Mortgage valuation has come back less than our offer, how to approach it?

AC78

Crashy_Time said:

AdrianC said:

All valuations are just an individual's opinion.

The vendor asked an EA for their opinion on the value.
Between them, they came up with a figure they agreed on, and put it on the ad. That figure was £680k.
You viewed the property, and came up with a figure you liked. £660k. The vendor agreed on that figure with you, and the offer was accepted.
Now your lender has asked a surveyor for their opinion of a good lender-security value. They've come up with £620k.

Three different numbers, three different purposes. And, yes, there's £60k between them... But if you work on the agreed offer price, they're only -6% to +3%.

~5% isn't a bad margin for variation, is it?

Without a link we can`t tell, but I`m thinking the house was bought for well South of 600k not that long ago?

Yes, you're right, 5 years ago, 537k. 

hannah021

AC78 said:

hannah021 said:

I wouldnt have instructed a surveyor, 60k is a lot of money even if it looks small in %

your bank said 620, take it up with the EA to reduce the price or leave.

what would you do if your surveyor says 660?

I guess this is the conundrum right, they could value it higher than the lender has, there is more peace of mind/feeling of being slightly less exposed if that was to happen. 
I booked my surveyor as there was a fairly long waiting time at that moment, but i am can cancel without losing any money, should i choose to do that.
Lots of sound advice on here, I will speak to the vendor, need to decide whether to just do it after my own survey comes back. 

i would speak to the vendor first, asap, and who knows, realising they might have over valued the property make them think again, and come to the table again, and if you still need the surveyor for other reasons (e.g. they wouldnt budge) then it is already booked.

frogglet

We sold a house owned by a few family members.  Had it valued by 3 estate agents, two gave a similar estimate one gave a value 25k more.
One family member insisted it went up for that price so we did but engaged one of the other estate agents.
 Low and behold the buyers surveyor valued it online with other properties  at  what the two agencies had estimated.
We renegotiated to a realistic price.
The estate agent puts the house for sale at whatever you tell them to.
The estate agent will have a good idea about a realistic price.

peterhjohnson

The lender's valuer might be "wrong" but communicate the value to the vendor via the EA. They might cave in straight away. If not, have your surveyor value it and go from there.

Crashy_Time

AC78 said:

Crashy_Time said:

AdrianC said:

All valuations are just an individual's opinion.

The vendor asked an EA for their opinion on the value.
Between them, they came up with a figure they agreed on, and put it on the ad. That figure was £680k.
You viewed the property, and came up with a figure you liked. £660k. The vendor agreed on that figure with you, and the offer was accepted.
Now your lender has asked a surveyor for their opinion of a good lender-security value. They've come up with £620k.

Three different numbers, three different purposes. And, yes, there's £60k between them... But if you work on the agreed offer price, they're only -6% to +3%.

~5% isn't a bad margin for variation, is it?

Without a link we can`t tell, but I`m thinking the house was bought for well South of 600k not that long ago?

Yes, you're right, 5 years ago, 537k. 

IMO that makes todays asking price, in a pandemic/recession absolutely bonkers! Offering anything above 600k on this will lose the OP money I think.

Crashy_Time

peterhjohnson said:

The lender's valuer might be "wrong" but communicate the value to the vendor via the EA. They might cave in straight away. If not, have your surveyor value it and go from there.

Good advice.