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

Slithery

tweeto said:

dani17 said:

Offer just what you think the house does worth. a lot of surveyor will agree the accepted price if it is not "too far" from the market. so you may offer 10% more and the surveyor will still approve it.

Do the surveyors that the bank instruct to carry out the valuation know what you have offered beforehand? 

Yes. 

Thrugelmir

tweeto said:

dani17 said:

Offer just what you think the house does worth. a lot of surveyor will agree the accepted price if it is not "too far" from the market. so you may offer 10% more and the surveyor will still approve it.

Do the surveyors that the bank instruct to carry out the valuation know what you have offered beforehand? 

They have to. As they are being asked whether the property provides adequate security for the monies being advanced. Hence the disparity when potential borrowers make offers with other peoples money.  Very different viewpoints. 

tweeto

Thrugelmir said:

tweeto said:

dani17 said:

Offer just what you think the house does worth. a lot of surveyor will agree the accepted price if it is not "too far" from the market. so you may offer 10% more and the surveyor will still approve it.

Do the surveyors that the bank instruct to carry out the valuation know what you have offered beforehand? 

They have to. As they are being asked whether the property provides adequate security for the monies being advanced. Hence the disparity when potential borrowers make offers with other peoples money.  Very different viewpoints. 

Oh right, I see. I wasn't sure exactly how it worked, whether they just valued it without knowing what was paid and then the lender weighed up the difference to see if it made sense. 

I guess with them knowing the price offered they can factor in some tolerance if its close. 

Crashy_Time

917700 said:

Angela_D_3 said:

I can only speak from my circumstances but the offer we accepted was the lowest I can take.  If it comes back down valued honestly the house will be pulled off the market because there simply isn't a penny of room for manuvor.  So if they want it they pay and if they don't the house won't be sold.   That simple

This make sense, some vendor probably spent a lot money on home improvement after they bought the property. 

It doesn`t make sense for people who actually need to move though, the people who actually make the market?

Crashy_Time

lesalanos said:

917700 said:

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.

There are a handful of threads with lower valuation. The hundreds of people with matching valuations don't share their experiences.

I would say it's the exception rather than more likely 

I would say it is much more likely than it was a couple of years ago.

bolwin1

Thrugelmir said:

tweeto

Do the surveyors that the bank instruct to carry out the valuation know what you have offered beforehand? 

They have to. As they are being asked whether the property provides adequate security for the monies being advanced. Hence the disparity when potential borrowers make offers with other peoples money.  Very different viewpoints. 

I have a related question - does the surveyor know how much is being borrowed for the house ? Are they more likely to down value a property at a 90% LTV than one with a 20% LTV ? Clearly the latter is much safer for the mortgage provider. 

Crashy_Time

Angela_D_3 said:

I can only speak from my circumstances but the offer we accepted was the lowest I can take.  If it comes back down valued honestly the house will be pulled off the market because there simply isn't a penny of room for manuvor.  So if they want it they pay and if they don't the house won't be sold.   That simple

Most buyers will just move on to the next house, you have to sell yours if you want to move, they can buy any one of probably hundreds.

Parties03

I just got a call from my mortgage broker that the house we have offered on has come back 10k lower with mortgage valuation than the offer we placed.  House went on Friday afternoon, we viewed Saturday morning along with 5 other people and we offered asking price of 450k as soon as we got in the car; houses in the area and that size are going very quickly - the EA said the vendors had other offers that weekend too but decided to go with us. As there was no negotiation in this conversation so I believe they would have been similar range but we were in the best position (have SSTC) but also would have been the highest (possibly equal with another) offer. 

Mortgage broker proposed 3 options;
- renegotiate with the vendors
- i'm holding back some equity from the sale of my current house for future works on this one, so put some of that towards it to make up the difference in valuation
- have a higher LTV ratio and subsequently a worse rate - this isn't really an option for me. 

We had a building survey carried out on the house this week also so I'm going to wait for the result of that and see where a re-negotiation leads.  Worth mentioning - the neighbour (literally identical house but needs internal renovation and no extension on the back) was on for 75k less the week after we saw this one, and a house opposite has been reduced from 375k to 350k. So I am curious what the survey will say. 

Crashy_Time

Parties03 said:

I just got a call from my mortgage broker that the house we have offered on has come back 10k lower with mortgage valuation than the offer we placed.  House went on Friday afternoon, we viewed Saturday morning along with 5 other people and we offered asking price of 450k as soon as we got in the car; houses in the area and that size are going very quickly - the EA said the vendors had other offers that weekend too but decided to go with us. As there was no negotiation in this conversation so I believe they would have been similar range but we were in the best position (have SSTC) but also would have been the highest (possibly equal with another) offer. 

Mortgage broker proposed 3 options;
- renegotiate with the vendors
- i'm holding back some equity from the sale of my current house for future works on this one, so put some of that towards it to make up the difference in valuation
- have a higher LTV ratio and subsequently a worse rate - this isn't really an option for me. 

We had a building survey carried out on the house this week also so I'm going to wait for the result of that and see where a re-negotiation leads.  Worth mentioning - the neighbour (literally identical house but needs internal renovation and no extension on the back) was on for 75k less the week after we saw this one, and a house opposite has been reduced from 375k to 350k. So I am curious what the survey will say. 

The survey says you are probably overpaying IMO.......

917700

It seems like more down value stories on the forum now.

Will you continue Buy or Sell when down value happens?