Enormous down valuation

Confuzed1

Hello!

We're trying to buy a house and our offer has been accepted by the seller. We had already negotiated a lower offer as we thought the price too steep. We've just had the lender's valuation back and they've valued it at £80,000 lower than the accepted offer (20% lower). 

This seems a huge difference in price. We could still continue with the sale, but are now worried that the house has been hugely overvalued by the seller. The examples I've found online all have a much lower gap than this, around the 10% figure.

Should I try to renegotiate again with the seller? Although we technically could still buy it, I now feel we would be overpaying by a long way and would be taking out the maximum loan unnecessarily when the property isn't worth the offer price. 

Advice gratefully received 

dimbo61

Yes

Tell them the valuation and explain that you can't afford to pay 20% ( £80,000) more than the Bank valuation.
See what the vendors come back with.
I wrote down the £80,000 just to make it crystal clear how much over the top the asking price was.
Is it that special ?
Thinking Castle here with 1000 acres of land and your own River/Loch !

ACG

Was a physical valuation done or a desktop valuation? 
I did one earlier in the year where the property had an extension and had been done up. The only recent comparable properties to sell did not have the extension or the work done. So there was a clear reason for the difference in values, but a computer did not take that into account. 

K_S

Confuzed1 said:

Hello!

We're trying to buy a house and our offer has been accepted by the seller. We had already negotiated a lower offer as we thought the price too steep. We've just had the lender's valuation back and they've valued it at £80,000 lower than the accepted offer (20% lower). 

This seems a huge difference in price. We could still continue with the sale, but are now worried that the house has been hugely overvalued by the seller. The examples I've found online all have a much lower gap than this, around the 10% figure.

Should I try to renegotiate again with the seller? Although we technically could still buy it, I now feel we would be overpaying by a long way and would be taking out the maximum loan unnecessarily when the property isn't worth the offer price. 

Advice gratefully received 

@confuzed1 If a 400k property has been downvalued to 320k, as ACG said it's either a desktop valuation (quite common now for low LTV applications) that hasn't taken into account something specific to the property that is different from the comparables, a very conservative valuation due to the lack of any comparables or simply an overpriced property.

It's hard to say which without actually speaking to the valuer. If you're using a broker, you can ask them to try and get in touch with the valuer to see what the reason is for valuing it at 320k.

Tbh, you can do a bit of research on websites like Mouseprice to get a sense of what the estimated value should be on the property you're buying based on neighbouring properties and recent sales in the immediate area.

Sarah1Mitty2

It is unlikely that the seller is an expert in valuation, they have just overestimated or are maybe trying it on?

Confuzed1

dimbo61 said:

Yes

Tell them the valuation and explain that you can't afford to pay 20% ( £80,000) more than the Bank valuation.
See what the vendors come back with.
I wrote down the £80,000 just to make it crystal clear how much over the top the asking price was.
Is it that special ?
Thinking Castle here with 1000 acres of land and your own River/Loch !

Ah yes, unfortunately Dorset house prices and wanting to remain near family and work mean I will never own a loch, although now I'm questioning whether the family are worth it 😂

Thank you for your reply!

Confuzed1

ACG said:

Was a physical valuation done or a desktop valuation? 
I did one earlier in the year where the property had an extension and had been done up. The only recent comparable properties to sell did not have the extension or the work done. So there was a clear reason for the difference in values, but a computer did not take that into account. 

The surveyor did go into the property, which is why it's such a surprise as I would have expected more variation with a computer-only based valuation.

It is slightly different and larger to the other properties around it, so perhaps you're right in suggesting that the recently sold properties aren't directly comparable.

Confuzed1

K_S said:

Confuzed1 said:

Hello!

We're trying to buy a house and our offer has been accepted by the seller. We had already negotiated a lower offer as we thought the price too steep. We've just had the lender's valuation back and they've valued it at £80,000 lower than the accepted offer (20% lower). 

This seems a huge difference in price. We could still continue with the sale, but are now worried that the house has been hugely overvalued by the seller. The examples I've found online all have a much lower gap than this, around the 10% figure.

Should I try to renegotiate again with the seller? Although we technically could still buy it, I now feel we would be overpaying by a long way and would be taking out the maximum loan unnecessarily when the property isn't worth the offer price. 

Advice gratefully received 

@confuzed1 If a 400k property has been downvalued to 320k, as ACG said it's either a desktop valuation (quite common now for low LTV applications) that hasn't taken into account something specific to the property that is different from the comparables, a very conservative valuation due to the lack of any comparables or simply an overpriced property.

It's hard to say which without actually speaking to the valuer. If you're using a broker, you can ask them to try and get in touch with the valuer to see what the reason is for valuing it at 320k.

Tbh, you can do a bit of research on websites like Mouseprice to get a sense of what the estimated value should be on the property you're buying based on neighbouring properties and recent sales in the immediate area.

Thank you, I will have a look at Mouse price and see if the broker can get in touch with the valuer. 

Gaz012012

I've just had same. 20% down via Santader

jimjames

Sarah1Mitty2 said:

It is unlikely that the seller is an expert in valuation, they have just overestimated or are maybe trying it on?

Surely it's the agent that advises them?

trakky14

Either a greedy agent or seller then...or did you go to highest bids?? That can unfortunately catch a lot of people out.