Downvalued property - estate agent won't negotiate

hollybbb

Hi there,
I'm feeling slightly ill with stress at this point, and hoping to get a grasp on things. My partner and I are first-time buyers and have just had the house we're buying down valued by the mortgage provider. We offered the full asking price of £575,000 on a property we loved. We thought it was a great deal as it was initially on for £600,000, alongside the stamp duty holiday. However, when our mortgage came through, their valuer said it's only worth £557,000 - a difference of £18,000. 

The moment we told the estate agent, he erupted. Took it almost as a personal affront, and spent an hour essentially yelling at us and telling us the bank was wrong, the survey was unfair, and the valuer did a 'drive by' job which is 'ridiculous'. We put him in touch with our broker to try and see if we could come to a deal, and, instead, he just verbally abused our broker again. Apparently he kept saying "He has done big deals in his time" like some David Brent character, and then rang us back to tell us how awful our broker was and how "he wasn't doing us any favours." Our broker was totally bemused! 

We sought further professional advice which is that prices are expected to drop, and it would be very foolish to pay £18,000 over what a bank deems a property is worth. We are lucky in that we could just about afford the difference ourselves, but it would be a huge financial risk on our part. We entered a new offer this morning for £562,000, which is still £5000 over, which we thought was reasonable. But it's been rejected immediately. The estate agent still deems the bank's valuation to be wrong, and the sellers have said they will only continue with the sale if it's at £575,000. 

The survey has come back fine. We have everything in place to exchange and move. Also, the sellers aren't in a chain. They are selling the house after inheriting it when their mother died. We really don't want to lose the house, but also feel we would be crazy to pay so much over the odds. And it appears our estate agent is not behaving reasonably, and is instructing the sellers from an...unusual position. 

Any help or advice much appreciated! 

Thanks 

H 

steve866

How long has it been on the market for? Is probate complete?

NameUnavailable

That does seem odd behaviour and very unprofessional.

You have 2 choices, stump up the cash and contine with the purchase or walk away. There's no right answer - the value may or may not be right but if you aim to live there for the forseeable future then it's likely to inrease over the next 5 or 10 years.

numbercruncher8

Remember, the estate agent doesn't work for you, and works for the other side.

IMO it is likely to be all an act. The error was to spend an hour on the phone with him. As an FTB he probably has the impression that if he is bombastic, you may mistake this for some extra knowledge. For another buyer, he probably would do something different.

Ultimately, the power in the transaction lies with whoever wants it least. If you draw a line in the sand at £562k and there are no other offers, what are the sellers going to do? After a while, the estate agent will be pleading with the sellers to accept your fantastic offer, and there will be no better offers coming. Given that no other bids have been mentioned, I reckon there may not be any. 

I wouldn't give the agent any more airtime than necessary, it only takes less than a minute to enter your instruction.

Of course you will be better placed to judge your local market as to whether the valuation is right, but the valuation is there to protect the bank and many of them are being cautious at the moment. 

Jonbvn

hollybbb said:

And it appears our estate agent is not behaving reasonably, and is instructing the sellers from an...unusual position. 

Firstly, the estate agent is not yours. They represent the sellers and will only consider their best interests.

Although it is difficult when you are emotionally invested in the property, I would call their bluff and consider walking away if they are not willing to negotiate.

hollybbb

steve866 said:

How long has it been on the market for? Is probate complete?

It was initially put on for £600,000 early April, dropped to £575,000 early July. Two sales fell through prior to us. One found a house they preferred. The other couldn't get their mortgage sorted in time. She now has and the EA is saying she would happily buy it at full price after losing it (could be nonsense, who knows). 
The probate is complete. Literally, we would be happily exchanging this week if the down valuation hadn't happened. But it's such a huge difference, and they are unwilling to budge at all. We don't want to buy a house at the start of a giant recession, wondering if we've made a giant financial mistake. 

Thrugelmir

The vendors pull the EA's strings. All the EA wishes to do is sell the property. As no sale equals no commission. 

Angela_D_3

£18,000 is nothing in the grand scheme of things.  I got pushed up £8,000 on a much cheaper house than yours.  It’s £9 a week over 10 years.  I spend more than that a day on fags and coffee.  

Comms69

hollybbb said:

Hi there,
I'm feeling slightly ill with stress at this point, and hoping to get a grasp on things. My partner and I are first-time buyers and have just had the house we're buying down valued by the mortgage provider. We offered the full asking price of £575,000 on a property we loved. We thought it was a great deal as it was initially on for £600,000, alongside the stamp duty holiday. However, when our mortgage came through, their valuer said it's only worth £557,000 - a difference of £18,000. 

The moment we told the estate agent, he erupted. Took it almost as a personal affront, and spent an hour essentially yelling at us and telling us the bank was wrong, the survey was unfair, and the valuer did a 'drive by' job which is 'ridiculous'. We put him in touch with our broker to try and see if we could come to a deal, and, instead, he just verbally abused our broker again. Apparently he kept saying "He has done big deals in his time" like some David Brent character, and then rang us back to tell us how awful our broker was and how "he wasn't doing us any favours." Our broker was totally bemused! 

We sought further professional advice which is that prices are expected to drop, and it would be very foolish to pay £18,000 over what a bank deems a property is worth. We are lucky in that we could just about afford the difference ourselves, but it would be a huge financial risk on our part. We entered a new offer this morning for £562,000, which is still £5000 over, which we thought was reasonable. But it's been rejected immediately. The estate agent still deems the bank's valuation to be wrong, and the sellers have said they will only continue with the sale if it's at £575,000. 

The survey has come back fine. We have everything in place to exchange and move. Also, the sellers aren't in a chain. They are selling the house after inheriting it when their mother died. We really don't want to lose the house, but also feel we would be crazy to pay so much over the odds. And it appears our estate agent is not behaving reasonably, and is instructing the sellers from an...unusual position. 

Any help or advice much appreciated! 

Thanks 

H 

"My/Our new offer is £562,000" - why you would speak to the agent for longer than 30 seconds is a mystery. 

He is NOT your agent. He does not have to behave reasonably. The sellers have a price in mind. You cant meet it, move on.

Tonyw193

Draw a line at your last offer. Two sales have fallen through prior, youve increased the offer. Do they really want to lose a 3rd? With no other offer on the table you're holding all the cards here. Also they will have to re-market ect. Youve still placed a very good offer. As said above the estate agent does not work for you they work for the seller. However, if your the only creditable offer on the table they may advise the seller to take your last offer. As the estate agent won't be getting a pay day. Dont be afraid to walk away. I think you're in a stronger position than you think. Theres also the potential case of house prices dropping this year, will the seller want to hang on forever only to get lower offers. 

greatcrested

Look- the poor guy's girlfriend/boyfriend has just left him (for someone who is not and estate agent!).

Someone pranged into his nice company mini this morning and (what a nerve!) is claiming it was his fault.

And the office was out of coffee when he finally got in to work.

His own fixed term mortgage has expired and he can't get a new deal so is now struggling to pay the standard variable rate.

He really really needs the commission from this sale to you and it's all got too much for him.

Have a heart!