Survey down valued & seller won’t reduce price - next steps?

BaileysMam

Background - house had been on market 3 weeks when we had our offer accepted just below “guide price”. They had one other offer in that time that they hadn’t accepted (presumably too low).

Mortgage lender has valued house 7% under what we have offered. We cannot afford to make up whole difference as it would use up all our savings, but offered to make up 1/4 of the way.

I think we would have considered meeting half way but vendor will not come down at all.

So, we have left our offer on the table but said we will have to withdraw from sale.

Our other options:
a) challenge valuation but EA agree there is little in way of comparable property to do so

b) try a different lender but we had already been through two brokers trying to find lender that suits my particular employment situation, and we are happy with the lender we had finally settled on, plus no guarantee  new lender would value any higher

Do you think we are right to walk away?

BaileysMam

Argh sorry I’ve posted this in the wrong forum. Wonder if mods can move to buying ?

K_S

BaileysMam said:

Background - house had been on market 3 weeks when we had our offer accepted just below “guide price”. They had one other offer in that time that they hadn’t accepted (presumably too low).

Mortgage lender has valued house 7% under what we have offered. We cannot afford to make up whole difference as it would use up all our savings, but offered to make up 1/4 of the way.

I think we would have considered meeting half way but vendor will not come down at all.

So, we have left our offer on the table but said we will have to withdraw from sale.

Our other options:
a) challenge valuation but EA agree there is little in way of comparable property to do so

b) try a different lender but we had already been through two brokers trying to find lender that suits my particular employment situation, and we are happy with the lender we had finally settled on, plus no guarantee  new lender would value any higher

Do you think we are right to walk away?

@baileysmam What LTVs are you at based on the agreed purchase price and down-valued price? Any option to go up an LTV band, increase borrowing?

It's not surprising that the vendor is unwilling to renegotiate, given that it's only been on the market 3 weeks and the size of the downval.

Based on my experience, if you want to buy this property, then your options are likely to be limited to trying with another lender that uses a different surveyor panel. That's the only way that has consistently worked for me when I have high-LTV clients who want to buy a house in-spite of being down-valued by the first lender.

london21

If you move to a different lender they might use the same surney company.

Depends how much you want the property and the sold prices in the area. 

BaileysMam

K_S said:

BaileysMam said:

Background - house had been on market 3 weeks when we had our offer accepted just below “guide price”. They had one other offer in that time that they hadn’t accepted (presumably too low).

Mortgage lender has valued house 7% under what we have offered. We cannot afford to make up whole difference as it would use up all our savings, but offered to make up 1/4 of the way.

I think we would have considered meeting half way but vendor will not come down at all.

So, we have left our offer on the table but said we will have to withdraw from sale.

Our other options:
a) challenge valuation but EA agree there is little in way of comparable property to do so

b) try a different lender but we had already been through two brokers trying to find lender that suits my particular employment situation, and we are happy with the lender we had finally settled on, plus no guarantee  new lender would value any higher

Do you think we are right to walk away?

@baileysmam What LTVs are you at based on the agreed purchase price and down-valued price? Any option to go up an LTV band, increase borrowing?

It's not surprising that the vendor is unwilling to renegotiate, given that it's only been on the market 3 weeks and the size of the downval.

Based on my experience, if you want to buy this property, then your options are likely to be limited to trying with another lender that uses a different surveyor panel. That's the only way that has consistently worked for me when I have high-LTV clients who want to buy a house in-spite of being down-valued by the first lender.

We were at 90% LTV although we could have afforded 85%, we wanted to keep some back as easier access savings.

SetantaSuck

If you go with a different lender expect a higher interest rate as rates increased yesterday.

BaileysMam

SetantaSuck said:

If you go with a different lender expect a higher interest rate as rates increased yesterday.

Yes we are concerned about this. We haven’t had a chance to speak to lender yet.
Is it possible they will let us use same product on another house within the same estate or is it likely we will need to start the application over again and face a higher rate?

K_S

BaileysMam said:

K_S said:

BaileysMam said:

Background - house had been on market 3 weeks when we had our offer accepted just below “guide price”. They had one other offer in that time that they hadn’t accepted (presumably too low).

Mortgage lender has valued house 7% under what we have offered. We cannot afford to make up whole difference as it would use up all our savings, but offered to make up 1/4 of the way.

I think we would have considered meeting half way but vendor will not come down at all.

So, we have left our offer on the table but said we will have to withdraw from sale.

Our other options:
a) challenge valuation but EA agree there is little in way of comparable property to do so

b) try a different lender but we had already been through two brokers trying to find lender that suits my particular employment situation, and we are happy with the lender we had finally settled on, plus no guarantee  new lender would value any higher

Do you think we are right to walk away?

@baileysmam What LTVs are you at based on the agreed purchase price and down-valued price? Any option to go up an LTV band, increase borrowing?

It's not surprising that the vendor is unwilling to renegotiate, given that it's only been on the market 3 weeks and the size of the downval.

Based on my experience, if you want to buy this property, then your options are likely to be limited to trying with another lender that uses a different surveyor panel. That's the only way that has consistently worked for me when I have high-LTV clients who want to buy a house in-spite of being down-valued by the first lender.

We were at 90% LTV although we could have afforded 85%, we wanted to keep some back as easier access savings.

@baileysmam Assuming that you want to buy this house at 300k, is there an option to go to 95% on the LTV while adding a bit of cash?

For example assume the original purchase price was 300k, a loan size of 270k (90% LTV) and a cash deposit of 30k

A 7% downval would mean a valuation of 279k. If you upped your LTV to 95%, that would mean a 265k loan size and a cash deposit required of 35k.

So by adding 5k to the deposit and going up an LTV band on the mortgage, you could still buy the property at 300k.

Since you have a broker, they would've probably already told you of the above option if it was viable.

K_S

BaileysMam said:

SetantaSuck said:

If you go with a different lender expect a higher interest rate as rates increased yesterday.

Yes we are concerned about this. We haven’t had a chance to speak to lender yet.
Is it possible they will let us use same product on another house within the same estate or is it likely we will need to start the application over again and face a higher rate?

@baileysmam Depends on the lender. For example, Nationwide requires a fresh application from scratch while HSBC allows me to change the property on the offer if a client's purchase falls through and they find an different property to purchase.

diggingdude

As no one has said it yet. Why would you want to pay more than what a professional values it at? If you love it or essential then fair enough. If not then don't fall into the trap of fulfilling other people's fantasies 

lookstraightahead

diggingdude said:

As no one has said it yet. Why would you want to pay more than what a professional values it at? If you love it or essential then fair enough. If not then don't fall into the trap of fulfilling other people's fantasies 

Exactly my sentiment. 

I would just walk away. Your deposit isn't huge and house prices will stabilise (or come down) probably.