When the buyer's lender values the house £15k less than the agreed offer...

CharlieT130

As of today we're in exactly the same position - lender downvalued by £13k without giving a reason (not that they have to), but our buyers are still keen to proceed and have offered £2k above the valuation. We took this as a sign of good faith and we want a quick sale as we're relocating for work. For us the risk of the chain collapsing and having to start all over again (lost time), and potential future down valuations (we'd lose the money anyway) was much greater than the financial hit.

It only took a 10 minute discussion with my partner to decide to accept the lower offer with the caveat that there won't be any further reductions as a result of the homebuyers survey, which has yet to come back. It was a kick in the teeth of course and my partner is very annoyed at the EA for over-valuing (I don't quite share that view myself), but still an absolute no brainer once we'd weighed the risks.

We have no intention of reducing our offer on our purchase, which has already been accepted by our lender as that doesn't seem fair or ethical to us.

martin2345uk

CharlieT130 said:

As of today we're in exactly the same position - lender downvalued by £13k without giving a reason (not that they have to), but our buyers are still keen to proceed and have offered £2k above the valuation. We took this as a sign of good faith and we want a quick sale as we're relocating for work. For us the risk of the chain collapsing and having to start all over again (lost time), and potential future down valuations (we'd lose the money anyway) was much greater than the financial hit.

It only took a 10 minute discussion with my partner to decide to accept the lower offer with the caveat that there won't be any further reductions as a result of the homebuyers survey, which has yet to come back. It was a kick in the teeth of course and my partner is very annoyed at the EA for over-valuing (I don't quite share that view myself), but still an absolute no brainer once we'd weighed the risks.

We have no intention of reducing our offer on our purchase, which has already been accepted by our lender as that doesn't seem fair or ethical to us.

Ah sorry to hear you're in the same boat! Yes like you we have decided to go with the lower offer, they have still offered 5k over the lower valuation. Plus if we pull out, as people on here have said, any new buyers might end up with exactly the same lower valuation so we would be back to square one. Also, I don't wanna risk missing the stamp duty holiday when I buy my next house!
Annoying but I guess just one of those things...

Crashy_Time

MaryNB said:

martin2345uk said:

So we have agreed an offer on our house with a buyer, for £290k (asking price was £300k, but Corona and all that, plus I do think 300k was probably a bit optimistic to start with).
We are at the signing contracts stage, but the agent just phoned to say the buyer's lender has downvalued the house, apparently citing the pandemic. They have said it's worth £275k; and the buyers have said with savings they could stretch to £280k...

I'm just not sure what to do! Honestly this whole house business is so stressful. I don't understand why it has taken so long, their valuer person came round on June 29th, 22 days it's taken them to tell us this...

I guess it's either accept this new offer or start all over again..! :-(

Down valuations by lenders are more likely if there is economic uncertainty. It won't be just the one lender. Several banks have already been increasing minimum deposits as a result of concerns over the economy. Therefore, if you pull out, start the process again, another lender could end up at a similar valuation.

Given a stamp duty holiday has been introduced since this valuation occurred, will you be able to take advantage of it? If so, you make up some, if not all, of the loss. 

Yes, and I think we can all agree that this element is now present big time! Which makes the posters who would tell buyers to "Do one" etc. sound even more out of touch than usual.

Crashy_Time

martin2345uk said:

CharlieT130 said:

As of today we're in exactly the same position - lender downvalued by £13k without giving a reason (not that they have to), but our buyers are still keen to proceed and have offered £2k above the valuation. We took this as a sign of good faith and we want a quick sale as we're relocating for work. For us the risk of the chain collapsing and having to start all over again (lost time), and potential future down valuations (we'd lose the money anyway) was much greater than the financial hit.

It only took a 10 minute discussion with my partner to decide to accept the lower offer with the caveat that there won't be any further reductions as a result of the homebuyers survey, which has yet to come back. It was a kick in the teeth of course and my partner is very annoyed at the EA for over-valuing (I don't quite share that view myself), but still an absolute no brainer once we'd weighed the risks.

We have no intention of reducing our offer on our purchase, which has already been accepted by our lender as that doesn't seem fair or ethical to us.

Ah sorry to hear you're in the same boat! Yes like you we have decided to go with the lower offer, they have still offered 5k over the lower valuation. Plus if we pull out, as people on here have said, any new buyers might end up with exactly the same lower valuation so we would be back to square one. Also, I don't wanna risk missing the stamp duty holiday when I buy my next house!
Annoying but I guess just one of those things...

Not bad TBH.

denise38

So glad we live in Scotland . Home report is done prior to house going on the market and valuation done . Means seller knows the houses worth and any faults before putting on the market . Home report is refreshed on sale if it’s more than 12 weeks old . Daughter just bought a house which was valued last year at £80 k . We were pleased last week that value was still same not that it mattered too much as she agreed a price way below valuation . I hate paying money up front As a seller to prepare the pack but as a buyer it’s certainly a better system 

Crashy_Time

denise38 said:

So glad we live in Scotland . Home report is done prior to house going on the market and valuation done . Means seller knows the houses worth and any faults before putting on the market . Home report is refreshed on sale if it’s more than 12 weeks old . Daughter just bought a house which was valued last year at £80 k . We were pleased last week that value was still same not that it mattered too much as she agreed a price way below valuation . I hate paying money up front As a seller to prepare the pack but as a buyer it’s certainly a better system 

Good money saving move, should go down well on here.

eidand

denise38 said:

So glad we live in Scotland . Home report is done prior to house going on the market and valuation done . Means seller knows the houses worth and any faults before putting on the market . Home report is refreshed on sale if it’s more than 12 weeks old . Daughter just bought a house which was valued last year at £80 k . We were pleased last week that value was still same not that it mattered too much as she agreed a price way below valuation . I hate paying money up front As a seller to prepare the pack but as a buyer it’s certainly a better system 

Scotland's system does sound more intelligent tbh. Wish we had it in England as well

Crashy_Time

Recent talk of shifting the tax burden to sellers could be an intelligent move?