Buyers' mortgage company valuation 30% below asking price!

YorkshireJames

Hi

We put our house on the market for the average valuation from 3 estate agents. We've had two people make offers just below that and agreed with one. It was all going through well when...

They got a valuation from their mortgage company, which was 30% below the asking price and doesn't seem to make any sense. It's bank of Ireland.

Any recommendations? Should we be asking them to go to a different lender?

We obviously can't take a 30% hit on the price of our house

Any help would be appreciated!

kingstreet

Estate agents provide marketing appraisals and these can be hit and miss at best.

Mortgage lenders don't do valuations, they instruct chartered surveyors.

A chartered surveyor will use comparables, that's the recent (last 120 days) sold prices of similar property in the vicinity (0.5 miles or less.)

Have a look here;-

https://www.rightmove.co.uk/house-prices.html

for such comparables.

Would your buyer have the ammunition to lodge a valuation appeal to their lender based on what you can see?

Your buyer could change lenders, but with the small number of corporate survey firms around doing mortgage reports & valuations (Esurv, Connells, L&G Surveyors, ValueNation etc) there is a big chance the same surveyor might be instructed again.

Thrugelmir

YorkshireJames wrote: »

They got a valuation from their mortgage company, which was 30% below the asking price and doesn't seem to make any sense.

Have you seen the valuation? Or is this just hearsay.

getmore4less

What does your research say the place is worth.

Look at what people are buying.

pinkteapot

Did the surveyor actually do a visit or was it just done based on other sold price data?

Look for sold prices near you. Has a similar house sold oddly cheaply? If so, is it obvious what was wrong with it?

Is your house particularly unusual and therefore hard to value?

Valuations sometimes come in a bit lower but almost a third is a bit extreme... What sort of house value are we talking about?

stator

It's the buyer's problem, not yours.
Yes you should be telling them to find another lender or you will be finding another buyer!
Don't get too involved in it. If you start asking to see the survey report, they will be expecting you to take note of it and reduce your asking price.


Unless they have found some serious issue that you can take action on to resolve, just tell them to find another lender.

wesleyad

getmore4less wrote: »

What does your research say the place is worth.

Look at what people are buying.

But two people did try to buy it, at that price. Surely that's the definition of what it is worth.

Most of these threads are "we've had EA value it, and it's been on for 3 months with no offers" and clearly then the value isn't correct. A 30% below asking offer seems so low to as almost be a mistake. There isn't some confusion regarding the deposit is there? (eg they haven't valued at 70%, they have valued at 100% and hence offered 70%, with the other 30% being deposit)

davidmcn

wesleyad wrote: »

But two people did try to buy it, at that price. Surely that's the definition of what it is worth.

Not if it's impossible for them to get funding at the price they thought it was worth (or if they simply change their mind once a surveyor gives them a more objective idea of the value). Completed sales give you an idea of what properties are worth.

getmore4less

wesleyad wrote: »

But two people did try to buy it, at that price. Surely that's the definition of what it is worth.

Most of these threads are "we've had EA value it, and it's been on for 3 months with no offers" and clearly then the value isn't correct. A 30% below asking offer seems so low to as almost be a mistake. There isn't some confusion regarding the deposit is there? (eg they haven't valued at 70%, they have valued at 100% and hence offered 70%, with the other 30% being deposit)

Plenty of buyers out there not doing research and think asking/less a bit is OK.

Over priced 15% leaves 15% under by valuer well withing normal ranges.

Really need the more like this and sold through price data to know where it sits.

Gwendo40

You're not ''taking a 30% hit''.... you're discovering what your house is realistically worth.

Now you can proceed accordingly.

Doozergirl

wesleyad wrote: »

But two people did try to buy it, at that price. Surely that's the definition of what it is worth.

Most of these threads are "we've had EA value it, and it's been on for 3 months with no offers" and clearly then the value isn't correct. A 30% below asking offer seems so low to as almost be a mistake. There isn't some confusion regarding the deposit is there? (eg they haven't valued at 70%, they have valued at 100% and hence offered 70%, with the other 30% being deposit)

It's been known. The amount to be borrowed is going to be written somewhere and the valuer will never exceeed the agreed purchase price. So if someone's accidentally put the mortgage amount requested in a box instead of the agreed purchase price, you'll end up with a valuation of the mortgage amount.

30% under what you expected means that you expected it to be worth around 1.5 times the valuation. I think it's most feasible that someone's made a mistake somewhere. No-one gets interest and 3 offers at 1.5 the price of comparable properties.