Valuation came in LOWER than selling price - ADVICE PLEASE!

evo21

Hi there!

The ONLY bank that has confirmed that they will lend on a property, has valued it at £20,000 LESS than the offer/selling price.

We have been financially approved every time - but the property keeps failing valuations. We have been informed by our mortgage broker that others buying in the building are having the SAME problem.

What is the best way to get the seller to knock the price down? I need help to formulate a convincing argument for them to do so - I'm not ready to let go yet!!

AnotherJoe

evo21 wrote: »

Hi there!

The ONLY bank that has confirmed that they will lend on a property, has valued it at £20,000 LESS than the offer/selling price.

We have been financially approved every time - but the property keeps failing valuations. We have been informed by our mortgage broker that others buying in the building are having the SAME problem.

What is the best way to get the seller to knock the price down? I need help to formulate a convincing argument for them to do so - I'm not ready to let go yet!!

No one knows what the "best way to get the seller to knock the price down" is since no one knows the seller and whats driving their decisions. They may not be conducive at all and may simply wait until a valuation rises and meets their bottom line.

All you can do is say that as a result of the valuation being £20k below the asking price, the most you can afford given your need to obtain a mortgage, is £X, and that is your last and final offer. (to you might dance around a bit, initially come up with a figure a little below that and let them raise you to your top limit. )

There's no guarantee you'll meet in the middle or at any point though.

Thrugelmir

evo21 wrote: »

What is the best way to get the seller to knock the price down? I need help to formulate a convincing argument for them to do so - I'm not ready to let go yet!!

Doubt a seller is going to let go of £20k unless they really have to. What's the vendors position?

System

Over the years, we have purchased a number of properties and it has often been the case that the valuation has been below the sale price. Why - because most lenders have a policy that requires a valuation based on a quick sale in the event of foreclosure? You can see the logic of this given that lenders need to assess the realistic value of capital assets on their balance sheets, and manage risk.

The sale price is nothing more than a negotiation between the buyer and the seller.