Selling; but worried the mortgage valuation won't cover the bidding price.

JamesA123

Trying to sell our house, it's done really well and we accepted an offer of just over 170K, we live in a northern city, close to the city centre in a 3 bed house. The property was originally on for 150K, but we're being warned by the estate agent, that the offers won't hold as the mortgage company won't value it sufficiently. Our buyer has about a 170 mortgage and 21K deposit. The problem is houses in our general area are selling for  170-ish, but nothing on our street has sold over high 140's, although recently a pretty ordinary house sold for about that recently. We've done a significant amount of work on ours (~50K) though.  Our solicitor charges in stages and I don't want to get halfway through the conveyancing with them expecting us to cover the shortfall or it falls through. We've another bidder with similar mortgage and deposits, but we declined this week. I'm just wondering what to do, I've looked at sites like rightmove to estimate the value for the area and zoopla to estimate the price for our house, but those values are wildly divergent. We're not  in a chain, and can wait, although that would be far from ideal and I think the buyer could find more money.  I think they've only applied for a 10% mortgage, but a 95% would be a possibility. What should my strategy be?

MaryNB

You could ask if the buyer will be willing to proceed with that price if the valuation comes in below their offer (only if their revised LTV is acceptable to a lender of course). I mean obviously if they say yes they can still drop the price later but might still be worth asking so you can get a better idea of the risk. Some buyers may be happy to proceed because they're keen to secure the property (at £20k over they seem very keen). Others may panic if they feel they are paying too much or may not be willing to pay a higher interest rate due to a change in LTV. Maybe they didn't think of the risk of downvaluations when they bid.

Not really much else you can do. Their lender's surveyor will value as they see fit. If it is downvalued you could check if the buyer is willing to try another lender in the hope the second lender's surveyor provides a high valuation.

comeandgo

Don’t sell to FTB who may not have the cash behind them to make up the shortfall.

anselld

Strategy should be to be prepared to sell for what it was worth which was clearly £150k when you started marketing.  Anything above that would be a bonus.

lookstraightahead

Yes it will probably be valued at less than your buyer is willing to pay, because it's the banks money not the buyers.
it's a risk you are taking if you accept an offer over what the house is worth.
This is happening a lot with over excited / nervous buyers and over optimistic vendors. 

If the buyers do have a large deposit they would now most probably have to pay a higher interest rate as well.

Why did you negotiate higher when everyone viewing would most probably have £150k in mind?

if it comes back as less you can just accept less.

Octothorpe

We worried too but our house passed bank valuation of 15% more than highest sold price on the street. 

I wouldn't worry until you need to 😊

Redwino222

I was very clear that if my buyer had an affordability problem it was theirs not mine.

I took a lower bid because the couple were proceedable and claimed to have a good deposit.  

Luckily the valuation was fine but they way I looked at they bid over asking price to secure the house - that is for them to honour.  I also turned down an offer from someone with a small deposit. 

lookstraightahead

Redwino222 said:

I was very clear that if my buyer had an affordability problem it was theirs not mine.

I took a lower bid because the coils were proceedable and claimed to have a good deposit.  

Luckily the valuation was fine but they way I looked at they bid over asking price to secure the house - that is for them to honour.  I also turned down an offer from someone with a small deposit. 

Some good points here - especially the last bit.

GDB2222

Cheer up. The weather is lovely. It’s a fine summer day. There’s nothing you can do about the buyer's mortgage valuation, so don’t worry about it.

Gavin83

So if the buyer can’t find more money what will you do?

If they get a down valuation, try and be negotiate the price and then hold firm in your shoes I’d pull out and re-list the property but that’s a decision only you can make.

If you do go down the above route don’t make the same mistake again. If someone offers over the asking price only entertain the offer if they’ve got the money to back it up. Someone just about scraping by on a 10% deposit is not that person.

Crashy_Time

comeandgo said:

Don’t sell to FTB who may not have the cash behind them to make up the shortfall.

Why would anyone want to pay over the bank`s valuation for a house?