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

Mickygg

How much money the vendors stand to make is irrelevant. They bought it for £250k, which they may have got at auction, bought from someone desperate to sell, got it cheaper for cash and no chain etc etc.
They think they can get close to their asking, which of course they can as you are prepared to pay that. If you are then other people possibly will pay it as well.
Another mortgage survey may value higher than yours.

They are all unknowns. If they won't budge on price and you can't afford it now, then your only option is to find a place you can afford.

AdrianC

glasgowdan wrote: »

So, Adrian, you think the OP is wrong for changing their perception of the value following new information becoming available? or are you just playing devil's advocate?

My comments were made purely in relation to the text I quoted.

KRB2725

If another potential purchaser is using a different mortgage provider then they may well receive a different valuation.

A house is worth what someone is willing to pay for it. It was worth £318k to you until someone offered a different opinion meaning you can't afford it. Someone else could offer the same and able to meet the shortfall if they found themselves in the same situation. I would pay a little over the odds if I really wanted a house and was going to be in it long term.

Equally, the home may sit on the market and they then accept they will need to reduce their expectations. You just don't know.

Don't drive yourself nuts with what others may/may not offer. You can't make them accept a revised offer and they can't make you pay more. Walk away.

osz

Thank you to everyone who has replied, it's been useful and apologies if this thread has caused a few heated battles, it wasn't my intention.

There's a lot of people saying that it's what it's worth to a buyer, well the offer of £318 was a reduction to the £325 the vendor wanted. Then the survey went ahead and the house needs a few repairs that are marked red, we knew this would happen and anticipated a price drop anyway.

The real spanner in the works was the valuation and survey coming back lower. The houses in the area are all different and therefore not that comparable, we have £250k-£3M in the same 1/4 mile. The overall condition is quite nice, it's been renovated quite basic as expected but a blank canvas. Cheap boiler, carpets, kitchen and simple turf garden.

The valuation from the bank was done by a man who also valued ours, on the same day. It's not certain but quite likely that one company is hired to value in the area as he said this was the case most of the time. I'm sure that means anyone else will get the same valuation by the same company.

It may be the case that someone else goes to buy with more money than we have but that doesn't mean they'll be stupid and will also have solicitors and brokers telling them what we're being told, the price revealed by the survey has changed the game. it is both sensible and reasonable to now ask for a reduction, the vendor has to decide whether they want to face the issue now or put it off for a while and probably face it again down the line.

osz

@Emma, i can't help but feel stressed about it all but it has been taken off the market so there won't be other offers.

The EA has told us the offers in the past were all lower than ours anyway and the people were in big chains

Thrugelmir

osz wrote: »

Has anyone here ever made a cash offer? If so are they usually made much lower than asking price? I'm trying to rule a cash buyer out of the equasion as I've a gut feeling no one in their right mind would offer £318k in cash on a house valued £305k.

If someone really wants the property then they'll pay the price. Simply as that.

If the sellers want out. They'll revise their expectations downwards. In no hurry could just sit it out and wait ( and wait and wait).

Cakeguts

It sounds to me as if you are looking at houses that are just too much on the top of your limit? If you take this house as a learning opportunity. If you were someone who could afford to spend £350k on a house the difference between £325 and £318 wouldn't bother you. If you really wanted that house you could still buy it. You are going to need a bit of cash between the top of your budget and the limit so that you can make up the difference if you need to.

I see a problem with this house and your plans to extend. There is an upper limit on what you can sell any house in any road for. This house is difficult to sell now. So you may find that once you have extended it you cannot get your money back when you sell it. It is possible that you will make a much bigger loss than the one you anticipate. The people who bought it and renovated it obviously thought they could get more for it than they can and you are thinking that you can get more for it probably than you can after an extension. This makes me think that there is something about this property that devalues it. I would guess that there is something about the location that you haven't noticed or there is something in the history of the house that you don't know about or there is something about that road that you don't know about.

osz

Cakeguts wrote: »

It sounds to me as if you are looking at houses that are just too much on the top of your limit? If you take this house as a learning opportunity. If you were someone who could afford to spend £350k on a house the difference between £325 and £318 wouldn't bother you. If you really wanted that house you could still buy it. You are going to need a bit of cash between the top of your budget and the limit so that you can make up the difference if you need to.

I see a problem with this house and your plans to extend. There is an upper limit on what you can sell any house in any road for. This house is difficult to sell now. So you may find that once you have extended it you cannot get your money back when you sell it. It is possible that you will make a much bigger loss than the one you anticipate. The people who bought it and renovated it obviously thought they could get more for it than they can and you are thinking that you can get more for it probably than you can after an extension. This makes me think that there is something about this property that devalues it. I would guess that there is something about the location that you haven't noticed or there is something in the history of the house that you don't know about or there is something about that road that you don't know about.

Thanks for your reply, I've always been told to aim for the most you can comfortably afford and to buy the worst house in the best area, this house does both of these.

It's not one that I'd want to move from as I'm buying to send my children to school in this area. The house after the extension will comfortable enough to support our way of life which isn't over exuberant.

If the vendors help us out a little, we'd meet halfway which is quite reasonable given the time it's been on the market, lower offers it's already had and downvaluation.

jimmy_cricket

Not sure if this helps, but I had a very similar experience years ago. Probate sale, price agreed, survey done, down valued. 5k on a 75k house, so not insignificant. We proposed to meet halfway but the snotty daughter started waffling about an agreement is an agreement. Well no, it was subject to survey.
Anyhow we walked and bought another property. The original house sat on the market for months and eventually sold for significantly less that what we offered.

Marvel1

osz wrote: »

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

Based on that above, greed springs to mind and would walk away.