Property ‘undervalued’ by 15k... is it fair to ask to meet in the middle?

Rachylou1981

The house we were going to buy was downvalued by 40K. We didn't have that extra cash to put in to buy it nor did we feel that was a good plan. We tried to negotiate with vendors as we were tied in to our lender so had to pay a fee & wanted that fee off the house so if they allowed it then we could try another lender. They refused so we pulled out. They sold again in days. Intrigued to see if it sells for original price

thriftytracey

Surely now "the stamp duty madness" no longer applies.  Anyone offering now or in the early stages of conveyancing are highly unlikely to meet the June deadline.

moneysavinghero

thriftytracey said:

Surely now "the stamp duty madness" no longer applies.  Anyone offering now or in the early stages of conveyancing are highly unlikely to meet the June deadline.

Madness by it's very definition is not rational.

jodiepoke

Thanks for all the advice.

it’s been valued 10k below asking price so again not much from both our and the sellers point of view. 

We are reluctant to make up the full amount because is our eyes we can put that money towards a more expensive property, if that’s also valued at asking price.

We have a FTB buying our property so a minimal chain whereas other people would have 2/3 in the chain for the price of property we are going for.

We will wait to see what the appeal comes back with and go from there.

Mutton_Geoff

jodiepoke said:

Thanks for all the advice.

it’s been valued 10k below asking price so again not much from both our and the sellers point of view. 

We are reluctant to make up the full amount because is our eyes we can put that money towards a more expensive property, if that’s also valued at asking price.

We have a FTB buying our property so a minimal chain whereas other people would have 2/3 in the chain for the price of property we are going for.

We will wait to see what the appeal comes back with and go from there.

Don't forget that bank valuations are figures that can be expected in a fire sale if you default on the loan. The chances of the amount being revised under appeal is negligible. The agent is wasting your time even thinking this process will work.

When you buy a house, part of your due diligence is gathering information about what the house is worth to you, including input from neutral bodies like the bank valuers. Until now the price has been a finger in the air between the agent and vendor, you chose to offer on that basis. How does it stand with comparables?

To think it's been incorrectly priced like a tin of beans on a supermarket shelf is not how the housing market works. It's purely supply and demand and a few weeks ago you were happy to offer that price, now you're not. If I was the vendor, I'd remarket to other buyers particularly now you chose to set a benchmark.

I've just withdrawn an offer on a place after a second viewing. My offer had not been accepted even though I'd done my homework and felt the place was overpriced (it's been on the market since late last year in a very buoyant part of the country). The vendor and agent had hoped the second viewing would cause me to up my offer, it had the opposite effect, I saw stuff I hadn't noticed on the first viewing and I withdrew my offer altogether as I know what that house is worth to me and the asking price it wasn't.

This forum is full of threads titled "undervalued" when really they should say "overbid". The agent works for the vendor and is employed to maximise the sale price of the property on their books.

GDB2222

davidmcn said:

If it's a rising market then the prices are going to be higher than the valuations (which are largely based on prices agreed at least months ago), so you're not necessarily paying "over the odds".

But this might be a temporary spike in prices, which amounts to the same as paying over the odds. Hard to tell.

Missmarple

The quickest and easiest way is to tell the seller through your solicitor that it was valued lower. If they put it back on the market the same may happen again to them. If they have a list of possible buyers and someone is a cash buyer they will be able to pay what they want for the property. 
Just do it now and find out, the appeal by the estate agent is useless, don't waste your time. 

lookstraightahead

[Deleted User] said:

lookstraightahead said:

[Deleted User] said:

Getting_greyer said:

[Deleted User] said:

Getting_greyer said:

It's not like you're amending your offer because of some trifling matter about the colour of the bathroom.  Wouldn't other valuations come back as roughly the same? Remember they'd have to start again from scratch with a new buyer if not paying cash.  I'd offer the valuation first before deciding wether it's worth topping up....unless you already know it is worth it.

The valuation of a lender is not the absolute value of a property. A different lender may value it more or less. The parents recently had lenders who came in 10% apart. Another buyer could be in cash, not relying on lending at all. I think its rather wishful thinking to reduce the offer because you couldn't arrange the finance.

Yes those are mostly fair comments.  This is all relevant on the actual offer agreed and amount % of ltv, but for me, if I had made an offer and the bank came back with a substantially lower valuation, I would have a serious think about whether to keep to my original offer regardless of whether I had the extra cash in place or not.  So congratulations on your last sentence which I'm sure you thought was a sweet burn, but not really relevant.

Not intending  to put down anyone down. Just a straightforward observation that if you outbid everyone, then the vendor will in my view have less inclination to re-open negotiations. 

Or be more cautious and sensible next time about expectations.

In the name of caution, I assume there is only so much the estate agent can do to identify that someone who has outbid others is going to flake.

Yes agreed, but going over the asking price when most people view houses that are at their limit with a small deposit doesn't bode well. It's all about risk with the buyer, rather than value of the house. I've just put 45% down on a house which isn't stretching us (as the property is smaller than most would find acceptable, not because we're loaded) and the "valuation" was done in minutes. People who have a small deposit should look more cheaply, and sellers shouldn't be greedy. 

davidmcn

GDB2222 said:

davidmcn said:

If it's a rising market then the prices are going to be higher than the valuations (which are largely based on prices agreed at least months ago), so you're not necessarily paying "over the odds".

But this might be a temporary spike in prices, which amounts to the same as paying over the odds. Hard to tell.

Sure. We don't know what the range of other offers was. But if everybody else was also offering "over the odds" then it suggests that currently the market is confident enough of it not being merely a temporary blip. Just pointing out that valuations are based on completions from at least a few months ago, which may mean prices agreed a year ago.

Crashy_Time

livetoclimb said:

[Deleted User] said:

Getting_greyer said:

It's not like you're amending your offer because of some trifling matter about the colour of the bathroom.  Wouldn't other valuations come back as roughly the same? Remember they'd have to start again from scratch with a new buyer if not paying cash.  I'd offer the valuation first before deciding wether it's worth topping up....unless you already know it is worth it.

The valuation of a lender is not the absolute value of a property. A different lender may value it more or less. The parents recently had lenders who came in 10% apart. Another buyer could be in cash, not relying on lending at all. I think its rather wishful thinking to reduce the offer because you couldn't arrange the finance.

We had a 48k ‘down valuation’ earlier this year. We were able to negotiate the price down significantly. Whilst I appreciate we were lucky (and it was likely somewhat overvalued against the local market, but it’s unique and we love it) the worst anyone can say is no. 

48k, excellent!