House we're buying has been downvalued, please could anyone advise?

osz

My wife and I are buying a new home, we've sold our existing place to someone renting and are buying an empty house that the owners have renovated for profit so not much of a chain.

We agreed to buy the house at £318k but it has been downvalued to £305k by the banks valuation and to £310k by our surveyor.

The owners won't reduce their price even though everyone in the process has advised them that their original asking price of £325k was too high and our LTV is aready too high to push further.

Does anyone have any advice they could offer other than walk away? We do like the house and don't want to lose our sale but cannot afford to pay £13k over the valuation, especially as we'd need to remortgage to extend in the future.

Thanks.

FBaby

Three ways about it. Call their bluff and say you'll pull out if they don't agree to a reduction, or negotiate a half way figure, or indeed just accept that this house is not for you and start looking elsewhere and accept your loss.

osz

Thanks FBaby, we thought that may be the case, we're not out to play games and don't want to be dishonest but can't really pay the price they want now we know the house is valued less.

We've already lost out on 4 other houses over the past 12 months so when we found this one we were happy.

The sad part is that the vendors bought the house 6 months ago for £250k and did some work but not enough to justify a £75k rise in cost. They only did about £15k renovations.

We have already offered a half way figuee but they say they won't flex on costs

will it not be he case that this will happen with anyone who buys with a mortgage? And I would guess a cash buyer would offer £300k or less?

Crashy_Time

osz wrote: »

Thanks FBaby, we thought that may be the case, we're not out to play games and don't want to be dishonest but can't really pay the price they want now we know the house is valued less.

We've already lost out on 4 other houses over the past 12 months so when we found this one we were happy.

The sad part is that the vendors bought the house 6 months ago for £250k and did some work but not enough to justify a £75k rise in cost. They only did about £15k renovations.

We have already offered a half way figuee but they say they won't flex on costs

Can`t believe you would even entertain dealing with people like this, walk away and let them take their losses.

Crashy_Time

You could always go back next year and offer 200k......:money:

kinger101

osz wrote: »

will it not be he case that this will happen with anyone who buys with a mortgage? And I would guess a cash buyer would offer £300k or less?

Most likely less. And their agent has probably told them so.

The thing is the next valuation might not occur for another 3-6 months, in which time the property might have increased in value by then. If this happens, they'll tell themselves they'd price it correctly all along. The reality is their next purchase would have likely increased in value at a similar rate.

osz

Thanks all, I suppose I'm holding out for someone to say what I want to hear but know the truth is we've probably lost this one too.

The vendors won't get the price they want if the valuations are always going to come in low. With two independent professionals both coming in quite a bit lower than £325 it's scary. We thought £318 was ok but wouldn't pay this now knowing that if we remortgaged or had to move we'd be making a big loss. I'm sure that pushing the LTV to the max would also mean we'd have to pay back around £20k extra in the long term

osz

Thanks kinger101, they aren't moving house. It's one they bought to renovate and sell on, the house is empty and has been on the market for 6 months.

It also started at £375k which would have been a £125k profit for the vendors in 6 months but was never going to happen. Especially when the average sale price in the area is £300-£310k

Crashy_Time

osz wrote: »

Thanks kinger101, they aren't moving house. It's one they bought to renovate and sell on, the house is empty and has been on the market for 6 months.

It also started at £375k which would have been a £125k profit for the vendors in 6 months but was never going to happen. Especially when the average sale price in the area is £300-£310k

Laughable, please let us know how they get on with selling it!

csgohan4

the vendors will get what they deserve, Go elsewhere, they don't deserve you.


Let the EA know the reduced offer stands and other buyers needing mortgages will encounter the same problem. Look for other properties with the Same EA as intent too

osz

Thanks CSGohan4, their agents are fighting for us too, theyve told them that they face a repeat situation with anyone buying via mortgage.

Guess that's it then, 5th time we've got this far!!!