybird

Thank you, I understand that. But it does worry us that we are paying more than it's worth as we are buying in a new area.. Also, I feel before going to the vendor with a lower offer I have to accept that we may lose the property.

reckless_ladybird

ThePants999 wrote: »

I saw from another thread that you have a 20% deposit. Is there any chance that you can switch to an 85% LTV product instead of an 80% one?

That's correct. I didn't know we can switch (FTB) the ltv - I haven't spoken to the MA yet. He only left me a message yesterday evening (only to cause a sleepless night! hehe). I will speak to him and see if we can do that. My hubby is self-employed and we don't have high salaries, so the only thing going for us is the deposit.

Typhoon2000

reckless_ladybird wrote: »

Thank you, I understand that. But it does worry us that we are paying more than it's worth as we are buying in a new area.. Also, I feel before going to the vendor with a lower offer I have to accept that we may lose the property.

I think you have nailed it. If you feel that the house is priced more than it's worth to you, offer what you Are happy with but be prepared to look elsewhere if your new offer isn't accepted.

skimper

We were in the same boat, our halifax valuation came back £5k below. We went back to the vendor and they agreed the valuation price. Its worth asking for. If you pull out, there s a good chance everyone else who wants to buy it will be in the same boat.

CrippsCorner

Look at my thread I started earlier this week...

I bargained a new deal and ours was valued £10,500 under! I'm still paying £2,500 over the valuation, however because the deposit has been reduced in line with the property value, we are actually only paying £925. Hopefully that makes sense!

If not I'll try and explain it better lol, took me a while to get my head round it.