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

TheJP

Love the polar opposite views

No request for notes, that's just how desperate they were for us to sell to them.

Of course... it didn't work out because we lost our onward purchase and have now just accepted a new £20k over asking offer from a different buyer who also wrote us a lovely note about why they wanted us to accept their offer!

If they are a mortgage buyer as well wont this just be another down valuation scenario? I get what people are saying regarding buyers honouring their offer, they would if the bank would lend on that amount (even though they can afford that amount). If the OP is going to accept offers over the valuation they may need to hold out for a cash buyer that isn't fazed about a down valuation.

ccbrowning

If multiple people are offering over the asking, surely it’s not over valued? Its worth what people will pay. 

TheJP

ccbrowning said:

If multiple people are offering over the asking, surely it’s not over valued? Its worth what people will pay. 

Not in the eyes of the risk taker (the lender), if all the offers are from mortgage buyers then the OP is unlikely to get the price people are willing to pay. 

Noneforit999

Demand in certain areas is driving up sale prices.

We listed ours on Wednesday evening, by Friday morning we had 13 viewings booked in for next Saturday. EA said he had a list of London folk looking to buy in this area. We have HS1 4 miles away and it’s 33 minutes to St Pancras

Ours is only 7 years old and move in ready. He said offers over £350k and reckons it’s likely to go for £360k-£375k easily. There are no recent similar sales in this area to compare to but Zoopla estimates £343k-£374k.

I’m rather hoping it doesn’t get down valued come valuation time. Looking in Rightmove, there are two similar properties for sale, one at £350k and one at £370k but neither have a garage and driveway like ours does, rather they have allocated spaces.

Not much I can do as the seller if the demand is there other than accept an offer and see what happens.  Surely if it gets downvalued and the buyer cannot make up the difference it means relisting which costs the EA money and time plus delays his fee coming in??

Snookie12cat

Gavin83 said:

Your buyers chose to offer over asking. They knew what the house was worth, should have expected the house to be down valued from this and therefore have had the funds available. The tactics they’re pulling are immoral.

In your shoes there’s absolutely no way I’d sell to them unless they met the original offer. I’d be re-marketing the property, regardless of other circumstances. It is of course your choice though.

A piece of advice for the future. Don’t choose your buyer based on how nice they are. Choose those who have the funds available to back up the offer they’ve made. That generally means no FTBs if the offer is over asking.

I think you give them to much credit. A lot of FTBs just want the house they found and don't really understand the ins and outs of valuation etc. To call them immortal is a bit much. 

lookstraightahead

ccbrowning said:

If multiple people are offering over the asking, surely it’s not over valued? Its worth what people will pay. 

It's not their risk / money. It's the lender's.

The only people who can afford to pay over are those who are using their own cash to fill the hole. Which narrows the options. 

It's no different from a game of monopoly. Except only the buyer and vendor are playing.

lookstraightahead

eidand said:

Gavin83 said:

TXC said:

Gavin83 said:

lookstraightahead said:

 Gavin83 said:

Your buyers chose to offer over asking. They knew what the house was worth, should have expected the house to be down valued from this and therefore have had the funds available. The tactics they’re pulling are immoral.

In your shoes there’s absolutely no way I’d sell to them unless they met the original offer. I’d be re-marketing the property, regardless of other circumstances. It is of course your choice though.

A piece of advice for the future. Don’t choose your buyer based on how nice they are. Choose those who have the funds available to back up the offer they’ve made. That generally means no FTBs if the offer is over asking.

Why do you assume people with equity will pay over valuation?

Usually they don't want to chuck their money away either. 

What you're advising is trying to find gullible desperate people who have loads of money to waste. That's an oxymoron. 

I don’t expect buyers to do anything other than honour their offers. If they’re choosing to offer over the asking price they should fully accept they’re overpaying for the property and that’s the choice they’re making. What you shouldn’t do is over offer to get accepted knowing full well you’re gonna reduce it in the future. It wastes the time and money of everyone in the chain, including the buyers themselves.

If you don’t want to overpay (which is a completely reasonable stance) then don’t offer over the asking price.

I really don’t understand the opinion that it’s the sellers fault for accepting the offer either. Why would you turn down money if someone is willing to pay it?

Its the buyers fault. Don’t blame the seller for taking someone at their word.

But this isnt a case of the buyers not following through on their offer - they are not saying "we wont pay this anymore even though we can" - as I said above if the bank had been able to facilitate their purchase I have no doubt the buyers would have proceeded as they likely held an AIP for their 196k offer

The buyers were almost certainly upfront about requiring a mortgage to complete their purchase and their offer being dependent on the bank playing ball. 

The seller, knowing that the mortgage is required for these buyers, should have taken anything above and beyond the asking price as "a bonus" (by their own admission 'every bit of advice out there tells you to expect a downvaluation") 

With all due respect if the buyers had an extra 26 grand floating about in cash I doubt theyd be buying a 2 bed, theyd be increasing their deposit for a 3 bed.

I very much doubt they said this. They likely made the offer and possibly added some spiel about why they were the best buyers. No one makes an offer and says “If the lenders don’t agree we’ll be down valuing”.

EAs don’t generally pluck their housing values out of thin air. They generally don’t undervalue. Certainly no one buys a house expecting the bank to value it at more than the EA does.

If it’s on the market for say £180k you should expect the bank to value it at £180k or less. If you then choose to offer £200k you should do so expecting this down valuation and therefore should be prepared to cover the rest out of your own pocket. If you can’t afford to do this or you don’t want to then don’t offer over asking. It’s really that simple.

Or am I wrong and people really believe the banks will agree with their over asking offer? I’m really not sure people are that naive but maybe I’m being generous.

That's what i said as well.We see people here all the time in this situations, offering over and then coming here to cry how the bank down-valued to what the original price was. 

If you can't cover the over price you yourself offered ( and no one forced you to ) then don't offer over asking.
Don't blame the vendor, blame yourself for not having any kind of financial sense and go buy red boots instead.

I do agree with this, which is why as a vendor I would look closely at the buyers situation rather than just taking the most money. A buyer with no financial sense seems to be a vendors buyer of choice as the vendor just sees £££

user1977

TheJP said:

Love the polar opposite views

No request for notes, that's just how desperate they were for us to sell to them.

Of course... it didn't work out because we lost our onward purchase and have now just accepted a new £20k over asking offer from a different buyer who also wrote us a lovely note about why they wanted us to accept their offer!

If they are a mortgage buyer as well wont this just be another down valuation scenario? I get what people are saying regarding buyers honouring their offer, they would if the bank would lend on that amount (even though they can afford that amount). If the OP is going to accept offers over the valuation they may need to hold out for a cash buyer that isn't fazed about a down valuation.

It doesn't need to be a cash buyer, just somebody with enough cash to fill any gap between valuation and the price. Lots of people in that sort of market will be buying with a mortgage, but are less likely than the average FTB to be surprised by a downvaluation or to lack the necessary cash to make up the difference.

BornTooHula

I'd agree with others that, if multiple people are offering over asking, it seems to be the value of the property is in fact that hight

lookstraightahead

BornTooHula said:

I'd agree with others that, if multiple people are offering over asking, it seems to be the value of the property is in fact that hight

But the people with the money don't agree (the bank).

Interest rates are so low at the moment it's almost free money by the banks, so they need to be cautious. 

I could easily give away someone else's money.