How many people will re-negotiate the price after valuation?

917700

I asked the EAs a question, will the mortgage valuation usually be the same with the agreed price ( the final price) ? They said yes. 

I am just thinking, should I just offer the asking price. If the valuation come back with a lower figure, then ask the vendor to reduce the price? 

The recent data shows the asking price rise by 4.7%. However, we do see some people say their valuation come back and it’s lower than the agreed price. 

I feel the EA asking price is meaningless now, the mortgage valuation plays more important role in the process.

What do you think? 

917700

I am a FTB and don’t have much knowledge about the pricing strategy and negotiation game. 

What I am thinking is can I offer asking price. If the offer accepted, get the homebuyer survey and valuation done first, before go any further. If the valuation is much lower, then ask price reduction or pull out. 

MaryNB

While the valuation can have an significant impact but I wouldn't say it plays a more important role than the asking price. 

It may impact on your mortgage offer but it doesn't necessarily change what the vendor will accept. The asking price isn't meaningless if it's the minimum price the vendor will accept. A down-valuation gives you some grounds to renegotiate but the vendor can just refuse to lower the price and that's it.  If they know the down-valuation could jeopardise your mortgage offer, they may consider lowering the price. If they think you can still afford it regardless they could refuse, in the hope that you'll stick to your original offer because you fear you may lose the property. Or in the hope they'll get another buyer who will offer asking. You could always point out that if the vendor refuses to renegotiate and finds another buyer, the other buyer could end up with a lender that also down-values it.

Down-valuations seem to be more frequent when the lenders are nervous due to economic uncertainty - like they are now.

917700

MaryNB said:

While the valuation can have an significant impact but I wouldn't say it plays a more important role than the asking price. 

It may impact on your mortgage offer but it doesn't necessarily change what the vendor will accept. The asking price isn't meaningless if it's the minimum price the vendor will accept. A down-valuation gives you some grounds to renegotiate but the vendor can just refuse to lower the price and that's it.  If they know the down-valuation could jeopardise your mortgage offer, they may consider lowering the price. If they think you can still afford it regardless they could refuse, in the hope that you'll stick to your original offer because you fear you may lose the property. Or in the hope they'll get another buyer who will offer asking. You could always point out that if the vendor refuses to renegotiate and finds another buyer, the other buyer could end up with a lender that also down-values it.

Down-valuations seem to be more frequent when the lenders are nervous due to economic uncertainty - like they are now.

I completely agree with what you said. I am happy to pay what the property actually worth. I am not bothered about a few thousands difference. But I found it’s common now, the difference can be 5% - 10%. I remember a thread shared their recent experience, the agreed price was 470k, and the valuation is 35k lower. 

I feels this is kind of wasting of buyer, vendor and EA’s time. We spend time on negotiating an agreed price, and possibly we will enter a bidding war when there are multiple offers. 

wazza07

We had this happen to us recently. We offered £425k but the valuation came back at £400k. In the end we renegotiated and agreed to £415k. We’re still borrowing the same LTV as we’re borrowing less but just putting more down initially. Tbh we’re not bothered about paying over the valuation as it’s a house we intend to stay in for the next 20-30 years and is one of few that ticks all the boxes we’re looking for. 

Young_Turk

917700 said:

I asked the EAs a question, will the mortgage valuation usually be the same with the agreed price ( the final price) ? They said yes. 

I am just thinking, should I just offer the asking price. If the valuation come back with a lower figure, then ask the vendor to reduce the price? 

The recent data shows the asking price rise by 4.7%. However, we do see some people say their valuation come back and it’s lower than the agreed price. 

I feel the EA asking price is meaningless now, the mortgage valuation plays more important role in the process.

What do you think? 

It's not a good idea to offer the asking price with the plan that you will reduce it if the valuation is lower, unless you believe it is worth the asking price. There are several bad scenarios that could follow:
1) If your offer is high, but not ridiculously high, the valuation might well give the same figure. The result would be that you probably paid overpaying quite a lot.
2) The valuation might be lower, but still higher than you could have paid. Maybe the vendor agrees to the lower price, but you're still overpaying.
3) Maybe you tell the vendor you're reducing the price, but he asks you to buy at the price you offered (he might say: "The down-valuation means the bank will lend you less, but you can increase your deposit, and that's what I insist you do!"). If you are in a position to increase your deposit you either choose to do so, probably overpaying, or you have to look elsewhere.

Asking prices aren't meaningless, but you have to realise there are different strategies a vendor and EA will take. Some ask for a low price to get a lot of interest and then may receive the asking price or more. Others ask for a high price - they may get lucky and receive a high offer, or buyers may offer 5-10% off of whatever, thinking they have a bargain, but they are still paying a lot.
If in doubt, offer low.

zv13424

I can only speak from my personal experience but we renegotiated after valuation.
Initially listed as OIEO £180k, offer of £185k accepted (and we would have been happy to pay this) but valuation at £175k. 

Offered £178k and vendor accepted. 

AK1212

I believe it is worth renegotiating, not necessarily all the way down to the downward valuation but a compromise in between. 

The seller may know that even if they reject the offer, the same scenario may play out with the next buyer on their valuation and so on. The seller will therefore not really want to waste all that time and instead seek a compromise on price straight away. 

lesalanos

917700 said:

MaryNB said:

While the valuation can have an significant impact but I wouldn't say it plays a more important role than the asking price. 

It may impact on your mortgage offer but it doesn't necessarily change what the vendor will accept. The asking price isn't meaningless if it's the minimum price the vendor will accept. A down-valuation gives you some grounds to renegotiate but the vendor can just refuse to lower the price and that's it.  If they know the down-valuation could jeopardise your mortgage offer, they may consider lowering the price. If they think you can still afford it regardless they could refuse, in the hope that you'll stick to your original offer because you fear you may lose the property. Or in the hope they'll get another buyer who will offer asking. You could always point out that if the vendor refuses to renegotiate and finds another buyer, the other buyer could end up with a lender that also down-values it.

Down-valuations seem to be more frequent when the lenders are nervous due to economic uncertainty - like they are now.

I completely agree with what you said. I am happy to pay what the property actually worth. I am not bothered about a few thousands difference. But I found it’s common now, the difference can be 5% - 10%. I remember a thread shared their recent experience, the agreed price was 470k, and the valuation is 35k lower. 

I feels this is kind of wasting of buyer, vendor and EA’s time. We spend time on negotiating an agreed price, and possibly we will enter a bidding war when there are multiple offers. 

Found it's common?  
How have you researched this?

iwb100

You can renegotiate at any point in the process for any reason. But there is no guarantee your seller will accept. It’s not a good strategy to aim to do this though. Make your offer and stick to it unless your survey or searches throw up something. Or of course your mortgage valuation means you can’t afford the property..,

917700

lesalanos said:

917700 said:

MaryNB said:

While the valuation can have an significant impact but I wouldn't say it plays a more important role than the asking price. 

It may impact on your mortgage offer but it doesn't necessarily change what the vendor will accept. The asking price isn't meaningless if it's the minimum price the vendor will accept. A down-valuation gives you some grounds to renegotiate but the vendor can just refuse to lower the price and that's it.  If they know the down-valuation could jeopardise your mortgage offer, they may consider lowering the price. If they think you can still afford it regardless they could refuse, in the hope that you'll stick to your original offer because you fear you may lose the property. Or in the hope they'll get another buyer who will offer asking. You could always point out that if the vendor refuses to renegotiate and finds another buyer, the other buyer could end up with a lender that also down-values it.

Down-valuations seem to be more frequent when the lenders are nervous due to economic uncertainty - like they are now.

I completely agree with what you said. I am happy to pay what the property actually worth. I am not bothered about a few thousands difference. But I found it’s common now, the difference can be 5% - 10%. I remember a thread shared their recent experience, the agreed price was 470k, and the valuation is 35k lower. 

I feels this is kind of wasting of buyer, vendor and EA’s time. We spend time on negotiating an agreed price, and possibly we will enter a bidding war when there are multiple offers. 

Found it's common?  
How have you researched this?

I should say more likely, not common. I
am new to the forum and I am not familiar with searching old threads. I read the tread on MSE House buying & selling and Mortgage category everyday. And I did see more threads
and posts are sharing their down valuation experience than before.