Bank undervalued house 4% over our agreed offer. Thinking about possible consequences as buyer.

scruti

Grenage wrote: »

Rationally look at equivalent house sales and compare the prices. The estate agent's opinion is worthless - they work for the seller.


20k is still 20k. Only you can decide if it's worth more than the bank's estimate. One should remove all emotion from the house-buying process.

The thing is that, after comparing it with the asking prices on the houses in the same street (that we've been tracking for a few months), the price we offered did not feel overvalued at all.
There are few houses, some very small/quite old asking 440, multiple ones asking 485-500k. In this one, asking 500k, we found key differences respect other 2 we visited, offered 480k and got it.

The rational me says... yeah they're still on the market because they're overpriced, and probably those houses are worth 420-440k and the one you offered is worth 460 as the bank said.

letitbe90 wrote: »

I would be careful about getting into negative equity as, due to some changes with respect to IR35 in private sector, the contract market might change quite substantially in the next few months - and remortgaging might become tough as a result

This is a good point. I'm doing all my calculations based in a "could I afford this if I switch back to perm?". So the mortgage repayments would be quite close to our current rent (and would have quite a bit of room for rate increases).

hazyjo wrote: »

Not up to them to ask the surveyor to reconsider the valuation. Plus, size isn't everything. If the price is making that larger 2 bed more like the value of a 3 bed, then people are going to buy the 3 bed. There will be a ceiling price for a 2 bed, so make sure you're not paying over that.

Asking price for couple houses in the same street with loft conversion into a 3rd room... 600k. They were recently refurbished and look quite modern but... still asking 600k.

Again this is what people asks, who knows what is the real value.

scruti

Seems the sellers, upon the possibility of the sell falling apart, reconsidered how adamant they were about 480k as absolutely minimum price and ended accepting splitting the valuation difference and sell it for 470k.

We know we're overpaying 10k over the house value but this is a hit we can take given this house check all our boxes and there is no alternatives on the market for our location/condition requirements.

Also the change of tone from the State Agents in the call today together with the absolutely no changes in the status of the the other properties we visited made me realize how all the "we got a cash offer for XXX rejected as ridiculous" or "we got an offer of XXX but we would prefer you as first time buyers" are just BS in order to condition the number offered from us.

Good (and probably expensive) lesson.

Thanks everyone who tried to help us