My Buyers Lender has down valued my house

Amanda23

Hi

After a small bidding war on our house sale, we accepted an offer just over asking price.

The Buyers Lender carried out a drive by valuation rather than a physical valuation. The lender has since down valued the house. 

  

The Buyer is waiting for the survey report and the estate agent mentions that we cannot see this report.   

We have asked the estate agent to start the appeal process and the agent will ask the buyer to contact their Lender, perhaps prematurely...?

I understand that Lenders are rarely increasing the valuation these days. We have looked after our house well but the drive by valuation will not reflect the house condition.

If I can't see the survey report, can the Lender confirm the valuation amount in some other way and what are the options open to me as a Seller once I receive evidence of the valuation amount?

Our contract with the estate agent does state that if they have found a Buyer we will have to pay their fees if we pull out (If I'm understanding it correctly) - is accepting the Lenders valuation amount the only option available to us?

Thanks 

lookstraightahead

It's up to the buyer. It purely means the lender is not happy to risk the amount the buyer wants to borrow.

The buyer is paying for the valuation and the survey.

housebuyer143

You can't do anything as a seller. It's up to the buyer to appeal if they want to. 

When they do a drive by they do also look at the listing so they can see what it's like inside. 

Sarah1Mitty2

It is about what they are comfortable lending for the type/size of house, things that you think improve the house won`t be on the lender`s radar.

RM_2013

What are the buyers intentions? Can they put any savings towards the shortfall or amend their LTV amount? Do they still want to proceed at the offer price?  It would be the buyers that would need to appeal as it’s their lender that has applied the valuation. 

As a seller you don’t have to accept a lower offer but it may mean that your buyers can’t complete the deal.
We are in the opposite situation as we offered over asking on the house we wanted in a bidding war but we accepted this was a risk we were prepared to take.  We have wiggle room in our budget to absorb the down value.

we’ve had a survey done today on the house we are selling and hoping ours doesn’t get downvalued as this could cause the chain to collapse.  Stressful 

[Deleted User]

The lenders valuation, with its margin for error, and tending towards risk averse, is not beyond question. 

Your estate agent valued the property at an asking price and amongst a few bidders one bid slightly more than asking.

Personally I should be reluctant to let them make a show of the lenders valuation as a device to renegotiate.

They have knocked out the competition based on their higher bid, now honour it. They bid more than the estate agent valuation by choice.

And obviously that clause does not preclude you from rejecting bids.

Hedgepigs

Amanda23 said:

Our contract with the estate agent does state that if they have found a Buyer we will have to pay their fees if we pull out (If I'm understanding it correctly) - is accepting the Lenders valuation amount the only option available to us?

Well no. You don't have to agree to a reduced offer from your buyer. They can find the difference or withdraw their offer.

From your side, it really doesn't matter what the buyers surveyor or lender thinks the house is worth. You either agree to a price or you don't. It matters more that if they pull out of the sale how easy you think it will be to get another buyer and if it will negatively impact your onward purchase, which might make negotiation on price the best option.

MEM62

Amanda23 said:

Hi

After a small bidding war on our house sale, we accepted an offer just over asking price.

The Buyers Lender carried out a drive by valuation rather than a physical valuation. The lender has since down valued the house. 

  

The Buyer is waiting for the survey report and the estate agent mentions that we cannot see this report. That's correct, it was not prepared for you.    

We have asked the estate agent to start the appeal process and the agent will ask the buyer to contact their Lender, perhaps prematurely...?  The estate agent cannot appeal anything.  This issue is between the purchaser and their lender.  It is nothing you can get involved in.    

I understand that Lenders are rarely increasing the valuation these days. We have looked after our house well but the drive by valuation will not reflect the house condition.

If I can't see the survey report, can the Lender confirm the valuation amount in some other way and what are the options open to me as a Seller once I receive evidence of the valuation amount?  No.  Again - you are not part of this process.  It is a matter betewen the buyer and their lender.  

Our contract with the estate agent does state that if they have found a Buyer we will have to pay their fees if we pull out (If I'm understanding it correctly) - is accepting the Lenders valuation amount the only option available to us?  No, it is not.  You have an offer from a potential purchaser.  They can either proceed on the basis of that offer or they can pull out.  You are not under any obligation to re-negotiate.    

Thanks 

You have an agreed price with your buyer.  Getting the finding in place is their problem, not yours.  

steampowered

Amanda23 said:

Our contract with the estate agent does state that if they have found a Buyer we will have to pay their fees if we pull out (If I'm understanding it correctly) - is accepting the Lenders valuation amount the only option available to us? 

Your contract probably has a clause which says that they are due a fee if they find a "ready, willing and able" buyer. 

A buyer who cannot pay the agreed price because they can't get a mortgage is neither ready, willing nor able! 

Sarah1Mitty2

Amanda23 said:

Hi

After a small bidding war on our house sale, we accepted an offer just over asking price.

The Buyers Lender carried out a drive by valuation rather than a physical valuation. The lender has since down valued the house. 

  

The Buyer is waiting for the survey report and the estate agent mentions that we cannot see this report.   

We have asked the estate agent to start the appeal process and the agent will ask the buyer to contact their Lender, perhaps prematurely...?

I understand that Lenders are rarely increasing the valuation these days. We have looked after our house well but the drive by valuation will not reflect the house condition.

If I can't see the survey report, can the Lender confirm the valuation amount in some other way and what are the options open to me as a Seller once I receive evidence of the valuation amount?

Our contract with the estate agent does state that if they have found a Buyer we will have to pay their fees if we pull out (If I'm understanding it correctly) - is accepting the Lenders valuation amount the only option available to us?

Thanks 

That would be a sensible move with all that is going on just now, lenders may be even more cautious in a few months time.

lookstraightahead

[Deleted User] said:

The lenders valuation, with its margin for error, and tending towards risk averse, is not beyond question. 

Your estate agent valued the property at an asking price and amongst a few bidders one bid slightly more than asking.

Personally I should be reluctant to let them make a show of the lenders valuation as a device to renegotiate.

They have knocked out the competition based on their higher bid, now honour it. They bid more than the estate agent valuation by choice.

And obviously that clause does not preclude you from rejecting bids.

This is why, unless you have a large deposit, you should never get into a bidding war.

They probably can't honour it, or they may be shocked by what the lender will risk.

I too would always keep my word, but then I would never promote a bidding war as a seller, or entertain it as a buyer.