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

Sarah1Mitty2

MobileSaver said:

Sarah1Mitty2 said:

nicmyles said:

A flat I bought was downvalued and we were happy to challenge the valuation (didn't work) and in the end make up some of the difference, because we were confident in the market and that we would make a load of money on it when it came time to sell. Which is what happened.

a relative of mine trying to sell has had a lot of feedback that potential buyers can`t even afford the monthly payments now that mortgage rates are going up!

Something doesn't add up there. If potential buyers cannot afford monthly mortgage payments then presumably they can't afford monthly rental payments either so are either not serious buyers, trying to live beyond their means or you just made that story up?

How do you get from someone not being able to afford the increased mortgage payments on a house they fancy buying to them not being able to afford their existing rent, how do you know they are even paying rent?

TXC

Rachelredwood16 said:

TXC said:

Your next steps are unfortunately very simple

• Stump up the delta between valuation and your offer.
• Walk away

Do not pin any hopes on the seller changing their mind if they will not move on their stance. You need to move on and forget it because the right house is out there.

As others have said - you really shouldnt want to be paying any more than surveyor valuation at the moment (whether you agree with it or not, thats the valuation opinion that matters unless youre a cash buyer) as youll open yourself up to a lot of pain unless you plan to never, ever sell.

Some sellers are still being very bloody minded at the moment despite rocketing interest rates and cost of living squeeze - I had a valuation come in significantly under my offer on a house when househunting (some may remember on here) - that house and seller have since had five consecutive sales fall through after me and has now been on the market close to a year with not so much as a pounds movement in asking price.

Wow, thats crazy. You'd think if it fell through that many times (if all were a case of down valuations), they'd reduce the price in line with the average of what it's actually valued at. That's what I'd do in any case. I assume you found another great property? 

I have indeed! been in for about four months now. Feedback from the EA with the other property was the vendor needs that price due to help to buy loan! Think they're holding out for a cash buyer...

Rachelredwood16

TXC said:

Rachelredwood16 said:

TXC said:

Your next steps are unfortunately very simple

• Stump up the delta between valuation and your offer.
• Walk away

Do not pin any hopes on the seller changing their mind if they will not move on their stance. You need to move on and forget it because the right house is out there.

As others have said - you really shouldnt want to be paying any more than surveyor valuation at the moment (whether you agree with it or not, thats the valuation opinion that matters unless youre a cash buyer) as youll open yourself up to a lot of pain unless you plan to never, ever sell.

Some sellers are still being very bloody minded at the moment despite rocketing interest rates and cost of living squeeze - I had a valuation come in significantly under my offer on a house when househunting (some may remember on here) - that house and seller have since had five consecutive sales fall through after me and has now been on the market close to a year with not so much as a pounds movement in asking price.

Wow, thats crazy. You'd think if it fell through that many times (if all were a case of down valuations), they'd reduce the price in line with the average of what it's actually valued at. That's what I'd do in any case. I assume you found another great property? 

I have indeed! been in for about four months now. Feedback from the EA with the other property was the vendor needs that price due to help to buy loan! Think they're holding out for a cash buyer...

Ahh amazing, are you happy? Oh really? It's 20% of the sale or RICS valuation whichever is the highest so its not like they have a certain amount to pay back. Unless their house hasn't increased by much and they don't have enough equity in the property for an onward purchase.. in any case that's deposit related so it doesn't make much sense to me but nevermind, you've found something else! 

MobileSaver

Sarah1Mitty2 said:

MobileSaver said:

Sarah1Mitty2 said:

nicmyles said:

A flat I bought was downvalued and we were happy to challenge the valuation (didn't work) and in the end make up some of the difference, because we were confident in the market and that we would make a load of money on it when it came time to sell. Which is what happened.

a relative of mine trying to sell has had a lot of feedback that potential buyers can`t even afford the monthly payments now that mortgage rates are going up!

Something doesn't add up there. If potential buyers cannot afford monthly mortgage payments then presumably they can't afford monthly rental payments either so are either not serious buyers, trying to live beyond their means or you just made that story up?

How do you get from someone not being able to afford the increased mortgage payments on a house they fancy buying to them not being able to afford their existing rent, how do you know they are even paying rent?

For obvious reasons, monthly mortgage payments are typically less than monthly rent payments for like for like properties so if someone can't afford the monthly mortgage payments on a particular property then they clearly can't afford the rent either, it's not rocket science.

It's the same if they're not currently paying rent so as I said they're obviously trying to live beyond their means which has nothing to do not being able to afford increased mortgage rates.

In truth I think you just made that story up...

sheramber

But they may not be buying like for like.

they may be upsizing so the new mortgage was  going to be higher than their existing mortgage but now the mortgage rates have gone up they are outside their budget.

They may be living with parents and not paying a market value rent.

They may be moving to a more expensive area so house are more expensive.

None of that means they are not serious buyers. It just means they have to reconsider their position.

MobileSaver

sheramber said:

they may be upsizing so the new mortgage was  going to be higher than their existing mortgage but now the mortgage rates have gone up they are outside their budget. They may be moving to a more expensive area so house are more expensive. None of that means they are not serious buyers.

Yes, which is why I said the other reason is that they're simply trying to live beyond their means. If they can't afford a mortgage for their new home then they can't afford to rent that same new home either so the fact that mortgage rates have increased is irrelevant.

sidneyvic

Richiem1987 said:

BaileysMam said:

Thanks everyone. I’ve accepted it’s best to walk away and try to find somewhere else.
Thankfully new properties come up in the area we want fairly regularly. I just hope the next one is valued correctly (by everyone involved!)

As a buyer, its good practice to focus on properties where you would be able to cover 20% of the asking price. This give you room when a lender down values a property, giving you 10% wriggle room. Good luck on your search. 

Terrible advise, I take it you are an estate agent ?

sheramber

MobileSaver said:

sheramber said:

they may be upsizing so the new mortgage was  going to be higher than their existing mortgage but now the mortgage rates have gone up they are outside their budget. They may be moving to a more expensive area so house are more expensive. None of that means they are not serious buyers.

Yes, which is why I said the other reason is that they're simply trying to live beyond their means. If they can't afford a mortgage for their new home then they can't afford to rent that same new home either so the fact that mortgage rates have increased is irrelevant.

But they could afford until the rates increased. yes they might not afford the rental for the equivalent house either but that is  irrelevant as they are not trying to rent.

MobileSaver

sheramber said:

MobileSaver said:

sheramber said:

they may be upsizing so the new mortgage was  going to be higher than their existing mortgage but now the mortgage rates have gone up they are outside their budget. They may be moving to a more expensive area so house are more expensive. None of that means they are not serious buyers.

Yes, which is why I said the other reason is that they're simply trying to live beyond their means. If they can't afford a mortgage for their new home then they can't afford to rent that same new home either so the fact that mortgage rates have increased is irrelevant.

But they could afford until the rates increased. yes they might not afford the rental for the equivalent house either but that is  irrelevant as they are not trying to rent.

Well I disagree, if they can't afford the rent either then they can't afford the house full stop - it's nothing to do with increased mortgage rates, they're just trying to live beyond their means.

Regardless, that's not my main point. @Sarah1Mitty2 claimed that lots of people cannot afford the mortgage now that rates have gone up but back in the real world the recent rate increase only resulted in payments going up by something like £50 to £60 a month on a typical house on a typical fixed mortgage.

Do you genuinely believe that lots of people who were trying to buy Sarah1Mitty2's relative's house suddenly cannot afford an extra £50 to £60 a month?

Sarah1Mitty2

sheramber said:

But they may not be buying like for like.

they may be upsizing so the new mortgage was  going to be higher than their existing mortgage but now the mortgage rates have gone up they are outside their budget.

They may be living with parents and not paying a market value rent.

They may be moving to a more expensive area so house are more expensive.

None of that means they are not serious buyers. It just means they have to reconsider their position.

Yes, I think the first two examples cover the types of people who gave feedback that rising mortgage rates changed their ability to buy at the price my relative wanted.