Mortgage valuation has under valued

System

MobileSaver wrote: »

Does the OP follow the Crashy/Diocletian "cunning plan" and keep renting ?.

Again, Crashy and Diocletian 2 are doing what the smart money is doing. Not what the dumb money on MSE is advising:

Thanks to Jeremy Corbyn and Brexit, Britain's army of super-rich renters is going to get bigger
The Daily Telegraph 10th Oct 2019

https://www.telegraph.co.uk/business/2019/10/10/thanks-corbyn-brexit-britains-army-super-rich-renters-going/

getmore4less

The reality is that if this is the house you want and there is nothing currently suitable for £10k less thne you have a waiting game.

Stay where you are or get on with your life.

If that is renting you could end up costing more than £10k over the next few years.

If this move is a step up with another one on the cards in a few years then waiting won't be so bad.

If this is the one for a long time at this level £10k gets eaten up in the standard variance of valuers wiggle room +-5%

£60 a month over 15y years might not be so bad to live in a house you want if you can't find the cheaper one.

steampowered

The valuation is totally irrelevant.

The only thing thing that is relevant is what other houses are available in the area. You have to live somewhere.

If the valuer would value another house at £270k but you would prefer to live in this house, you should of course buy this house.

The Op can either spend their £268k on this house, or they can use that money to buy another house. It is totally up to the Op.

kinger101

Diocletian_II wrote: »

It's not just how long it takes to earn £10,000, it's how long it takes to save up £10,000. Say an average person has superfluous income (after all expenditure) of £400-£500 a month, they would need to work for 2 years to save up that £10,000 again. If they blow an unnecessary £10,000k in a few minutes by half-hearted negotiations, they then pay for it by working an extra 2 years in a job they may hate.

You're partly right. We need to think about how long it takes to save £10K. But the other side of the coin is rent.

With a £200K 25 year mortage, you'll pay back over £500 a month in capital. If you stay renting, you won't be accruing any capital on your housing costs.

The question then becomes if you give up the opportunity to buy house 1 because of a £10K over-valuation*, when will you find house 2, and what's the risk this will also be overvalued.

In a rising market, I'd probable swallow the £10K. In today's market, it's less clear cut. Personally, I'd probably aim to negotiate this one lower or walk away, but it would to extent depend on the house and my experience with the search.

*in any event, house valuations do not provide an absolute price of the houses value.

Crashy_Time

kinger101 wrote: »

You're partly right. We need to think about how long it takes to save £10K. But the other side of the coin is rent.

With a £200K 25 year mortage, you'll pay back over £500 a month in capital. If you stay renting, you won't be accruing any capital on your housing costs.

The question then becomes if you give up the opportunity to buy house 1 because of a £10K over-valuation*, when will you find house 2, and what's the risk this will also be overvalued.

In a rising market, I'd probable swallow the £10K. In today's market, it's less clear cut. Personally, I'd probably aim to negotiate this one lower or walk away, but it would to extent depend on the house and my experience with the search.

*in any event, house valuations do not provide an absolute price of the houses value.

It is unlikely IMO that many houses for sale now are only 10k over-valued, they are probably over-priced by way more than that, so the potential loses down the line for the OP are greater than you imply, and you also have to factor potential interest rate rises into your 25 year thinking.

RelievedSheff

Crashy_Time wrote: »

It is unlikely IMO that many houses for sale now are only 10k over-valued, they are probably over-priced by way more than that, so the potential loses down the line for the OP are greater than you imply, and you also have to factor potential interest rate rises into your 25 year thinking.

Have you included potential house price rises in your 25 year thinking?

That house you are waiting for will only get further and further out of reach the longer you wait :cool:

newsgroup_monkey

RelievedSheff wrote: »

Have you included potential house price rises in your 25 year thinking?

That house you are waiting for will only get further and further out of reach the longer you wait :cool:

Not to mention the capital you haven't paid off whilst renting.
If you had taken out a mortgage when House Price Crash was borne which predicted disaster, you'd have now paid 2/3rds of that mortgage off.


Not only that, the value of your house will have increased by 80%. In fairness, this is fairly irrelevant, because anything you would want to buy has also increased by 80%.

kinger101

Crashy_Time wrote: »

you also have to factor potential interest rate rises into your 25 year thinking.

rents rise too

lookstraightahead

Would you pay over for a holiday / dress / sofa?

Basically vendors always think their houses are worth more because estate agents lull them into a false sense of security. Also in the U.K. people have an unhealthy relationship with bits of earth.

I would never ever pay more than valuation, especially if the vendors are being silly and protective about their egotistical net worth.

Move on. Don't be taken for a ride. The vendor is hoping you will.

lookstraightahead

MobileSaver wrote: »

Oh the irony of Crashy Time educating others on the biggest financial mistake they can make. :rotfl:

Everything in life is relative; £10k extra for most cars is significant, £10k extra for a house is relatively trivial.

There's no evidence the OP would be overpaying anyway; a lender's valuation is only to protect the lender, it is not a proper impartial RICS valuation.

Only if you are boring and stay in the same house for ever yawn. All houses are overpriced it's just a big game. But house owners ignore this.