Mortgage valuation 10k less than offer price

LSLDN

FTB, buying in London with no chain.
Property listed at £400k, offered 385 based on sold prices in the area, the fact it needs work and that we had no chain. We settled on 390k.
The mortgage valuation today has come back at 380k due to the condition of the property (essentially dry rot on the wooden staircase) and some woodworm issues.

I haven’t been back to the agent yet to try to negotiate this amount off the asking price.
I’m assuming they will be open to negotiating as presumably they’d hit a similar situation even if they refused and put it back on the market. They had no other offers on the table before us.
They are keen to sell I think.

Does anyone have any advice or wisdom to offer? It is much appreciated

middleclassbutpoor

If you still want to proceed, go back and negotiate based on the valuation.

LSLDN

There is nothing else of major concern on the survey so still keen to proceed.
I don’t have to show the agent the survey do I?

Slithery

No, but unless you do they're unlikely to believe the valuation.

middleclassbutpoor

They may want to see sight of it as anyone could say that their survey has come back saying its worth less.

I wouldn't let them take a copy though etc.

Just give them a call and explain that their property has been down valued and you would like to lower your offer as a result.

LSLDN

Sorry, to be clear I was referring to the more detailed Home Buyers Survey - my understanding was that I don’t have to share this with the agent/vendor, is that correct?
I’m happy for them to see the valuation report as proof

jonnygee2

Property listed at £400k, offered 385 based on sold prices in the area, the fact it needs work and that we had no chain. We settled on 390k.

As someone who bought in London this year I think you caved too easily there. Very difficult market to sell right now. They probably aren't getting any offers any time soon, especially this side of Christmas and Brexit. I'd go in with 375k.

Worst case they don't sell to you. But thankfully its London so there are other properties (lots of them) you can chose instead, and they won't find another buyer so thats really their problem not yours.

I don’t have to show the agent the survey do I?

Nope. If they ask for it tell them them to nose off and get their own survey.

Honestly, you are holding all the cards.

LSLDN

As someone who bought in London this year I think you caved too easily there

Possibly - it was listed at 415k to start with, they dropped to 400k pretty much simultaneously with us putting the offer in.
Because it had dropped into a new price bracket we maybe did settle a bit quickly to seal the deal.
As I said I haven’t approached the agent yet but I’m really hoping they see the reality of the situation as you’ve stated with Brexit / Christmas and don’t decide to remarket.
You say there are loads of properties in
London but this one is by FAR the best we’ve seen in >6 months of looking. It will be hard to walk away but if needs must then we will have to

jonnygee2

You say there are loads of properties in London but this one is by FAR the best we’ve seen in >6 months of looking. It will be hard to walk away but if needs must then we will have to

In that case it's probably worth sticking to. It's probably not objectively 'better' (if it was the valuer would have valued it higher!) but it means it meets your personal criteria.

But still, don't be scared to wield your power as a buyer a bit and offer the 380k.

LSLDN

I think that’s the issue - I’m new to all of this and nervous : objectively I know I do have power but I’ve (despite my best efforts) become emotionally invested. I will speak to the agent tomorrow morning.

And yes you’re right - it’s the best one in terms of what we’re looking for but it does need work - quite a lot of work really. The vendors have not done an awful lot over the 2 years they’ve owned and will still have made money if they accept our lower offer

davidmcn

Haggling over the difference between £380k and £390k? Split the difference and it's +/- 1.3%. Properties can go up (or down) that amount while you do the conveyancing, never mind in the longer term. It's well within normal margins of error for valuation.