Disaster - HSBC have valued the flat at 20k under what I offered

ForzaFifer

Long story short - flat was on the market for 275k, I had an offer accepted at 280k, HSBC have just finished their valuation and are telling me they think the property is only worth 260k.

Im not totally sure how they have reached that conclusion, they will email me the details. HSBC have advised me to try re-negotiate with the vendor.

Has anyone else had this experience?

The flat was on the market quite a while, and the seller was keen to sell, so it might end up working in my favour.

The property in located in East London.

middleclassbutpoor

Property was on market for a while and you offered more?

Did you get in a bidding war?

Surveyor may have saved you from a disaster...

LRmortgage

In this market I’m not sure how you ended up offering more than the asking price.

Go back and renegotiate with an offer of 260k

ForzaFifer

I had been looking for ages, it was the only property I liked, I still thought it was cheap for the area.

I’m a first time buyer, so no experience of any of this. It had only been on the market at the price for a short time.

davidmcn

ForzaFifer wrote: »

flat was on the market for 275k, I had an offer accepted at 280k, HSBC have just finished their valuation and are telling me they think the property is only worth 260k.

Im not totally sure how they have reached that conclusion

How did you reach the conclusion that it was worth £280k?

Thrugelmir

ForzaFifer wrote: »

HSBC have just finished their valuation and are telling me they think the property is only worth 260k.

Lenders subcontract valuations to external surveyors.

dunstonh

Most people using an estate agent put the price above what they expect to receive knowing they will be knocked down a bit.

Some vendors just try it on hoping some mug will pay the money and dont mind waiting it out.

The flat was on the market quite a while, and the seller was keen to sell, so it might end up working in my favour.

Not logical. Keen to sell but requiring you to put in an offer above the agent price does not go together.

That said, the people we are buying from accepted 8.5% less on their latest "offers over" price after being on the market for 2 years having started at a price 15% higher than that. Hoping that someone moving out of London would snag it thinking it was cheap.

What the estate agent has it up for could be 15% over what it is really worth.

ForzaFifer

I’ve already answered that. I viewed about 10 properties all of them valued between 275 and 300, I thought it was better than all the flats I’d seen. It seemed to be the going rate at the time. My mate paid 400k for a two bed in the same area a year ago. A small 2 bed at that.

I was just hoping to read about examples of this happening to other folk, and what happened next.

davidmcn

ForzaFifer wrote: »

I viewed about 10 properties all of them valued between 275 and 300, I thought it was better than all the flats I’d seen. It seemed to be the going rate at the time.

It's what properties sell for that matters, not the asking price - so what you should be looking at are the prices for completed transactions. That's what the surveyors are using.

It could be that there's some conflicting evidence and it could be argued either way (percentage-wise, it's not all that massive a difference if you consider that the "correct" answer may be somewhere in the middle).

Or perhaps the surveyor has a point and it's clear that the EA is being ambitious, in which case you have a stronger case for renegotiating.

ForzaFifer

For example, here is a similar sized property in the same area https://www.rightmove.co.uk/house-prices/detailMatching.html?prop=71505374&sale=7729153&country=england

Anyway, all I can do now is try renegotiate I suppose.

AnotherJoe

ForzaFifer wrote: »

I was just hoping to read about examples of this happening to other folk, and what happened next.

Any of:
You renegotiate to lower price.
You renegotiate lower and make up part the difference yourself
You challenge the valuation and a second one comes in higher or it doesn't.
Vendor refuses to take lower offer and you make uo the difference
Vendor refuses to take lower offer and you walk.