Excessive asking price?

monkeymagic11

I really need some advice -it may seem obvious but I have only ever bought one house and that was 10 years ago!

We have put an offer in on a really nice house (at the very top of our budget). Today I got the survey back that will go to the mortgage lender and it basically says that the asking price is excessive and can't be substantiated. We have offered the full asking price but their valuation is £20k less than this.

There is nothing wrong structurally and no repairs etc needed. Are surveys for mortgage valuations usually different to the market value/ asking price (I am being optimistic - I think I know the answer....:(

I thought the house was worth the full asking price and there is another buyer who has put in an offer for the full asking price. The vendor is going with us because they want a quick sale (they have a house in mind and need to put an offer in by 1 November).

I have looked at similar houses in the area and the price seems reasonable. My ideas are

a) call the surveyor and ask why the valuation is so much less than the asking price (although I would say that they will just say it is in comparison with other local properties?)

b) call the Estate agents and ask what their valuation was - although I don't exactly trust estate agents

c) get another independent surveyor (could be a waste of money if they then come back with the same quote)

d) Call the vendor to try and get the price reduced - although they are likely to go with the other buyer and I really like this house

e) wait for my homebuyer's survey - will this tell me anything different?

f) do nothing (my husband's preference!) as we think it's worth the asking price - I don't think this is realistic

This has really thrown me - this morning I had a call from the IFA who has arranged the mortgage deal for us saying that we could have the mortgage in place by tomorrow evening. I thought it was a done deal and was all excited about my new house until I got home and saw the survey

I'd really appreciate some advice - I know I'm probably being hopelessly naive - thank you!

gemma.zhang

I think this thing happens in your favor.. don't need to worry too much about it. I would go to the EA, and explain to them, the survey came back 20k less, and due to this reason (even if it's not), we can't get the mortgage we want to buy this house, and it's valuation by the bank, balb alb alb, and it will happen with anybody who's buying the house, and ask to re-negotiate the price of 20k less !!!

I do think it's your chance to get a bargin for it !!!. your vendor will consider seriously, and highy possible to drop the price, coz.. . it will happen to anybody who's buying the house, and needs the mortagage, even they go with the other buyer, it would have happened !!!, and they will HAVE TO drop the price in order to sell. .. don't think it's necessary for you to pay another survayor to do it AGAIN !!!...

CHIN UP, and negotiate the price again !!!.. should be happy , you can now got valid/sounding excuse to pay 20k less !!!

good luck, and let us know how it goes.

monkeymagic11

Thank you - that hadn't occurred to me ( I said I was naive!)

Will ring the estate agent in the morning and definitely let you know what happens!

Thanks for being so supportive - I'm off to bed now and will sleep more easily thanks to this post!

ManAtHome

Wouldn't get your hopes up tooo much for a reduction if there's another buyer offering the asking price (if they exist...).

Due to the well-publicised "credit crunch", valuations are getting more conservative - not really a problem unless this means you have to pay a higher rate for the mortgage.

EAs often "value" to get the business.
Banks often "value" in case of a panic sale (if you default, they want their cash back quickly).

Whether either of them are realistic... who knows?

IveSeenTheLight

In my experience (bought 4 properties) the surveyor has always been conservative to the actual market valuation.

You say that

I have looked at similar houses in the area and the price seems reasonable.

that

We have put an offer in on a really nice house

and that

as we think it's worth the asking price

I would recommend that if you think this is the house for your future then you should see through the offer to ensure you get the house.

If you can live without the house and are willing to risk losing to another bidder, then by all means try and haggle.

I've also seen surveyors amend the price to reflect the market value to aid with mortgage applications

General_Mayhem

Talk to your surveyor first! Find out why he has said what he has.

Its been said before, but it is very true: A house is only worth what someone is prepared to pay for it. If both you, and someone else think it is a fair price, then that's what its worth...

I doubt the vendor will drop the price based on this, but hey, its worth a try!

If your surveyor is a doom and gloom house price crash advocate, then I'd probably ignore it, if he can substatiate it with examples of similar property sales in the area then maybe think again. (I wait for a flaming to come)

nobblyned

Firstly - Talk to the surveyor.

Also - You also haven't said whether you need the valuation to be at full whack to get the mortgage that you want. If you don't and they can lend anyway due to a low LTV ratio, then it's up to you to decide what you think it is worth, not the mortgage company.

If you think it is worth it, pony up, if you don't and are prepared to take the risk, negotiate.

SquatNow

By the sounds of it the "other buyer" doesn't exist.

If they do, then they obviously arn't a cash buyer (else they would be the rpefered "quick sale" buyer) so they'll need to get a mortgage too... and of course there bank will say it's worth £20k less than the asking price.

Offer the seller £30k less than the asking price. If they really want a quick sale they'll accept the offer. If they are just dreamers seeing if they can sell their house for an astronomical amount they'll turn it down, in which case your lucky the sale fell through.

Plenty more houses out there. No shortage of sellers, just a shortage of buyers. the days of sales going to sealed bids are history.

monkeymagic11

Thank you all very much for your replies! I have been in touch with the surveyor - he is being quite negative, talking about house price crashes etc - and has compared the house with others in the area, but he is looking a bit further afield than I have and I think he is being overly conservative in his estimation.

However, he does genuinely seem to think the house is overpriced. Am still considering the next steps but will let you know what happens!

Austin_Allegro

monkeymagic11 wrote: »

he is being quite negative, talking about house price crashes etc

We'll have none of that sort of talk here, Wilson...;)

carolt

Exact same thing happened to a friend of mine within the last few weeks - as others have said, it's getting more common, with banks getting nervous now due to potential falls in house prices - they want to be covered.

She got a second valuation done, and in the meantime, explained the situation to the vendor and asked for a discount. She was really worried she was going to lose the sale as she loved the house, but after initially refusing to budge, the vendor DID reduce the price down to the level the survey had said it was worth, as he was worried he was going to lose his buyers....

The irony is, the second survey actually came back agreeing with the original asking price - but she's not going to tell the vendor that!

Good luck!