Mortgage valuation back and downvalued by 50k... yes 50k

firstbuyer

Title says it all really, after a little cry (the journey just to get here has been a long winded process) I need to put my sensible hat on.

We did our research, we do not feel like we overpayed in comparison to other properties in the area. Never been in this situation before, but we do not have 50k laying around to put in and get to what we need!

I have absolutely no idea what to do, how could I go back to the vendor and ask for a 50k reduction as it's not been valued at full price? Like, I know I'd tell my seller to sling their hooks and remarket as it's a lot of money . Has anyone been in this situation with a significant downvalue?

What are the best next steps forward? I've asked for a call back from my broker and the EA.


EA Marketing price 425-450
Accepted Offer 440
Valuation 390

SpiderLegs

Well you don’t have 50k to make up the difference so how much do you have?

Then do you want to pay over the valuation? 

I wouldn’t.

Worth a punt back at 390 but I wouldn’t count on it so best to prepare for moving on to other options.  

london21

The EA have either over valued the house or the bank has massively undervalued.
If its the EA/seller then negotiate with them.
If its the bank then perhaps try a different lender.

You can use the valuation to renegotiate. Nothing to lose by asking.

If the seller does not accept the lower valuation price and you do not have the extra cash to cover the shortfall, you will either have to look for another property or try another lender.

Personally if they do not accept the valuation price and no extra funds, will look for another property.

Does the property need a lot of work? Have you checked properties within the same area and see what they are going for, recent sold prices etc.

Thrugelmir

Discussion with the EA required. More info on recently agreed sales in the locality. Was this purely a lenders valuation or did you receive a copy of the report? 

[Deleted User]

If you try a new lender then at least it looks like you are trying to find a solution. If that lender also comes back with the same figure then you are in a stronger negotiating position.  

There are only a handful of valuation companies in the country working for all the lenders.  If you have a record of a recent downval at one of those companies then a new buyer is likely to have the same issue (as the valuer will just search internal records) so everyone is more likely to try find a solution

firstbuyer

Deleted_User said:

If you try a new lender then at least it looks like you are trying to find a solution. If that lender also comes back with the same figure then you are in a stronger negotiating position.  

There are only a handful of valuation companies in the country working for all the lenders.  If you have a record of a recent downval at one of those companies then a new buyer is likely to have the same issue (as the valuer will just search internal records) so everyone is more likely to try find a solution

We don't want to apply elsewhere due to ERC fees (we were porting with NatWest) and my husbands credit history - broker suggested NatWest was currently our best option and I'm putting faith in them.

If they ask us to try elsewhere unfortunately my response will be no - which I know sounds bratty haha but I need to stick to my truth on that point.

firstbuyer

Thrugelmir said:

Discussion with the EA required. More info on recently agreed sales in the locality. Was this purely a lenders valuation or did you receive a copy of the report? 

I asked NatWest for a copy of the report. Of course most of it is gibberish to me, but broker advised there aren't enough comparables for them to feel comfortable lending 440 opposed to 390.

In my OP when I say there are comparables for us, we were looking at the local area and what a 4 bed / 2 bed sold for to make our mind up for a 3bed 440 was where we were comfortable going to.

Would be kinda handy to have these valuations upfront, is that something I can do if we're now in a position to look elswhere?

firstbuyer

london21 said:

The EA have either over valued the house or the bank has massively undervalued.
If its the EA/seller then negotiate with them.
If its the bank then perhaps try a different lender.

You can use the valuation to renegotiate. Nothing to lose by asking.

If the seller does not accept the lower valuation price and you do not have the extra cash to cover the shortfall, you will either have to look for another property or try another lender.

Personally if they do not accept the valuation price and no extra funds, will look for another property.

Does the property need a lot of work? Have you checked properties within the same area and see what they are going for, recent sold prices etc.

Have sent the full report to my EA. Stated facts and tried to keep emotion out of it! Told them i'll leave it in his hands with the vendor.

No, property doesn't need work at all. Rennovated to a very high standard hence why we were happy to go for the 440

firstbuyer

SpiderLegs said:

Well you don’t have 50k to make up the difference so how much do you have?

Then do you want to pay over the valuation? 

I wouldn’t.

Worth a punt back at 390 but I wouldn’t count on it so best to prepare for moving on to other options.  

I haven't gone back at 390 but have sent EA the val and put it in their court. We could maybe do 400 and make up 10k from savings and live without fancy new things for a few years - which would be crap!

Definitely not counting on the 390, I do know that the seller has already purchased and is living in a new proprty and wants this one sold ASAP... I'm hoping we have that on our side? No idea

bmthmark

I would not budge from £390k. That's what its been valued at, the current vendor is clearly trying to get you to pay over the odds.
What you have to remember is that you don't want to putting  yourself in a position where if you need to sell in the  next few months you are £50k in negative equity. I know its very unlikely you would sell that quick, but you just don't know.
If I were you and they refuse to sell for the recommended price, I would find another property.

ACG

firstbuyer said:

Deleted_User said:

If you try a new lender then at least it looks like you are trying to find a solution. If that lender also comes back with the same figure then you are in a stronger negotiating position.  

There are only a handful of valuation companies in the country working for all the lenders.  If you have a record of a recent downval at one of those companies then a new buyer is likely to have the same issue (as the valuer will just search internal records) so everyone is more likely to try find a solution

We don't want to apply elsewhere due to ERC fees (we were porting with NatWest) and my husbands credit history - broker suggested NatWest was currently our best option and I'm putting faith in them.

If they ask us to try elsewhere unfortunately my response will be no - which I know sounds bratty haha but I need to stick to my truth on that point.

I do not been this to sound as blunt or as rude as it probably will but...
That sounds like a you problem. 

I would 100% suggest the same as JMA says. Going back and asking for £50k reduction is probably not going to work as you say. You can try and meet in the middle but even £25k is a big drop and the vendor would still likely relist. 

There will be other buyers not wanting to limit themselves to Natwest. Its not their fault you are tied into a deal. 

You either need to suck up the ERCs, find a happy medium or find a new property - I have never had an appeal on property value overturned. You are asking the surveyor to admit they were wrong and the amount of data they have to look at now a days is crazy.