House valued at 10K less than we've agreed...

MrsGreen0872

The surveyor employed by the bank has valued the house we are buying at 10K less than we've agreed to pay for it. As far as we can see from the report, this isn't due to any structural issue, it's down to similar property sales in the locality.

Apparently the mortgage is otherwise approved.

Does anyone have any experience with renegotiating? I'm just thinking they may have needed the original agreed price for their next deposit so I am panicking now!

Mutton_Geoff

MrsGreen0872 wrote: »

The surveyor employed by the bank has valued the house we are buying at 10K less than we've agreed to pay for it. As far as we can see from the report, this isn't due to any structural issue, it's down to similar property sales in the locality.

Apparently the mortgage is otherwise approved.

Does anyone have any experience with renegotiating? I'm just thinking they may have needed the original agreed price for their next deposit so I am panicking now!

Why should you be financing your vendors personal wishes? You are carrying out due diligence on your purchase and your professional advisors have told you that you are overpaying.


You now have the information to amend your offer or pay the excess if it's the property you really want and the vendors won't reduce their price. Unfortunately the agent doesn't work for you and they would have had the vendors believe in their inflated valuation, it's now up to you to put them right.


There are dozens of posts asking the same question as you, they pop up almost every day. Try searching this forum or just scrolling through a few of the likely posts.

[Deleted User]

MrsGreen0872 wrote: »

The surveyor employed by the bank has valued the house we are buying at 10K less than we've agreed to pay for it. As far as we can see from the report, this isn't due to any structural issue, it's down to similar property sales in the locality.

Yes, this is what bank's surveyors do they won't do a structural survey just value it based on its general condition and the market.
When you employ your own surveyor to provide you with a structural report that is when they look more closely at things and might even uncover some costly defaults and repairs that need doing.

Sounds like the house was way overpriced. If they aren't prepared to negotiate the price then i'd seriously consider walking away.

MrsGreen0872

Thank you both for your help

MysteryMe

For all any of us know, £10,000 could represent 2% of the total amount or 10%

You need to discuss this with the vendors/ EA and try and negotiate a reduction. You are not just randomly trying to gazunder, you are basing it on the valuation report so you are being reasonable to negotiate.

If the vendor wont negotiate, and yes there may be a set amount they need in order to buy, you have to decide whether you still want to proceed or not. A lot depends on your circumstances. If this is going to be a long term family home you might come to a different decision then if it is a starter home that you will be seeking to move from after 2/3 years years. Your decision may also be influenced by the other housing stock available. If there are other similar houses on the market you have more options then if this is a rarely available property.

AdrianC

What is the mortgage LtV based on the valuation?
What is it at your originally accepted offer?

scruti

Gone through the same (last week with 20k price difference, opened a post here too) and the vendors that originally were adamant they couldn't go lower because they needed the money for their new place... quickly agreed into splitting the difference between the valuation and the price.

We're still overpaying, but we got the house that had clear differences respect similar valued properties and those differences are important for us, so we are happy with the output.

Crashy_Time

Mutton_Geoff wrote: »

Why should you be financing your vendors personal wishes? You are carrying out due diligence on your purchase and your professional advisors have told you that you are overpaying.


You now have the information to amend your offer or pay the excess if it's the property you really want and the vendors won't reduce their price. Unfortunately the agent doesn't work for you and they would have had the vendors believe in their inflated valuation, it's now up to you to put them right.


There are dozens of posts asking the same question as you, they pop up almost every day. Try searching this forum or just scrolling through a few of the likely posts.

Good point that more people need to get IMO.

iampetesmith

Down-valuations are quite common now. We offered 5k over, partly to put us ahead of the competition, partly because the house looked immaculate and partly because he was leaving a lot of the white goods and big furniture behind, which would save us buying them.

The bank's surveyors don't take that into account though and valued it at the asking price, as that's what others in that area were on the market for.

I had to renegotiate the price and the vendor accepted, but I hated calling the estate agent up and reducing the offer as it felt like I was gazundering him, even though it wasn't my choice. They didn't get back with answer either until the next day, so that was a night of wondering if we lost the house.

You might be in luck, as the vendor will have to decide whether it's worth starting again with another buyer, only for their mortgage company to value it at the same amount. If they accept, then you get the house for a cheaper price than you planned and so you have some extra leftover from your deposit and your mortgage payments will be slightly lower.

It all depends on whether the vendor thinks they'll get more with a different buyer with a different mortgage company, and how far along in the process you've gone.

Crashy_Time

Deleted_User wrote: »

Yes, this is what bank's surveyors do they won't do a structural survey just value it based on its general condition and the market.
When you employ your own surveyor to provide you with a structural report that is when they look more closely at things and might even uncover some costly defaults and repairs that need doing.

Sounds like the house was way overpriced. If they aren't prepared to negotiate the price then i'd seriously consider walking away.

Best advice in this market really.