We've been down-valued by more than anyone expected. What can we do?

[Deleted User]

Ksw3 said:

We've been offering over with a 30% deposit but have been outbid on every single one. Not a single house has come back to market. If we stuck to the asking price we would have even less hope of securing a house in this market. 

Sadly this is all you can do as an FTB now. With the discrimination against FTBs and going up against cash buyers, the only way to get a look in is to offer way above asking, in the knowledge that the bank will value it much lower and you can then negotiate the real price.

The only hope is that the vendor accepts the bank's valuation and decides to continue with you, rather than going back to one of the other offers.

It's insane but people need somewhere to live and are desperate.

aoleks

One belief keeps coming back in dozens of threads: that as a FTBer, you don’t have money.

As a FTBer, I will pay what I want to pay, even if I’m able to get more. Your status as a buyer says nothing about your deposit or about how much you want to stretch your finances.

From where the stupid advice to ignore FTBers and sell to someone with cash or equity?

When did FTBers become these parasites you keep describing?

lookstraightahead

aoleks said:

One belief keeps coming back in dozens of threads: that as a FTBer, you don’t have money.

As a FTBer, I will pay what I want to pay, even if I’m able to get more. Your status as a buyer says nothing about your deposit or about how much you want to stretch your finances.

From where the stupid advice to ignore FTBers and sell to someone with cash or equity?

When did FTBers become these parasites you keep describing?

Absolutely agree with this. I am definitely not a FTB but have sold to FTB as they have no chain, I also think they are happy to wait for lords of manor vendors to decide their next step, unlike me, who needs a vendor out ASAP.

Mahsroh

I've only scan read the whole thread so apologies if i'm going back over old ground but this goes back to exactly what I said on another thread on Saturday.

The problem with the market at the moment is that to secure a property people almost have to offer over the asking price. We bought last year and based on scanning Rightmove and getting e-mail updates from the Estate Agents etc. I would say that at least 50% of properties we viewed that went under offer quickly ended up back on the market within a matter of weeks. I suspect the majority of these were either a result of buyers remorse or "down-valuations" during the conveyancing process. 

On my BTL that I sold to fund our purchase I had two offers on the table and went for the lower offer which was a cash buyer, partly because we'd found our onward purchase and needed to move quickly after a previous buyer pulled out, but also because I knew that the lower price was a more realistic valuation that couldn't be down-valued because there was no lender. 

diggingdude

I haven't had a chance to go through the thread, but my view is usually that the valuation protects myself and the bank as purchasers.  Estate agents tell you what you want to hear.  As a buyer, if the valuation valued at £170k i really would want to pay over value.  I had this on a flat i was looking at. I loved the flat but two in the same block were going for approx £15k less with pretty much the same views etc. I won't pay for someone else's dreams.

Sorry if that sounds harsh.  I do hope you sell

GDB2222

aoleks said:

One belief keeps coming back in dozens of threads: that as a FTBer, you don’t have money.

As a FTBer, I will pay what I want to pay, even if I’m able to get more. Your status as a buyer says nothing about your deposit or about how much you want to stretch your finances.

From where the stupid advice to ignore FTBers and sell to someone with cash or equity?

When did FTBers become these parasites you keep describing?

The advice I have actually seen on this thread is to check that your buyers have the means to complete the purchase. Of course, it does not matter whether that’s from equity in their current property, or savings, or bank of mum and dad. Normally, the estate agent should do that, but they seem to have slipped up here. It’s been assumed, rightly or wrongly, that the most likely source is equity. 

In this case, the op commented that their buyers are really nice people, which is a bonus, but not nearly as good as them having lots of dosh, given that a valuation below the offer price was entirely foreseeable. 

newsgroupmonkey_

aoleks said:

When did FTBers become these parasites you keep describing?

I'm not sure I'd call them parasites - indeed, we were all FTBers.

But generally, FTBers do only have a set amount of deposit. They can't afford to overpay by 10% for the "perfect forever home".

Don't forget, some people's idea of a forever home might be a 2 up 2 down terrace in a run-down city area. We're not all millionaires.

We're shortly going to be on the market. If a property comes up that we really want and it's £!0k over valuation, we'd still consider it as we have plenty of equity already. 2 years ago, it would have been a different prospect as someone returning to the market after 13 years.

The other thing about FTBers (if you're new to this particular forum) is the questions and demands.

Asking for Electricity and Gas certs. Asking for rising damp to be fixed or asking 10% off. Wanting an older property, but expecting it to be in the same state as a new build then asking for money off.

Once we put ours on the market, if a FTBer offers. we'll be making it absolutely clear that they are buying a 50 year old house that comes with no guarantees. They pay the price they offer or pull out. We won't be negotiating. We know our house will sell quickly if they pull out.

lucypilates

user1977 said:

What evidence do you have that it's worth £196k? £170k is after all in line with what your EA's valued it at, which I presume was with the benefit of their research.

Surely a property is worth what someone is willing to pay for it? The market constantly ebbs and flows and there is no ‘set price’ … if someone wanted to pay £250k for it and has the funds, there is nothing stopping them from doing just that … 

TheJP

GDB2222 said:

aoleks said:

One belief keeps coming back in dozens of threads: that as a FTBer, you don’t have money.

As a FTBer, I will pay what I want to pay, even if I’m able to get more. Your status as a buyer says nothing about your deposit or about how much you want to stretch your finances.

From where the stupid advice to ignore FTBers and sell to someone with cash or equity?

When did FTBers become these parasites you keep describing?

The advice I have actually seen on this thread is to check that your buyers have the means to complete the purchase. Of course, it does not matter whether that’s from equity in their current property, or savings, or bank of mum and dad. Normally, the estate agent should do that, but they seem to have slipped up here. It’s been assumed, rightly or wrongly, that the most likely source is equity. 

In this case, the op commented that their buyers are really nice people, which is a bonus, but not nearly as good as them having lots of dosh, given that a valuation below the offer price was entirely foreseeable. 

I think from the sound of it they do have the means (mortgage DIP) as they wouldn't have offered what they did if they didn't think that the lender would authorise that much. The issue is the bank will only take the risk on £170k as that's what they value the property at. If the bank valued it at £196K then they would proceed.

Mahsroh

lucypilates said:

user1977 said:

What evidence do you have that it's worth £196k? £170k is after all in line with what your EA's valued it at, which I presume was with the benefit of their research.

Surely a property is worth what someone is willing to pay for it? The market constantly ebbs and flows and there is no ‘set price’ … if someone wanted to pay £250k for it and has the funds, there is nothing stopping them from doing just that … 

Agree with the sentiment but the problem is more often than not they don't have the funds, because they're relying a lender (which is the case in point here) and that's when the premise of a property being worth "what someone is willing to pay for it" becomes null and void.