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

KDuffy

Hi everyone and happy new year.

We're currently in the throes of selling our property (and buying another). Everything was smooth thus far. We had our 2-bed property valued by Purple Bricks at 170-180k.

This was fair enough considering surrounding area pricing although obviously we would have prefferred the top end of that... and that's what we got!

We had 5 offers in one day- all OVER budget by quite a margin. Eventually we settled on some first time buyers we liked- their offer was a wonderful £196k. We were elated that the couple we preferred had put in a competitive offer with the others (we even had an offer higher still), but we took it with a grain of salt. Every bit of advice out there tells you to expect a down-value and so we did. We looked into our next house on the basis that we might lose some of this profit.

Anyway fast forward almost 2 months and the buyers had a homebuyers survey performed by their lender. The house is in great repair and has new roofing, a new bathroom etc, no problems with the property itself- but the surveyor 'looked into other sales around the area' and concluded that our house was worth £170k. Quite a down-value and very disheartening for all involved.

So with this in mind, we're wondering what we could do- appeal it? Gently push the buyers to get a second opinion from a different lender? Try to negotiate the difference with our next purchase to prevent a delay in their chain? Is it possible to shop around for our own valuation on our property and present that to the buyer's lender?

Any help greatly appreciated... It wasn't too stressful until it was!

Thanks,

princeofpounds

The valuation is performed by the surveyor on behalf of the mortgage lender who was chosen by the buyers, so those are the relevant parties, not you. You do not 'shop around' for a general valuation. It is the responsibility of the buyers to appeal their downvaluation (that almost never works), get a different lender with a different opinion, or come up with the equity required to get the transaction through.  

Of course if you really want to progress the sale, you can always cut your price and try to negotiate up along the chain. But I doubt you would want to cut it that much.

Give them a day or two to see if they can find the cash to bridge the gap. Then go back to your agents and ask them to enquire about the status of one of the other leading offers. See if there is someone who is not looking for a large mortgage or purchasing with cash.

KDuffy

Ah ok thanks, this is good advice enquiring further still up the chain. I thought it might be beneficial/ a possibility to somehow 'prove' that our house is worth the offer, but I guess it's not up to us at all.

The buyer's lender told them they can try a second opinion, but it'll be the same result (of course they would say that) so I'm hoping they don't necessarily believe that outright- this is why I feel the need to gently nudge them somehow.

Cheers,

comeandgo

One of the reasons I would never go with FTB.  It’s very unlikely they have the cash to make up the difference.

user1977

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.

lookstraightahead

Hi op

it has actually been valued at what it was valued at by purple bricks.

Most people (not just first time buyers) cannot make up the cash difference, probably yourself included.

Remember it's the risk to the lender that is the important thing here. They will have their own criteria, lots is often to do with floor space, and definitely not new bathrooms etc (which might draw more offers, but doesn't increase the value from a lenders perspective, the new buyer might rip it out).

What have the buyers said? Have they asked for a reduction yet?

KDuffy

We're mostly in the aftermath of this, so far it's a 'we all have lots to think about' situation. They have indeed expressed that they won't have the funds to make it up and we've mentioned that it puts a lot of strain on our purchase too.

I'm pinning a lot of hope on them either getting a second lender to survey or us possibly reducing the sale of our next purchase.

What is the process of appeal? Apparently the surveyor got in touch with PB and asked about the various offers we had on the house- prsumably to further judge worth. 

The trouble is our area has a couple of properties in a similar range to the £190k, but SOLD properties are lower, albeit months passed now.

Surely they should take into account the ridiculous price rising we've had recently?

babyblade41

I honestly don't think you have much hope of getting a better valuation.

If the FTB's can't make the shortfall you will either have to reduce your offer on your onward sale or open it back to offers to previous interested parties, but they will encounter the same problem.

The initial valuation was right and surveyors valuation is the same so I'm not sure you would get a different outcome 

GDB2222

If I were a totally cynical FTB, in a red hot area, but without a lot of money, I might do the same as your buyers.

I'd offer what it takes to get my foot in the door, and then once you are committed to your onward purchase I'd be in a good position to screw you down and get the property for what it's actually worth - or less, perhaps.

All the OP can do is acquiesce in that process, or remarket the property. Even then, there are no guarantees of doing better.

Snookie12cat

KDuffy said:

We're mostly in the aftermath of this, so far it's a 'we all have lots to think about' situation. They have indeed expressed that they won't have the funds to make it up and we've mentioned that it puts a lot of strain on our purchase too.

I'm pinning a lot of hope on them either getting a second lender to survey or us possibly reducing the sale of our next purchase.

What is the process of appeal? Apparently the surveyor got in touch with PB and asked about the various offers we had on the house- prsumably to further judge worth. 

The trouble is our area has a couple of properties in a similar range to the £190k, but SOLD properties are lower, albeit months passed now.

Surely they should take into account the ridiculous price rising we've had recently?

What they go SSTC for and what they actually get valued at are very different. If the surveyor thinks it's £170, you might get another going slightly higher but you will not be getting £198k. 

KDuffy

GDB2222 said:

If I were a totally cynical FTB, in a red hot area, but without a lot of money, I might do the same as your buyers.

I'd offer what it takes to get my foot in the door, and then once you are committed to your onward purchase I'd be in a good position to screw you down and get the property for what it's actually worth - or less, perhaps.

All the OP can do is acquiesce in that process, or remarket the property. Even then, there are no guarantees of doing better.

This has crossed my mind, but it feels like a mighty risk doesnt it? You either end up eating your words and actually paying what you unintentionally offered, or end up being rejected by messing around the sellers? 

Most of our viewers were exhausted from shopping around and just wanted to settle on a house, is what we gathered.