First Time Buyer - is it meant to be this hard!?

FedUpFirstTimeBuyer24

getmore4less said:

That first one sound like quite a bit could have been seen during viewing.

Get someone with experience to have a look at place you think you like a lot.

Look for cheaper places.

My partner’s dad is a builder and looked with us but unfortunately it was all newly renovated and very high quality finish so we were blind to it during viewing sadly. It was only when the surveyor had access to the loft and roof space that we found the major issues. Minor things we could have fixed ourselves but there was a lot uncovered

FedUpFirstTimeBuyer24

[Deleted User] said:

Sadly this is normal for the UK. Most houses here are badly built and maintained, so the survey will very often turn up major faults.

Prices are stupid too so down valuations are normal. They hurt FTBs the worst because that group are the least likely to have tens of thousands of pounds lying around.

I thought this might be the case 😞 hoping we get a lucky break soon! 

Also with the market being so high and having nothing to sell we are hit by this too. Worried about getting into negative equity too! 

FedUpFirstTimeBuyer24

K_S said:

@FedUpFirstTimeBuyer24 All I would say is don't spend any money on searches or a survey until you have a mortgage offer in hand. With most mainstream lenders offering free vals (and allowing you to add any lender product fee to the loan as opposed) for purchase apps, at least you can get to that stage cost-free.

Thank you! Sorry for sounding stupid but is that the agreement in principle? We had this but it was on the final valuation it fell short. Luckily the surveyor felt pity on us and refunded the survey money which was so unexpected.

FedUpFirstTimeBuyer24

RS2OOO said:

Problem is when there's someone else offering above valuation and the vendor goes with them rather then drops the price.

The viscous circle continues until such a time either the price has to drop or someone else has a big enough deposit that the down valuation is absorbed into the LTV.

We would have been happy to pay a little bit more into the deposit but 30k was just too much. They weren’t willing to negotiate at all sadly. We then found they’d put it back on the market at 3K less which seems cheeky!

yksi

I'd probably suggest going smaller/further/uglier. This will mean borrowing far less than the max you can afford. So that if it happens again, you can just shrug and say: well, the bank valued it £15k under what we offered, but that's no biggie, we've got enough in our savings to still reach 10% and go ahead.

As others have noted, it is hard right now even to get onto the ladder. You are taking a risk, in that you might be right and values might fall soon. But you're also taking the risk that prices might rise soon and make it even hard for you to get in. Remember, nearly all the major banks got it completely and utterly wrong for 2019 when prices shot through the roof.

FedUpFirstTimeBuyer24

TCPIP_Fox said:

The whole chain I'm in has been downvalued and people I know their chain got downvalued, too.  Yeah the media is making it sound like prices are going up, but lenders are saying the opposite.  The good thing is, if the property is down valued, you can ask the seller to re-negotiate and save a good chunk of money.

With covid and everything else that is happening, it is a bit of a mess.  But, my advice would be if the lender downvalues the property, ask the seller if they'll accept the valued price don't pull out straight away.  I saved 8K because of the down valuation and the top of the chain in my purchase got down valued by 40K and they had to take it on the chin. 

Thank you for replying! 

Sadly they refused to negotiate but then put it back on the market at 3k less than we were offering. Since it was a battle to negotiate with them anyway this seems a bit of a low blow…
I guess they just want the most they can get for it but it’s disheartening.

I just don’t know what is best to do now. Wait or keep looking! 

FedUpFirstTimeBuyer24

yksi said:

I'd probably suggest going smaller/further/uglier. This will mean borrowing far less than the max you can afford. So that if it happens again, you can just shrug and say: well, the bank valued it £15k under what we offered, but that's no biggie, we've got enough in our savings to still reach 10% and go ahead.

As others have noted, it is hard right now even to get onto the ladder. You are taking a risk, in that you might be right and values might fall soon. But you're also taking the risk that prices might rise soon and make it even hard for you to get in. Remember, nearly all the major banks got it completely and utterly wrong for 2019 when prices shot through the roof.

This is great advise thank you. With my partner’s dad being a ex builder and retiring next month, we are up for a bit of a renovation project. I guess it’s just waiting for the property with the right potential to come to the market.. 

both houses we put offers in for were top end budget but didn’t need renovation. Maybe this is where we are going wrong! 

I guess it’s a risk but hopefully if we are at least on the housing chain it will be successful regardless. Who knows! 

Thank you 

Ramouth

I’d second the smaller, further, uglier sentiment.  I would look particularly for something with a poor layout that you can improve - a lot of people can’t see beyond what is already there and it is amazing what moving walls or stairs can do.  Especially when you have a builder in the family!  Post plans on here and you will get some great suggestions of things to do.

comeandgo

Why are you scared of negative equity?  The only time a house value has any bearing is when you are buying or selling and if it’s your dream house then surely it’s where you will be staying for years.  

Mahsroh

FedUpFirstTimeBuyer24 said:

K_S said:

@FedUpFirstTimeBuyer24 All I would say is don't spend any money on searches or a survey until you have a mortgage offer in hand. With most mainstream lenders offering free vals (and allowing you to add any lender product fee to the loan as opposed) for purchase apps, at least you can get to that stage cost-free.

Thank you! Sorry for sounding stupid but is that the agreement in principle? We had this but it was on the final valuation it fell short. Luckily the surveyor felt pity on us and refunded the survey money which was so unexpected.

No, not agreement in principle. Wait until you have your FULL Mortgage offer.

Going back to the original post I wouldn’t work on the assumption that undervaluations mean prices will start falling this year. They might of course, but the problem with under valuations has been commonplace for the last year due to the general sharp rise in asking prices, but house prices have still continued to rise steadily so far.