Help! Property valued 50k less than offer!!

hellomoto123

Hi everyone

New here, just wanted to know if any of you had similar experience.
I made an offer on a property which was advertised £425k , there was 6 offers and we were selected by the vendors, we offered 428k.
However we had a valuation back from the lender and homevuyers report, he said the place is only worth 375k. He said 2 semi detached homes on the same road sold at around 390k last year. The property we are buying is terraced which needs lots of work and he reckons around 25k worth of work.

We really like the property and its the 4th home we put an offer on. Do we walk away, 50k is alot for the vendor to accept losing. Would you accept losing 50k for your property?  The property tried to sell 2 years ago, but didn't sell due to subsidence which she fixed and has certificates for.

moneysavinghero

Offer 25k less. The valuation is the value to the mortgage company, the value to you would usually be higher. If it's not then maybe another house would be more suitable.

What happened to the other 3 houses?

NinjaTune

I doubt the vendor will accept 50k less especially if the other offers were at/close to asking price.

It does sound as if it's overpriced based on recent sales and the work that needs doing. 

Is it end or mid terrace?  End terrace would probably put it on an equal footing to a semi but not if it's a mid terrace.  Is the garden a lot bigger than the semis?  Does it have off road parking that the semis don't have?  Is it a larger property than the semis?  What is it about this house that makes the vendor think it's worth so much more?

steampowered

The vendor doesn't have to accept a reduction at all. Why would they accept such a big a reduction if they had 6 other offers.

They might accept a smaller reduction - but then you would still be paying more than the surveyor reckons the property is worth, so the question is what the property is worth TO YOU.

However, you can walk away if you don't think the property is good value. You might have no choice if you cannot afford a deposit based on the lender's valuation.

It is worth doing your due diligence to look at the properties that sold for £390k last year and to work out if there is any good reason why they are worth less than the property you are buying. Valuations by lenders are often quick and dirty jobs so are not always accurate.

AdrianC

You thought it was worth £425k. What changed?

Do you have enough equity that you can still afford to purchase with the LtV of your mortgage based on £375k?

917700

I will try another lender. If the valuation is still that low. Find something else. 

parkingadvice1212

917700 said:

I will try another lender. If the valuation is still that low. Find something else. 

What if the other lender uses the same surveyor?

cattie

I'd not touch a house that had had previous subsidance problems & I speak from experience. I bought a house that had suffered such remedial work a couple of years previously & spent a lot of money bringing it up to date. When I came to sell about 4.5yrs later,  I had plenty of viewers, but the S word scared off a lot of potential buyers & the result was I ended up selling the house for the price I'd originally bought it for.  Without the subsidance history I could have sold for at least £55k more.

If you take on this house, you'll find, like the current owner, that it won't be easy to sell as either it ends up scaring buyers off because of it's history, or it's downvalued because of it. It makes no difference if vendor has the certificates to state property is now fine, the fact is the S word can make a house much harder to sell.

caprikid1

Over valued based on other properties with no subsidence history ?, that were semi's and yours is a terrace ?  Run...... your surveyor is right....

hellomoto123

moneysavinghero said:

Offer 25k less. The valuation is the value to the mortgage company, the value to you would usually be higher. If it's not then maybe another house would be more suitable.

What happened to the other 3 houses?

Thanks, the 3 others we couldn't get a mortgage on the 1st one because it was 'inhabitable"
The 2nd one had a huge crack which was valued at 0 
The 3rd one, the vendor said she will accept our offer if we add an extra 2k which we did and she accepted. 3 weeks later she said she, made a decision too quickly and wants an extra 5k... horrible buying experience so far....

hellomoto123

NinjaTune said:

I doubt the vendor will accept 50k less especially if the other offers were at/close to asking price.

It does sound as if it's overpriced based on recent sales and the work that needs doing. 

Is it end or mid terrace?  End terrace would probably put it on an equal footing to a semi but not if it's a mid terrace.  Is the garden a lot bigger than the semis?  Does it have off road parking that the semis don't have?  Is it a larger property than the semis?  What is it about this house that makes the vendor think it's worth so much more?

Trying to not hold my breath, but staying hopeful as it didn't sell 2 years ago. Yes its a mid terrace, no off road parking and smaller than the semi's.
I reckon the estate agents overpriced it. In saying that it was on the market for the same price 2 years ago.

AdrianC said:

You thought it was worth £425k. What changed?

Do you have enough equity that you can still afford to purchase with the LtV of your mortgage based on £375k?

Yes, whats changed is we won't be able to get the mortgage due to the low valuation and then potentially end up in negative equity