Down valuation - what next?

AdrianC

Deleted User said:

hazyjo said:

It's unlikely they actually rejected it (unless there's a major prob and they gave it a zero valuation), more likely the buyers didn't want to, or couldn't, make up the shortfall.

How much under is it? What percentage?

It’s 5%

So let's say we're talking about a £200k property.

The lender will view the LtV as being at £190k value instead of £200k.

If the borrowers want a £175k mortgage, they'll see that as 92% instead of 87.5%.

That's a problem if the most they will lend is 90%... The borrowers would need to inject enough equity to bring the borrowing down to £171k max.

Perhaps they can raise another £2k - and you could drop the price £2k?

[Deleted User]

lookstraightahead said:

The problem you have with your onward move will be the same as your purchasers are probs oh having - can't make up the shortfall. 

Are you sure your buyers can't get a mortgage at all, or is it just that they can only get a mortgage with regards to the actual valuation? 

If the latter, could you negotiate a reduction on your onwards purchase.

I know this isn't helpful at this stage  but this seems to be happening a lot. People panic buy because of the current climate and then can't get their multiples. Has the house you're buying been valued and are you paying over asking/valuation? 

We managed to purchase ours for over 6% less than asking price and it was later valued at exactly the amount we’re paying so I don’t think our seller will entertain a reduction.

[Deleted User]

AdrianC said:

Deleted User said:

hazyjo said:

It's unlikely they actually rejected it (unless there's a major prob and they gave it a zero valuation), more likely the buyers didn't want to, or couldn't, make up the shortfall.

How much under is it? What percentage?

It’s 5%

So let's say we're talking about a £200k property.

The lender will view the LtV as being at £190k value instead of £200k.

If the borrowers want a £175k mortgage, they'll see that as 92% instead of 87.5%.

That's a problem if the most they will lend is 90%... The borrowers would need to inject enough equity to bring the borrowing down to £171k max.

Perhaps they can raise another £2k - and you could drop the price £2k?

Sadly it’s a much larger amount, and they can’t increase their deposit at all. 

I can’t help but feel it’s a major mistake by the estate agents. I’ve trusted their marketing advice, and it clearly hasn’t paid off! 

Flugelhorn

Deleted User said:

lookstraightahead said:

The problem you have with your onward move will be the same as your purchasers are probs oh having - can't make up the shortfall. 

Are you sure your buyers can't get a mortgage at all, or is it just that they can only get a mortgage with regards to the actual valuation? 

If the latter, could you negotiate a reduction on your onwards purchase.

I know this isn't helpful at this stage  but this seems to be happening a lot. People panic buy because of the current climate and then can't get their multiples. Has the house you're buying been valued and are you paying over asking/valuation? 

We managed to purchase ours for over 6% less than asking price and it was later valued at exactly the amount we’re paying so I don’t think our seller will entertain a reduction.

I don't think I have ever seen a property valued at more than the price agreed 

Crashy_Time

Deleted User said:

I’ve found out today that the lender for my buyers has down valued my property and hence rejected their application.

My EA is insisting we continue with the current buyers and allow them time to apply again with another lender. They appear to be hopeful that we will achieve the desired valuation next time around. However I am not convinced…

I was already prepared to re-market as I had lost patience with them already (as they have already taken 3 months getting to this stage) so I think it’s best I go ahead and re-market? 

If the current buyers manage to get a mortgage great, 
If a new buyer comes along then also great! 

I’m just a bit unsure as to why my EA would be against re-marketing? 

Because he knows it will be another "down-valuation" is my bet, best to just accept the new value and take offers at that level IMO.

Crashy_Time

Deleted User said:

Gentoo365 said:

Or drop the price

It’s not an option without backing out of our onward purchase. 

hazyjo said:

lookstraightahead said:

The next valuation will likely be the same, so if you want the same amount you will need a buyer who has spare cash to make up the shortfall.

Exactly. It's unlikely they actually rejected it (unless there's a major prob and they gave it a zero valuation), more likely the buyers didn't want to, or couldn't, make up the shortfall.

How much under is it? What percentage?

It’s 5%

Try reducing your own offer?

Irishpearce26

Flugelhorn said:

Deleted User said:

lookstraightahead said:

The problem you have with your onward move will be the same as your purchasers are probs oh having - can't make up the shortfall. 

Are you sure your buyers can't get a mortgage at all, or is it just that they can only get a mortgage with regards to the actual valuation? 

If the latter, could you negotiate a reduction on your onwards purchase.

I know this isn't helpful at this stage  but this seems to be happening a lot. People panic buy because of the current climate and then can't get their multiples. Has the house you're buying been valued and are you paying over asking/valuation? 

We managed to purchase ours for over 6% less than asking price and it was later valued at exactly the amount we’re paying so I don’t think our seller will entertain a reduction.

I don't think I have ever seen a property valued at more than the price agreed 

Think you've read that wrong. The OP is paying 6% below asking and the valuation came in at what they are paying. So its valued 6% lower than asking price.

Crashy_Time

I thought it was 5%?

[Deleted User]

The home I am selling has been down valued by 5% 

The home I am purchasing was valued at exactly the price I am paying, which is 6% less than the asking price. 

Flugelhorn

Irishpearce26 said:

Flugelhorn said:

Deleted User said:

lookstraightahead said:

The problem you have with your onward move will be the same as your purchasers are probs oh having - can't make up the shortfall. 

Are you sure your buyers can't get a mortgage at all, or is it just that they can only get a mortgage with regards to the actual valuation? 

If the latter, could you negotiate a reduction on your onwards purchase.

I know this isn't helpful at this stage  but this seems to be happening a lot. People panic buy because of the current climate and then can't get their multiples. Has the house you're buying been valued and are you paying over asking/valuation? 

We managed to purchase ours for over 6% less than asking price and it was later valued at exactly the amount we’re paying so I don’t think our seller will entertain a reduction.

I don't think I have ever seen a property valued at more than the price agreed 

Think you've read that wrong. The OP is paying 6% below asking and the valuation came in at what they are paying. So its valued 6% lower than asking price.

LOL no - what I mean is I would expect it to be valued at the price they have offered or below, it wouldn't be valued at more - the OP thought that the vendors wouldn't reduce it because the valuer had agreed with the price they had offered