Undervalued and seller won't negotiate

1234zoe1234

Hi,
We offered 140,000 and it came back valued at 130,000 because no properties in the area have sold for that price. No properties have really sold in the last 5 years in that street/local area so nothing recent to compare to.
We made the seller a new offer but they won't budge on price at all. Our broker has said we could put a 5% deposit and top it up or walk away.
The seller's reasons are because they had a cash buyer but chose us over them.
Is it usual for a seller to do this? We thought they would negotiate a bit, maybe not all but a little.
What are your thoughts?

mrginge

Sounds like pay up or move on.

Move on imo.

shortcrust

If someone else will pay 140 they don’t have much reason to negotiate a lower price with you.

My friends recently sold their house and it was undervalued for the mortgage. They’d had loads of interest so wouldn’t budge on the price. Their buyer stumped up the extra.

G_M

If the seller won't negotiate, then you either pay up or move on.


Their reaons are immaterial. Could be


* they are in no hurry
* they believe your valuation is not a true reflection of the value
* they have had interest from other buyers
* they don't believe in re-negotiating price on principle
or whatever!

ACG

The valuation is based on the surveyors opinion.
You could try another lender and a different surveyor.

At the back end of last year we had 2 down valuations, one of them the price was negotiated and everyone happy. The other we applied to another lender and the valuation came back higher.

If there were 2 offers on the table for £140k, it is probably worth £140k. I can see the vendors point. I am surprised your broker never suggested an alternative lender.

kinger101

I'd go with the cash buyer too. It was probably a close call whether they went with you or them in the first place. Some vendors lean towards those seeking a residential mortgage either because

(a) they don't want it to be let (as they believe owners better for their current neighbours), or
(b) think a cash buyer more prone to attempting a gazunder or down-valuation.

If the EA was on the ball, they might have asked you about where your red-lines were on undervaluation before the offer was accepted.

Thrugelmir

1234zoe1234 wrote: »

No properties have really sold in the last 5 years in that street/local area so nothing recent to compare to.

There'll be sales in the vinicity. That'll give the valuer an indication as to the state of the wider market.

cybervic

perhaps post a link of your property?

You can try to search the properties sold at £140K in the last 12 month.

ReadingTim

Put yourself in the vendor's position - why give someone a discount when there's someone else willing to pay full price?

Hardly a massive intellectual challenge is it?!?

westernpromise

ReadingTim wrote: »

Put yourself in the vendor's position - why give someone a discount when there's someone else willing to pay full price?

Hardly a massive intellectual challenge is it?!?

This depends on whether there really is someone else willing to pay full whack. If there is, it further matters whether that person is a cash buyer or buying with a mortgage. If this alternative buyer needs a mortgage, then given the narrow range of surveyors lenders use, there is every chance that their survey will produce the same result.

If there is a cash buyer at full price why was the vendor proceeding with one in need of a loan? Saying there's a cash buyer champing at the bit is a very old trick.

nicmyles

From their point of view, you made an offer. They accepted it. You are now trying to renegotiate it. The reason why isn't really relevant, except insofar as they're probably not annoyed with you as it's outside of your control (whereas if you were just changing your mind, they'd have a right to be).

They're under no obligation to agree a lower price, especially if they have a cash offer at the higher amount.

But it is possible to get to a resolution on these things. My first flat was down-valued by £20k. We revised our offer accordingly. The vendor declined it.

But...the flat had been on the market a while, they didn't have other interest, and they had another property lined up. So in the end I managed to scrape enough together to raise my offer by £5k and they accepted that.

The "valuation" thing is a bit of a red herring, really. The lender isn't saying that it is only worth that. It's saying that is all they will lend you. The market 'value' of it is the amount you're willing to pay and the vendor is willing to accept. Which in this case is still £140k.