Enormous down valuation

Confuzed1

trakky14 said:

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

We negotiated a price that was the middle of the three estate agent valuations they received and was in line with what we'd expect given recent sold prices on Rightmove for the area. I guess all agents inflate their valuations to some degree though

fergie_

Another option would be to get your own survey and valuation done - then negotiate with the lender. If the survey was on behalf of the lender, it is in their interests to agree a lower valuation to guard against a market downturn.

K_S

fergie_ said:

Another option would be to get your own survey and valuation done - then negotiate with the lender. If the survey was on behalf of the lender, it is in their interests to agree a lower valuation to guard against a market downturn.

For the benefit of others who may come across this thread - the part in bold above is not something I've ever seen happen. Lenders will not rely on a valuation instructed by the buyer, they will fall back on the valuation instructed by them.

If there are sufficient recent comparables which indicate that the property was wrongly valued, the buyer can sometimes appeal the valuation. Even in that case it's the original valuer who has to look at the evidence provided and decide whether to change their valuation result or not. Appeals very rarely work.

Sarah1Mitty2

jimjames said:

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?

Yes that`s a fair point actually.

Confuzed1

Thank you for all of your advice. We spoke with the seller and they were unwilling to reduce the price, so we have pulled out of the sale. It seems very unwise to buy a house at 20% over the lender's valuation. It is a shame as we had a family connection to the house and had already paid for the structural survey and imagined living there, but I don't see we can do much else if the seller won't consider negotiating. It will go back on the market

luis1988

Confuzed1 said:

Thank you for all of your advice. We spoke with the seller and they were unwilling to reduce the price, so we have pulled out of the sale. It seems very unwise to buy a house at 20% over the lender's valuation. It is a shame as we had a family connection to the house and had already paid for the structural survey and imagined living there, but I don't see we can do much else if the seller won't consider negotiating. It will go back on the market

Was you going with a mainstream lender? 

Confuzed1

luis1988 said:

Confuzed1 said:

Thank you for all of your advice. We spoke with the seller and they were unwilling to reduce the price, so we have pulled out of the sale. It seems very unwise to buy a house at 20% over the lender's valuation. It is a shame as we had a family connection to the house and had already paid for the structural survey and imagined living there, but I don't see we can do much else if the seller won't consider negotiating. It will go back on the market

Was you going with a mainstream lender? 

Yes, Coventry

yessuz

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 

if it is desktop valuation then you are diffidently stuffed (although as you say - it is in house..). I had same when we were buying. I had 3 valuations for the same house which came back like 10-20% below market price in the town (kind of valuations came back for the detache property same as for semi detached in same street..). I had to switch broker and lender, as well as approached seller and used this as leverage, and managed to agree on a bit lower price which was Ok for valuator.

they will not change valuation, nor they are going to admit they made a mistake. As I learned, some of these desktop valuators never see what they are valuating and just look at the excel sheet, and IF the offer is "a bit too high" for valuation they see on excel from the limited data points, they tend to value it down. If you manage to get the offer "within a reason for the valuation table" - then it will be approved at the agreed value. non-sense but it is... so basically, if you can use the data from down valuation, agree lower purchase price and submit for valuation with different lender (who uses different valuators) - you might even win here.