Mortgage valuation 5% lower than agreed sold price

Phirefly

Our buyers bank is unwilling to lend on the agreed sale price (145K) due to mortgage valuation survey which has just come back citing lack of comparable sold prices. They are willing to lend 7K below the sale price and our buyer has suggested a renegotiated sum of 140K.

The most recent sale on our street was 2011, I don't believe this is relevant to our sale being so long ago. It's difficult to compare neighbouring streets as ours is a small, modern, private waterside complex, while all the nearby streets are Victorian 2 up 2 down on-street terraces.

I'm pretty gutted that we're in this situation based on the opinion of one individual who does not know the area (the survey company is based over 50 miles away in another county). We had eight (6 local and two national hybrid online) EA valuations on our house which all valued it at 145 bar two who said we should market at 150 with a view to achieving 147-148.

Anyone been in similar circumstances before? WWYD?

motherofstudents

Yes this happened to me a few years ago. We did try to query it and the estate agent sent a list of comparables to the surveyor but he would not be swayed. In your case there are no comparables so I think you might struggle. EAs only come up with asking prices whereas surveyors do valuations. At least they are not asking for the full £7k off.

Crashy_Time

I would grab it, 7k off or no, you might get offered less next time?

Phirefly

Yeah, thanks, this is pretty much what we're thinking. Its good to hear what happened in a similar situation, MotherofStudents. Time's massively of the essence with this sale and while the 5K would have been nice, we never had it in the first place so it was never really ours to lose.

BJV

We bought a property in August ( commercial ) and the our of town valuer but the value at £15 below. We where very lucky our bank RBS have there branch in the same area and agreed to stand on the price we had negotiated. Our bank manager was fab ( unusual for a bank but he was ).

I think you have to see what they want to offer? They will not want to lose the property but ? Also you have to think about the property you want to buy? Do you have time to re market? Will the people you are buying from wait? Are they in a chain?

If it was me I would find out the price , try and up them a little. Perhaps meet in the middle ? and think about what you want? So sorry but without knowing all the facts and figures onward property chain etc it would be difficult to give any real opinion.

For what it is worth so sorry moving is so stressful I am sure that this is the last thing you need right now.

Ithaca

We had this last year. Had an asking price offer for £235k (which was in the middle of estate agent valuations, and in line with what other houses on the street were on for... one agent went as high as £245k). The mortgage survey said it was worth £230k based on a lack of recent sales nearby. Our buyers were already fully maxed-out on their deposit and we were desperate to move (third child on the way and only a small 2-bed house).

Options are:
1) ask your buyers to cover the difference from an increased deposit (wasn't an option for our buyers in the short term);
2) ask your buyers to apply via a different mortgage company and hope for a better valuation (although many of the big firms use the same local surveyors so you may end up in the same position);
3) put the house back on the market and hope for a buyer with a better deposit (risk that you'll end up in the same position and you may lose an onward purchase);
4) suck it up, buttercup... revise the asking price and accept the hit.

In the end we went for Option 4... we were moving into our "forever" home so we figured that a £4k-£5k hit would be painful but in 30 years time we'd be glad we made the decision. I think we asked the buyers to come up a bit and we settled at £231k as a sale price.

Ultimately it meant we could push through the purchase of our long-term family home within 12 weeks so although I sometimes think we could have pushed our buyers to find more cash I wouldn't have wanted to lose out on the house we are now in.