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

user1977

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?

Only if they actually pay it! An offer in principle is pretty meaningless. I could offer £1m for the OP's property, it doesn't make it suddenly worth £1m.

As explained above, surveyors rely mainly on completed purchases of comparable properties as evidence - so is there anything which backs up the £196k figure?

diggingdude

The criticism of FTBs is unfortunately a downside of a free internet forum. A lot of people forget when they knew nothing

GDB2222

TheJP said:

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.

The trouble is that the lender valuation at around £170k was predictable as a likely outcome. The estate agent should have assessed viability of the offers on that basis, and advised the sellers accordingly. 

As it was, I assume the agent advised on the buyers being proceedable, but made the mistake of doing so on the basis the lender would value at the agreed sale price. Then, given a range of offers that the agent presumably said were all proceedable, the sellers chose the highest one. 

[Deleted User]

newsgroupmonkey_ said:

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.

What you mean is that FTBs haven't yet been completely brainwashed by the utter insanity of the UK housing market, so won't automatically accept sub-standard rubbish. Eventually the awful reality of life here grinds them down, but it's a process they have to go through and you would rather not be the one to deliver the bad news.

TheJP

GDB2222 said:

TheJP said:

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.

The trouble is that the lender valuation at around £170k was predictable as a likely outcome. The estate agent should have assessed viability of the offers on that basis, and advised the sellers accordingly. 

As it was, I assume the agent advised on the buyers being proceedable, but made the mistake of doing so on the basis the lender would value at the agreed sale price. Then, given a range of offers that the agent presumably said were all proceedable, the sellers chose the highest one. 

I'm not sure if the OP has made public what they actually marketed the house at, I know that PB valued it at £170-180K. Again if the buyer gave the EA a DIP for £200k and had X deposit then that would satisfy the EAs screening. The EA cant for certain predict that the lender would value the property at £170k as it could have gone the other way and been valued more than what the OP accepted.

I don't know of any EA that would ask a buyer if they can make up the shortfall if the house was to be valued at X when they submit their first offer.

There is no blame in this situation just wrong outcomes, the OP was given a figure to market and accepted a higher offer and then used that figure for their onward purchase. Effectively the OP is doing what the buyers have done and that is offering on a property they cant afford.

newsgroupmonkey_

[Deleted User] said:

What you mean is that FTBs haven't yet been completely brainwashed by the utter insanity of the UK housing market, so won't automatically accept sub-standard rubbish. Eventually the awful reality of life here grinds them down, but it's a process they have to go through and you would rather not be the one to deliver the bad news.

Welcome to Adulting and what's known in the industry as "maintenance".
If you don't like it, buy a new build.

GDB2222

TheJP said:

GDB2222 said:

TheJP said:

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.

The trouble is that the lender valuation at around £170k was predictable as a likely outcome. The estate agent should have assessed viability of the offers on that basis, and advised the sellers accordingly. 

As it was, I assume the agent advised on the buyers being proceedable, but made the mistake of doing so on the basis the lender would value at the agreed sale price. Then, given a range of offers that the agent presumably said were all proceedable, the sellers chose the highest one. 

I'm not sure if the OP has made public what they actually marketed the house at, I know that PB valued it at £170-180K. Again if the buyer gave the EA a DIP for £200k and had X deposit then that would satisfy the EAs screening. The EA cant for certain predict that the lender would value the property at £170k as it could have gone the other way and been valued more than what the OP accepted.

I don't know of any EA that would ask a buyer if they can make up the shortfall if the house was to be valued at X when they submit their first offer.

There is no blame in this situation just wrong outcomes, the OP was given a figure to market and accepted a higher offer and then used that figure for their onward purchase. Effectively the OP is doing what the buyers have done and that is offering on a property they cant afford.

If the property market in the area is on fire, with rapidly rising prices, the estate agents must have had quite a few sales falling through in this way. You would think they would adjust the way they work to deal with that, as they only earn money when sales complete?

It's hardly rocket science for the estate agent to tell the seller that they've had a lot of sales fall through recently due to low valuations, and to recommend accepting Buyer X's offer because he has say £50k equity in the house he's selling or £50k in the bank.

TXC

If the property market in the area is on fire, with rapidly rising prices, the estate agents must have had quite a few sales falling through in this way. You would think they would adjust the way they work to deal with that, as they only earn money when sales complete?

It's hardly rocket science for the estate agent to tell the seller that they've had a lot of sales fall through recently due to low valuations, and to recommend accepting Buyer X's offer because he has say £50k equity in the house he's selling or £50k in the bank.

I've had three estate agents tell me now that down valuations have been the biggest challenge throughout all this madness, increased their fallen through sales tenfold. I've never sold - is it EAs or Vendors who have the final say on marketed price?

Skiddaw1

As it happens, our previous two house moves both took place in a buyer's market. In retrospect, whilst we may not have maxed out in terms of selling price, it was SO much easier to find a buyer able to proceed as well as for us to view plenty of in-budget houses. I feel desperately sorry for anyone trying to buy or sell currently, especially FTBs.

Ramouth

Skiddaw1 said:

As it happens, our previous two house moves both took place in a buyer's market. In retrospect, whilst we may not have maxed out in terms of selling price, it was SO much easier to find a buyer able to proceed as well as for us to view plenty of in-budget houses. I feel desperately sorry for anyone trying to buy or sell currently, especially FTBs.

Me too.  Must be really hard for people at the limit of affordability.  All the uncertainty makes a stressful process even more stressful.  Let’s hope things start to settle down a bit this year and the market gets back to normal.