Mortgage valued house lower than agreed price - what to do next?

Crashy_Time

What is PropertyLog saying about general seller sentiment in the area? 

nimbo

The property I am buying was undervalued. Next door sold for more next year the first bank
would not reconsider. 

I went to their lender. They made me jump through burning hoops but they will lend to me. 😁😁

Wes121708

We had the same happen, first lender valued it 25k less than what we offered (which was under asking). We went with a different lender and they valued it at what we offered. I didn't cost us any extra so it was worth giving it a try. 

Crashy_Time

Is there a link to the property?

[Deleted User]

The lender my buyers originally applied with gave a down valuation on the property, but they reapplied through a different lender and different company came to value it and valued it at the same price we’d sold for. 

pretamang

The first lender I went with valued the property 15% lower than our offer price.

Tried another lender and they valued it at the full asking price.

It was a gamble as many lenders use the same valuers so it could have come back the same (or lower).

It's very unlikely that a lender will change the mind, even if presented with evidence (they will have already looked at similar prices locally) - how confident are you of the price compared to similar properties nearby? sold prices only, not asking prices

lookstraightahead

Why do buyers see it as a 'win' when a second lender values the property higher? 

Ok so buyers might really 'want' the house but doesn't it sit a bit awkwardly, especially when the market will probably (or might) slow down and interest rates rise. Paying more interest on a loan that those buyers have personally made bigger.

It all seems a bit wrong way around. 

"please, vendor, let me try and give you more money for your house - sit tight I will do all the hard work as well"

Crashy_Time

Wes121708 said:

We had the same happen, first lender valued it 25k less than what we offered (which was under asking). We went with a different lender and they valued it at what we offered. I didn't cost us any extra so it was worth giving it a try. 

How long ago was that?

jay213

lookstraightahead said:

Why do buyers see it as a 'win' when a second lender values the property higher? 

Ok so buyers might really 'want' the house but doesn't it sit a bit awkwardly, especially when the market will probably (or might) slow down and interest rates rise. Paying more interest on a loan that those buyers have personally made bigger.

It all seems a bit wrong way around. 

"please, vendor, let me try and give you more money for your house - sit tight I will do all the hard work as well"

This is what I also think when reading these threads.  It's a win to borrow more, pay more for something that has been valued at a lower price.

[Deleted User]

lookstraightahead said:

Why do buyers see it as a 'win' when a second lender values the property higher? 

Ok so buyers might really 'want' the house but doesn't it sit a bit awkwardly, especially when the market will probably (or might) slow down and interest rates rise. Paying more interest on a loan that those buyers have personally made bigger.

It all seems a bit wrong way around. 

"please, vendor, let me try and give you more money for your house - sit tight I will do all the hard work as well"

Not at all. Professional valuations are not gospel. You make an offer based on what you think its worth, probably in competition with other buyers offering similar. Market dictates value.

I actually think some people put too much hope in a down valuation, as a green light to renegotiate. Try if you must, might work in some scanarios. But if this thread shows anything,  its that the vendor should refuse and its the buyers affair to raise finance (which might well be forthcoming with a different valuer).