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

BikingBud

Mark_Michalowski said:

My sister thinks I should go to the vendor of the house I'm buying (for £155k - the rest of the money from selling mine will clear my mortgage. Or rather, at the moment, won't now clear my mortgage) and just tell him that I can only offer £150k because of my buyers; but I've said no (to her... almost anger!! LOL) because that doesn't feel fair. It's not his fault, it's between me and my buyer. I have no idea what his financial situation is, and whether £5k is a lot or a little to him. And if I do it, then I'm little better than my buyers.

Mxx

So you also have a choice.

Do you want to be mortgage free or live in the house you appear to have set your mind/heart on. Is it really that you can't afford it or would prefer to be clear.

From your other post there appears to be a number of areas of concern with the house you are selling perhaps time to reconsider your overall position and decide what's really important to you.

BikingBud

Mark_Michalowski said:

Gavin83 said

"However if you’re asking me whether it’s wrong for buyer to over offer, knowing full well they’ll never be able to pay it and hoping the vendor will have no choice but to agree to a reduction then my answer is yes, it’s wrong."

Yes, this.

Naivety or ignorance are (partial) excuses, but to do it in the full knowledge of what will happen... that's wrong.

Mxx

The potential buyer is as entitled to get a deal that works for them as you are. If you feel that they are being devious or dishonest then don't deal with them.

Move on and start again.

Gavin83

Mark_Michalowski said:

Yes, Gavin83, with hindsight, I should have done.

But there were no cash-buyers at the time (apart from a couple that offered very low bids), and any of the others would have had to go through with being downvalued, too. I guess one of them might have enough in the bank to be able to make up the downfall, but we'd only have their word for that, until the downvaluation happened,and then I'd be in the same boat as I am now. I guess if they're told that this is the very thing that's led to the sale falling through, they'd be less likely to do it themselves...

I wonder if you can get them to "legally" state that they can afford the purchase, even with a downvalue...? I'm guessing not, otherwise that'd be the done thing, wouldn't it?

Mxx

You can certainly get a buyer to prove their finances and therefore whether they can cope with a down valuation. However there is no obligation for them to pay the extra, even if they can.

Mark_Michalowski

Nope, you're right, there isn't. But if they've given you written evidence that a downvaluation won't be a problem, and the moment the downvaluation happens and they start claiming "Oh, there's a problem!", you know to start looking at alternative sellers instantly.

Mxx

SR24

Have you checked out the actual sold prices for any comparable property that has sold in the last 12 months?

The actual price recorded from land registry data. Whilst these are some months behind you can see values for those that have gone through up to around Oct 2021 via Right Move for example.

Whilst the price a vendor and a buyer agree on for a property is subject to so many personal choices of what someone is happy to sell for/buy for, the actual prices will be useful as they are factual about a property that has sold.

Although it is a market with low stock and lots of buyers some properties are not actually being sold for the marketed price, or even the best and final over bids. Some of this will be due to down valuations and or other negotiations after the initial offer agreed and prior to completion.

Whilst this might be an over simplification of the process, I would do some research and give yourself some factual information on sold prices, it may help inform any decisions.

😊

TheJP

Any chance @KDuffy updating the thread? The suspense is agonising. 

Thrugelmir

SR24 said:

Have you checked out the actual sold prices for any comparable property that has sold in the last 12 months?

LR data lags. The surveyor will have rung other EA's to obtain comparables and have their fingers on the pulse of the local market. 

HotPantsCruiser

Gavin83 said:

Mark_Michalowski said:

Yes, Gavin83, with hindsight, I should have done.

But there were no cash-buyers at the time (apart from a couple that offered very low bids), and any of the others would have had to go through with being downvalued, too. I guess one of them might have enough in the bank to be able to make up the downfall, but we'd only have their word for that, until the downvaluation happened,and then I'd be in the same boat as I am now. I guess if they're told that this is the very thing that's led to the sale falling through, they'd be less likely to do it themselves...

I wonder if you can get them to "legally" state that they can afford the purchase, even with a downvalue...? I'm guessing not, otherwise that'd be the done thing, wouldn't it?

Mxx

You can certainly get a buyer to prove their finances and therefore whether they can cope with a down valuation. However there is no obligation for them to pay the extra, even if they can.

And you might annoy them and possibly drive them away by asking them to "prove" their finances?

Noneforit999

We have just accepted an offer which was £30k above the 'offers over' price.

They have a 15% deposit and are remortgaging their current home with a BTL mortgage and taking £80k of equity out of it for the deposit and other fees etc.

EA made it clear it could be down valued but he said looking at other recent sales around us, he could dispute the valuation for us if it went down more than £15k below what the buyers offered. 

Now the 10000 solicitor forms and the waiting game, 

GDB2222

Noneforit999 said:

We have just accepted an offer which was £30k above the 'offers over' price.

They have a 15% deposit and are remortgaging their current home with a BTL mortgage and taking £80k of equity out of it for the deposit and other fees etc.

EA made it clear it could be down valued but he said looking at other recent sales around us, he could dispute the valuation for us if it went down more than £15k below what the buyers offered. 

Now the 10000 solicitor forms and the waiting game, 

Contrast your way of assessing your buyers with the OP:   "Eventually we settled on some first time buyers we liked "