The bank just undervalued our house!!!

EmmaHampson

We have sold our house in a private sale for 80000 pounds. It was valued at 85-95000 by 4 different estate agents. The buyer got a basic valuation with HSBC. The person who valued our house was barely in the house and extremely rude and unprofessional. We had a bad feeling about him when he first called me at work. He undervalued our house to 75000. With this drop in price we will be unable to buy our next house current house with the mortgage that we have (15% deposit). Can you please help? Is there anything else we can do? Our buyer only has a 10% deposit and 90% mortgages are few and far between. However our  mortgage advisor has advised us that a lot of banks (especially with 90% mortgages) have been undervaluing houses due to Covid-19. Surely this is wrong. The house we bought has not been affected by this as it went through a lot earlier.

Slithery

The valuer has priced it correctly. Both you and the EA's over-valued it - unfortunately it's just not worth as much as you thought it was.

[Deleted User]

It's not an unusual scenario, have some conversations with all other parties and try to reach satisfactory agreements, no need to fall at the first hurdle you come to.
House buying is often a headache from the start to finish, of course exceptions to the rule exist but more often there are issues all along.

Martin_the_Unjust

The estate agents want your business, they are always going to over value it, the prospective buyer wants your house, there is always the chance they'll view it through rose tinted glasses.

The valuer has no incentive to do anything other than give it's true value.

Flugelhorn

Have to try to split the difference with the buyer - also see if you can negotiate on one you are buying. Get the agents involved they will not want to lose a sale.
this happens all the time, more so when markets are volatile.  I sold one years back - was offered 185, surveyor said 175, purchasers ran a mile - silly as I was always prepared to accept 175

RelievedSheff

You either have to come to an agreement with the price of the property or the sale will fall through. Your buyers could try another mortgage company who use a different valuation company but if they are after a 90% mortgage then their choices will be extremely limited at the moment.

warby68

Why did you sell for £80k when agents said £85-95k? Doesn't that show you that there is no single value for a property? A £5k variance was very common even before Covid19. You won't persuade professionals that something isn't fair -  they are the least biased of the parties. If they think Covid 19 affects the value then you have to accept that it does. Its down to negotiation between all parties to try and get the deal done. If you took a bit, your vendor another and your buyers a little too it might be manageable.  Another lender when there are hardly any for low deposit buyers is unlikely to resolve it. You say your onward purchase is a done deal but it can't be if you are depending on this sale. Was it just that the valuation was done pre-pandemic? You can still negotiate but I know its tricky.
Also from a cautionary perspective if you are onto your second home but £5k 'breaks' you it might be too stretching for you anyway, particularly in such uncertain times.

AdrianC

If your buyer is relying on a 90% LtV mortgage, I suspect you're stuffed anyway, given how few and far between they are.

Assuming they can get the 90% mortgage, then there's nothing to stop them buying - they just to find another £4.5k equity...
90% LtV at £80k val = £72k borrowed, £8k equity
90% LTV at £75k val on £80k purchase = £67.5k borrowed, £12.5k equity

boxer234

It happened to me before lockdown.  I had the choice of dropping the price or keeping on the market hoping another valuer prices higher.  I sold at a lower price.  The man who came from the bank was very serious and didn’t say much I guess they don’t engage as people probably try and talk their property up. 

Crashy_Time

Slithery said:

The valuer has priced it correctly. Both you and the EA's over-valued it - unfortunately it's just not worth as much as you thought it was.

This I`m afraid, ultimately it is worth what a bank or cash buyer say it is worth.

Crashy_Time

boxer234 said:

It happened to me before lockdown.  I had the choice of dropping the price or keeping on the market hoping another valuer prices higher.  I sold at a lower price.  The man who came from the bank was very serious and didn’t say much I guess they don’t engage as people probably try and talk their property up. 

Probably embarrassed at the mess they have created.