Second Down valuation on house I’m selling

mi-key

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Fbuyer1234 said:

Sarah1Mitty2 said:

RelievedSheff said:

There is absolutely no point in worrying about something that you have no control over.

The house obviously isn't over priced or you wouldn't be getting the amount of interest that you are.

You just need to find a buyer who isn't reliant on such fine margins that a down valuation scuppers the sale.

You bought the house. There will be someone else in the same situation as you were when you bought.

Unlikely if they are buying with a mortgage, lending conditions have changed completely, anyone who bought in the last few years should be prepared for a valuation that says the house is worth less than they paid.

I haven’t heard this as a general consensus? Is this really the case? 

Not really, no. It's far more complicated than that and will depend on when you bought, the area you live in and the type of house. If you bought at the very peak it might be worth a bit less now but you're probably talking a few %. We bought our house in 2021 and it's now worth about 15% more than we paid.

Mortgage companies will be a little conservative in what they'll lend at the moment. If you go for a cash buyer or someone with a sizeable deposit you could potentially avoid some of these issues. You're far more likely to get a down valuation from someone who's borrowing up to their necks.

Why did you sell so soon after buying?

We’re not selling but it has recently been revalued.

Without an actual sale it is just guesswork though, a lender`s valuation will be much more picky, I think a house purchased in 2021 is more likely to be looking at selling for 15% less now not more, unless it is very unique or in an exceptional area.

I agree that without a sale it’s all guesswork. We aren’t selling though so this is the best we’ll get.

However this is a lenders valuation. The reason it’s been valued is for a re-mortgage. We paid £430k for it in 2021 (a valuation that the lender agreed with, although we could have underpaid) and they’ve said it’s now worth £480k.

If we sold we might well get a bit less than that but there’s no way it would go for 15% less than what we paid.

Lenders valuations are often below market value as well as they are more conservative. If you were selling, you would probably get more than £480K for it now.

Once again Crashy showing they have no idea what is really going on in the market !

ReadingTim

Ok, putting aside the debate with CrashySarah as it's like trying to play chess with a pigeon and getting back to the OP's question....

The mortgage company isn't valuing it per se - they're merely saying how much they're willing to lend on it.  Now, as value = mortgage + deposit, the two are very closely linked, but really, the mortgage provider is interested in how much they can get back in the event they have to repossess and sell the place in the event of default.  

The smaller the buyer's deposit as a percentage of the agreed sale price, the more closely the lender will look at the property, and the greater the potential for a downvaluation - the lender won't lend the amount the buyer wants/needs.  Conversely, the larger the buyer's deposit, the less bothered the mortgage company will be, as even if there's a forced sale/auction, they're more likely to get their money back.  

It's likely your previous buyer had a high LTV, whereas hopefully the new one won't have that problem.  And besides, there's nothing you can do about it, so there's really no point in worrying about things which are out of your control.  At best you can simply instruct your EA to put forward only buyers who have a healthy deposit... Good luck, and have faith - you'll find a suitable buyer

[Deleted User]

mi-key said:

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Fbuyer1234 said:

Sarah1Mitty2 said:

RelievedSheff said:

There is absolutely no point in worrying about something that you have no control over.

The house obviously isn't over priced or you wouldn't be getting the amount of interest that you are.

You just need to find a buyer who isn't reliant on such fine margins that a down valuation scuppers the sale.

You bought the house. There will be someone else in the same situation as you were when you bought.

Unlikely if they are buying with a mortgage, lending conditions have changed completely, anyone who bought in the last few years should be prepared for a valuation that says the house is worth less than they paid.

I haven’t heard this as a general consensus? Is this really the case? 

Not really, no. It's far more complicated than that and will depend on when you bought, the area you live in and the type of house. If you bought at the very peak it might be worth a bit less now but you're probably talking a few %. We bought our house in 2021 and it's now worth about 15% more than we paid.

Mortgage companies will be a little conservative in what they'll lend at the moment. If you go for a cash buyer or someone with a sizeable deposit you could potentially avoid some of these issues. You're far more likely to get a down valuation from someone who's borrowing up to their necks.

Why did you sell so soon after buying?

We’re not selling but it has recently been revalued.

Without an actual sale it is just guesswork though, a lender`s valuation will be much more picky, I think a house purchased in 2021 is more likely to be looking at selling for 15% less now not more, unless it is very unique or in an exceptional area.

I agree that without a sale it’s all guesswork. We aren’t selling though so this is the best we’ll get.

However this is a lenders valuation. The reason it’s been valued is for a re-mortgage. We paid £430k for it in 2021 (a valuation that the lender agreed with, although we could have underpaid) and they’ve said it’s now worth £480k.

If we sold we might well get a bit less than that but there’s no way it would go for 15% less than what we paid.

Lenders valuations are often below market value as well as they are more conservative. If you were selling, you would probably get more than £480K for it now.

Once again Crashy showing they have no idea what is really going on in the market !

Lender price at what they think the market rate is. You might find a buyer who really wants it, or just has money to burn, who is willing to pay over the odds.

Sarah1Mitty2

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Sarah1Mitty2 said:

Gavin83 said:

Fbuyer1234 said:

Sarah1Mitty2 said:

RelievedSheff said:

There is absolutely no point in worrying about something that you have no control over.

The house obviously isn't over priced or you wouldn't be getting the amount of interest that you are.

You just need to find a buyer who isn't reliant on such fine margins that a down valuation scuppers the sale.

You bought the house. There will be someone else in the same situation as you were when you bought.

Unlikely if they are buying with a mortgage, lending conditions have changed completely, anyone who bought in the last few years should be prepared for a valuation that says the house is worth less than they paid.

I haven’t heard this as a general consensus? Is this really the case? 

Not really, no. It's far more complicated than that and will depend on when you bought, the area you live in and the type of house. If you bought at the very peak it might be worth a bit less now but you're probably talking a few %. We bought our house in 2021 and it's now worth about 15% more than we paid.

Mortgage companies will be a little conservative in what they'll lend at the moment. If you go for a cash buyer or someone with a sizeable deposit you could potentially avoid some of these issues. You're far more likely to get a down valuation from someone who's borrowing up to their necks.

Why did you sell so soon after buying?

We’re not selling but it has recently been revalued.

Without an actual sale it is just guesswork though, a lender`s valuation will be much more picky, I think a house purchased in 2021 is more likely to be looking at selling for 15% less now not more, unless it is very unique or in an exceptional area.

I agree that without a sale it’s all guesswork. We aren’t selling though so this is the best we’ll get.

However this is a lenders valuation. The reason it’s been valued is for a re-mortgage. We paid £430k for it in 2021 (a valuation that the lender agreed with, although we could have underpaid) and they’ve said it’s now worth £480k.

If we sold we might well get a bit less than that but there’s no way it would go for 15% less than what we paid.

Looking at what is going on today in financial markets, bank runs in the U.S, credit market stress etc. I am going to stick with my original prediction, I don`t think it is now worth what you think, sorry.

Scotbot

I would say that the fact you got a second offer quickly at asking price means in the current market means the price is realistic .As long as your buyer isn't mortgaging to the hilt you should be OK. 

mi-key

I agree that without a sale it’s all guesswork. We aren’t selling though so this is the best we’ll get.

However this is a lenders valuation. The reason it’s been valued is for a re-mortgage. We paid £430k for it in 2021 (a valuation that the lender agreed with, although we could have underpaid) and they’ve said it’s now worth £480k.

If we sold we might well get a bit less than that but there’s no way it would go for 15% less than what we paid.

Looking at what is going on today in financial markets, bank runs in the U.S, credit market stress etc. I am going to stick with my original prediction, I don`t think it is now worth what you think, sorry.

I'm sure you are right and you know much better than all the highly qualified experts the mortgage lenders use to protect their multi billion pound investments....

Sarah1Mitty2

mi-key said:

I agree that without a sale it’s all guesswork. We aren’t selling though so this is the best we’ll get.

However this is a lenders valuation. The reason it’s been valued is for a re-mortgage. We paid £430k for it in 2021 (a valuation that the lender agreed with, although we could have underpaid) and they’ve said it’s now worth £480k.

If we sold we might well get a bit less than that but there’s no way it would go for 15% less than what we paid.

Looking at what is going on today in financial markets, bank runs in the U.S, credit market stress etc. I am going to stick with my original prediction, I don`t think it is now worth what you think, sorry.

I'm sure you are right and you know much better than all the highly qualified experts the mortgage lenders use to protect their multi billion pound investments....

I`m sure they just looked at a couple of recent sales..........until we hear back from the OP on their actual valuation though there is just opinion.

Sarahspangles

You’ve really only got a sample size of two for what’s been happening with your house offers.  I would ignore any speculation about the market - in fact I’ve now discovered you can actually ignore specific members of the forum which is refreshing.

Back to your house - you’re selling an inexpensive first time buyer property so a buyer would need to find a small deposit - say 5% - but has no wriggle room if the mortgage valuation is a little lower than the 95% he/she needs.  You just need to wait for that buyer that has saved 10% and has a cushion if it happens.  Maybe it will be buyer 3 or buyer 7.  It’s just the reality in a period of economic turmoil, it’s frustrating I know.

it sounds like you’ve done everything you can by ensuring the property is in good condition so it won’t get down-valued due to needing work.  

Fbuyer1234

Thank you all for your reassuring words! 

I’ll update this thread once I have an outcome, still haven’t heard anything so I’m hoping no news is good news! 

Sarah1Mitty2

Scotbot said:

I would say that the fact you got a second offer quickly at asking price means in the current market means the price is realistic .As long as your buyer isn't mortgaging to the hilt you should be OK. 

Buyer offers mean nothing unless they are prepared to make up the difference on any down-valuation, for people buying with a mortgage the lender decides for the most part how much it is worth, the fact that there have already been two down-valuations indicate that the price is not realistic for the market, and in this environment a 20k uplift in two years might be ambitious. Nevertheless I hope the OP gets the outcome they are looking for, Good luck OP!