Considering the bank valuation when making a sealed bid

AdrianC

Whether you're a cash buyer or needing a mortgage, you'd be a fool to offer more than what you think it's worth...

The only difference between a mortgage buyer and a cash one is that the mortgage buyer has somebody else adding their 2p of what they think it's worth - but even that can usually be overridden, just at the expense of a change to the LtV of the loan.

AnotherJoe

rococomaiden wrote: »

Sorry for not clarifying; this is in England.

I was told that the bank does a valuation to ensure that the house is worth what you are asking to borrow.

Well yes, thats what lenders do !

davidmcn

rococomaiden wrote: »

I was told that the bank does a valuation to ensure that the house is worth what you are asking to borrow.

They do, but what "valuation" are you talking about here?

rococomaiden wrote: »

The estate agent confirms the property was listed below the valuation in order to sell quickly but won't give us a figure.

Crashy_Time

rococomaiden wrote: »

Sorry for not clarifying; this is in England.

I was told that the bank does a valuation to ensure that the house is worth what you are asking to borrow.

Yes, and recently they tend to "down-value".

eddddy

You just offer what you're prepared to pay.

If your offer is accepted, and mortgage lender eventually values it lower than your offer - your options include:

• Buy it anyway at the price you offered - assuming you still have enough mortgage plus cash

• Try to negotiate your offer downwards - but the seller might refuse, and go with somebody else who offered instead

• Walk away

Thrugelmir

rococomaiden wrote: »

Unfortunately no properties have sold on this road in 2 years and it is a park-facing road so the nearby properties are not really comparable.

Location, location, location.

One buyer will be prepared to pay a premium.

Offer what you can afford to spend.

If your offer is accepted and the valuation is lower. Walk away. At least you tried. Better to do that than eternally have regrets.

rococomaiden

If the bank we go with comes back with a low valuation, how easy/time consuming is it to go to another bank to see if their valuation is higher?

If there are no cash buyers surely everyone else trying to buy the place would have the same issue?

letitbe90

rococomaiden wrote: »

If the bank we go with comes back with a low valuation, how easy/time consuming is it to go to another bank to see if their valuation is higher?

If there are no cash buyers surely everyone else trying to buy the place would have the same issue?

It’s not simple as you have to qualify for not just another lender but also have to check they use a different valuation service - and then hope they also value it higher!

I would check house value estimations online - there are a few free ones which collect data from various sources and will give you some indication what a banks valuation provider software may return.

davidmcn

rococomaiden wrote: »

If there are no cash buyers surely everyone else trying to buy the place would have the same issue?

Possibly, but they (probably) won't all be using the same surveyor, and different surveyors will come up with different valuations.

hazyjo

letitbe90 wrote: »

I would check house value estimations online - there are a few free ones which collect data from various sources and will give you some indication what a banks valuation provider software may return.

Like Zoopla?! Forget that. Not to be even vaguely relied upon.


(Undervalued a house I sold by around £100k, and overvalued another by somewhere in the region of £150k more). Loads of similar stories on here.