Advice for renegotiating following down valuation (FTB)

Noneforit999

If the vendor is keen to sell, they might meet in the middle. 

All you can do is ask.

In reality, down valuations are more common at the moment due to people offering over asking.

Chloe27895

In the end, we negotiated a bit but much closer to the offer price rather than in the middle. We're managing to make it work... Hopefully everything will go smoothly now 🤞

mdcooper88

Chloe27895 said:

I would be grateful for advice on how to go about renegotiating on our house purchase. We are first time buyers and had applied for 90% LTV

The mortgage valuation came back yesterday evening as 4-5% lower than our offer, back to the houses original asking price. The lender has offered the maximum they would lend based on the valuation and the option of a 95% LTV with a higher rate if needed but this rate would be significantly worse obviously

Our first option is we want to renegotiate the purchase price with the vendor, I'd be grateful for any advice on how to approach this. 

Coincidentally, we have just received our own survey report, which does contain a fair few moderate problems to fix in the next year or so - e.g. fascias and gutter repair, exterior door replacements, a window replacement, rotten door frame in garage etc etc which I could use as leverage if needed

The vendor is selling his rental property with no chain so I have hopes he may be more able to renegotiate that someone with a chain and needing a very specific amount for the own property purchase

How would you begin the conversation?

Thanks

Completely understand where you are coming from, we lost out on a property that we offered 22k over the asking price and we were told it sold for significantly more.

Some of the comments on this forum are very unhelpful and in my opinion they don't understand at all what the market is like at the moment in some areas, unfortunately you either offer over the asking price or you will never find anywhere at all and to through heartache constantly. 

What you think the property is worth is irrelevant in my opinion, as it is only worth what someone is prepared to pay for it, and in this climate people are prepared to pay well above what others think it is worth (the house we wanted had 27 viewings and over 11 offers, so try and compete with that?) 

We have just offered, 10% over the asking price and secured a property, we felt it was still a fair price but we were prepared for a down valuation, thankfully the surveyor agreed with what we paid so we are fine. 

As usual the market is basically suited to people that have a lot of cash that can afford to pay a lot more for somewhere and basically get over the down valuation if one comes, people that are only putting down 10% are in a very difficult position and you either have a choice or taking the chance and then losing it or not buying at all. It's a shame that this is what it has come to. 

Thrugelmir

People who are paying over the odds to secure a property using borrowed money. May well regret their decision once interest rates start to rise. Mortgage lenders have a far better feel for the market than buyers whose hearts are ruling their heads. Who get swept away with emotion. Buying a property is little different to applying for a job. There'll be multiple interested parties only one of whom is going to suceed. The rest continue simply their search. 

Pleased to hear you finally struck a deal. Life is all about gaining experience and being wiser the next time. 

Chloe27895

mdcooper88 said:

Chloe27895 said:

I would be grateful for advice on how to go about renegotiating on our house purchase. We are first time buyers and had applied for 90% LTV

The mortgage valuation came back yesterday evening as 4-5% lower than our offer, back to the houses original asking price. The lender has offered the maximum they would lend based on the valuation and the option of a 95% LTV with a higher rate if needed but this rate would be significantly worse obviously

Our first option is we want to renegotiate the purchase price with the vendor, I'd be grateful for any advice on how to approach this. 

Coincidentally, we have just received our own survey report, which does contain a fair few moderate problems to fix in the next year or so - e.g. fascias and gutter repair, exterior door replacements, a window replacement, rotten door frame in garage etc etc which I could use as leverage if needed

The vendor is selling his rental property with no chain so I have hopes he may be more able to renegotiate that someone with a chain and needing a very specific amount for the own property purchase

How would you begin the conversation?

Thanks

Completely understand where you are coming from, we lost out on a property that we offered 22k over the asking price and we were told it sold for significantly more.

Some of the comments on this forum are very unhelpful and in my opinion they don't understand at all what the market is like at the moment in some areas, unfortunately you either offer over the asking price or you will never find anywhere at all and to through heartache constantly. 

What you think the property is worth is irrelevant in my opinion, as it is only worth what someone is prepared to pay for it, and in this climate people are prepared to pay well above what others think it is worth (the house we wanted had 27 viewings and over 11 offers, so try and compete with that?) 

We have just offered, 10% over the asking price and secured a property, we felt it was still a fair price but we were prepared for a down valuation, thankfully the surveyor agreed with what we paid so we are fine. 

As usual the market is basically suited to people that have a lot of cash that can afford to pay a lot more for somewhere and basically get over the down valuation if one comes, people that are only putting down 10% are in a very difficult position and you either have a choice or taking the chance and then losing it or not buying at all. It's a shame that this is what it has come to. 

Thank you. And congratulations on your offer being accepted and securing your mortgage offer! It's very tricky indeed, you're blamed if you offer over and it's downvalued as you are deemed foolish to offer highly. But you are also blamed if you are searching for ages because you are told you aren't offering enough and need to accept that it's a seller's market.

I think we've definitely learnt that first time buyers need a much bigger deposit/savings account than you are usually told!

Chloe27895

Thrugelmir said:

People who are paying over the odds to secure a property using borrowed money. May well regret their decision once interest rates start to rise. Mortgage lenders have a far better feel for the market than buyers whose hearts are ruling their heads. Who get swept away with emotion. Buying a property is little different to applying for a job. There'll be multiple interested parties only one of whom is going to suceed. The rest continue simply their search. 

Pleased to hear you finally struck a deal. Life is all about gaining experience and being wiser the next time. 

Yes I do agree. You live and you learn!
We may be paying a little over the current valuation, but the house needs many improvements and we are confident it will rise in value.

The mortgage is very affordable for us (less than our current rent) and we are very excited to be investing our money into property rather than paying out rent, even if the bank will take a lot of it!

Unfortunately the housing market at the moment means most people simply must offer over the current valuation to secure a house. Unless you look at less desirable areas, but we made the choice on location to suit our needs weighing up these things.