Downvalued property - estate agent won't negotiate

theoretica

Percentage-wise, I paid nearly that over the valuation (2.7%, rather than your 3.2%).  I consider most of what I paid as the sensible buying into the property market and the extra as a premium I was happy to pay for living where I wanted to.

You have confirmed with the valuer that there isn't a typo?  Most of the valuations I have seen (admittedly a fairly small sample) have been a rounder number than 557.

AdrianC

hollybbb said:

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.

Or, to put it another way, a difference of just 3.1%. Easily within the margin of personal opinion.

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'.

The agent is an idiot.

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.

Such is their prerogative.
You now need to decide whether to proceed or not.

You don't say how much you'll be borrowing. Unless you're hard against the maximum they'll lend you for this property (85%? Viewed against their valuation), then there's no real functional change - they simply regard it as a higher LtV.

princeofpounds

hollybbb said:

Hi there,
I'm feeling slightly ill with stress at this point, and hoping to get a grasp on things. 

Start getting a grasp on thing by not treating yourself that way. It may not feel like it to an excited first time buyer, but there are thousands of houses out there. It is not worth getting sick over this kind of thing - it really isn't. 

The EA knows you are are a naive and romantic FTB and is just trying the bully tactic. You've spent hours with him on the phone, and hey, it's already paid off once when you raised your offer from what you could originally afford.

He may even be technically right to a degree - some valuation surveyors have been asked to be cautious by their clients, the mortgage lenders. But the market right now isn't that weak, partly because of the interest rate cut and partly because of postponed demand coming through after lockdown. But that doesn't help you borrow any more money.

The mortgage lenders don't care much about that - they are thinking about their overall levels of property risk and the money they are going to lend you for ~2-25 years.

[Deleted User]

theoretica said:i

Percentage-wise, I paid nearly that over the valuation (2.7%, rather than your 3.2%).  I consider most of what I paid as the sensible buying into the property market and the extra as a premium I was happy to pay for living where I wanted to.

You have confirmed with the valuer that there isn't a typo?  Most of the valuations I have seen (admittedly a fairly small sample) have been a rounder number than 557.

This does make sense 
a down value to £557k is an odd number 

If its true how about offering the standard cliche response “ lets meet in the middle “ so offer £ 566k and be prepared to walk away 

hollybbb

Densol said:

theoretica said:i

Percentage-wise, I paid nearly that over the valuation (2.7%, rather than your 3.2%).  I consider most of what I paid as the sensible buying into the property market and the extra as a premium I was happy to pay for living where I wanted to.

You have confirmed with the valuer that there isn't a typo?  Most of the valuations I have seen (admittedly a fairly small sample) have been a rounder number than 557.

This does make sense 
a down value to £557k is an odd number 

If its true how about offering the standard cliche response “ lets meet in the middle “ so offer £ 566k and be prepared to walk away 

We are double-checking now about the possibility of typo. That would be mildly hilarious if that was the case. If not, they've made it very clear they won't meet in the middle. The EA said that from the off, and warned us at the start of the sale they are very 'shrewd business people'. So we will have to decide if to, a) try and get an independent valuation, b) pay the full price and then worry about prices dropping a lot over the next 3 years, or, c) walk away, and try and find something we loved as much as this place. 

NameUnavailable

hollybbb said:

Densol said:

theoretica said:i

Percentage-wise, I paid nearly that over the valuation (2.7%, rather than your 3.2%).  I consider most of what I paid as the sensible buying into the property market and the extra as a premium I was happy to pay for living where I wanted to.

You have confirmed with the valuer that there isn't a typo?  Most of the valuations I have seen (admittedly a fairly small sample) have been a rounder number than 557.

This does make sense 
a down value to £557k is an odd number 

If its true how about offering the standard cliche response “ lets meet in the middle “ so offer £ 566k and be prepared to walk away 

We are double-checking now about the possibility of typo. That would be mildly hilarious if that was the case. If not, they've made it very clear they won't meet in the middle. The EA said that from the off, and warned us at the start of the sale they are very 'shrewd business people'. So we will have to decide if to, a) try and get an independent valuation, b) pay the full price and then worry about prices dropping a lot over the next 3 years, or, c) walk away, and try and find something we loved as much as this place. 

I'm not sure 'shrewd business people' would readily lost FTBs who are ready to go, survey done etc. without at least entering into negotiation with you. 

If prices start falling soon - which I personally think they will for a number of reasons - they'll be even less shrewd to continue paying out on an empty property hoping for a better offer to come along..........

I guess it should come down to a) can you afford to pay the original price and b) how much do you love the place to be happy to pay more than the surveyor thinks it's worth.

getmore4less

EA sussed you with you won't find a plse you love as much as this one.

You will find one just as good.

EA is on the 3rd failure 

princeofpounds

hollybbb said:

 If not, they've made it very clear they won't meet in the middle. The EA said that from the off, and warned us at the start of the sale they are very 'shrewd business people'. 

Well, maybe they will, maybe they won't. But in a negotiation with a vendor who seems very keen to maximise price, what do you expect them to say? They already know that you were willing to pay the higher amount - it's just a question of ability. They already know they have pushed you back up again. They aren't going to give an inch until it's clear you really are at your limit. Then they might concede, they might not. 

It's definitely not impossible, but it's a very rare vendor who wouldn't accept 98% of their asking price in the absence of other offers. Usually you price up a bit and would quite often accept 90%. When you realise that you are arguing over a 2% difference, maybe that puts the agent's manufactured bluster in perspective...

[Deleted User]

Well personally i'd be telling them that its £562,000 or nothing take it or leave it. 

But thats easy for me to say when i'm not the one with a potential house purchase to lose. 

It all comes down to 

How much do you want this house 
Would you be prepared to risk losing it 
What is the likelihood of finding another property as good as this 
Can you be bothered to go through the whole process again

You need to ask yourself these questions, then that should help you decide what to do next 

numbercruncher8

It's selling a house, not rocket science !!!!!!. Nothing to do with being shrewd at business.

Sorry, I think the most likely case is that he is all hot air and trying to intimidate you. The fact that he could rant to you for an hour on the phone, and you accepting the behaviour without calling him out...... the dynamic you have both mutually created is that he is in charge. I can bet he is telling the other side he is very confident of securing the full price.

TBH if shelling out the extra cash (if not covered by the mortgage) makes you uncomfortable, that's a pretty good sign to at least have a check at the local area and see what's available and where the property sits value-wise.