Seller reject survey valuation?

TripleH

We bought our previous home around the time of the Brexit vote. We had agreed a price, had an offer etc and were nearly at exchange when the vote happened.

The bank turned round and demanded £20,000 more for the deposit.

My wife haggled £10,000 off the value with the vendor on condition we complete in 2 weeks and we borrowed the remaining money from family. This was an ex-rental flat the previous owner had possessed for a while, other scenarios will be different.

Sarah1Mitty2

mi-key said:

dimbo61 said:

What goes up sometimes goes down
Welcome to the housing market.
5% downturn in house prices with more on the way.
However Mr and Mrs Jones who have lived in there home may still want top price on their house because the one across the road sold for £1,000,000 last year.
A property is worth what someone can afford to pay for it 

Or they may need that price to buy their next home, so can't sell for less, so will either sell for that or stay where they are .

Or negotiate their next move down to match what they can afford.

[Deleted User]

fackers_2 said:

mi-key said:

Just a hunch as the seller has been incredibly difficult to deal with during negotiation... Makes me think they could be difficult should something crop up. Mortgage advisor has also told me that several homes he's arranged mortgages for have all been reduced by 2-4% via the lender valuation. Don't want to go 7 or so weeks then find out they crash the sale.

IMO with a touch of emotional bias, I would take the offer as its the only offer and get the money! Mainstream news now sharing market has fallen for 7 months in a row, surely this should give a nudge to people to think twice about holding out for the dream cash buyer and offers over.  Will keep this threat updated.

A reduction of 2% is nothing, nor is 4% really. It's not like they are saying it is a huge amount you would need to find, if it even comes to that.

Really if it does come out downvalued, it would be you who would crash the sale rather than the seller. If it is downvalued 4% could you come up with the difference yourself? 

How much is the house you are buying on for originally, and how much was your accepted offer? It all makes a difference to the likelihood of what the seller will do. 

Hardly, Estate agents value to win instruction, jo Bloggs public believe the value of the asking price is correct. it's then for the professional valuators to assess the true value of the property. That's fair for everyone surely. 

It's not fun especially being on the cusp of a LTV bracket so if you tip over by 1k we lose the rate we want. 

As mentioned by mi key, what money would you bet on 5 valuers coming out with the same valuation? There is a percentage margin for error. Case in point. My father had a valuation of 300k, and then another at 325k and so he remortgaged. Thats near 10%! If a surgeon was that imprecise, he would be removing the wrong organ.

lookstraightahead

Whether the lender values it at more or less than had been agreed, the buyer still needs to be able to afford it. So it's not always what the buyer is willing to pay, it's what the lender is willing to risk.

Why would a buyer risk it if a lender won't? I know some do, I just don't get why.

MobileSaver

lookstraightahead said:

Why would a buyer risk it if a lender won't? I know some do, I just don't get why.

Because the lender's risk profile is assuming worst case scenario where they have to sell quickly at auction to try to get their money back. Most buyers (rightly) assume they'll sell at their leisure at a fair market value.

ArbitraryRandom

lookstraightahead said:

Why would a buyer risk it if a lender won't? I know some do, I just don't get why.

A lender and buyer are generally valuing for a different purpose. 

A lender is concerned with recouping their investment should the buyer default on the mortgage; as such they tend to be quite conservative and risk averse with valuations not routinely taking into account any special qualities or features of the property. 

A buyer is sometimes looking at recouping their investment if they are seeing this property as 'a step on the ladder', they might take the same view as the lender and see properties as interchangeable. 

But for many buyers, their primary interest is buying a home to live in. Perhaps they have a specific set of requirements and there aren't many suitable alternatives on the market, or have just fallen in love with the property and can imagine living there until old age? If so it's understandable they might try to stretch themselves to find the extra money. 

[Deleted User]

lookstraightahead said:

Whether the lender values it at more or less than had been agreed, the buyer still needs to be able to afford it. So it's not always what the buyer is willing to pay, it's what the lender is willing to risk.

Why would a buyer risk it if a lender won't? I know some do, I just don't get why.

The trouble is you put far too much faith in lenders and the 'profession' of valuing a house which even the industry recognises as having a significant margin for error. I am sure people learned this lesson circa 2007.

mi-key

To be honest if I was buying a house then the lenders valuation would make no real difference to me, ( unless they came back saying it was worth half what I was paying ), as long as they were willing to lend me what I needed.

I think most of us can do our own research to see if we think a house is priced fairly for the area without needing professionals to tell us what it is worth down to the pound, which is just their opinion based on the same data we can access anyway

Dustyevsky

mi-key said:

To be honest if I was buying a house then the lenders valuation would make no real difference to me, ( unless they came back saying it was worth half what I was paying ), as long as they were willing to lend me what I needed.

I think most of us can do our own research to see if we think a house is priced fairly for the area without needing professionals to tell us what it is worth down to the pound, which is just their opinion based on the same data we can access anyway

At my stage in life, even if a house was unfairly priced, I might buy it if it had enough of the features I'd want and not many down-sides. Of course, I'd haggle, but finding the sort of features I'd prefer would be hard, and most sellers/agents would know that.

Noneforit999

Dustyevsky said:

mi-key said:

To be honest if I was buying a house then the lenders valuation would make no real difference to me, ( unless they came back saying it was worth half what I was paying ), as long as they were willing to lend me what I needed.

I think most of us can do our own research to see if we think a house is priced fairly for the area without needing professionals to tell us what it is worth down to the pound, which is just their opinion based on the same data we can access anyway

At my stage in life, even if a house was unfairly priced, I might buy it if it had enough of the features I'd want and not many down-sides. Of course, I'd haggle, but finding the sort of features I'd prefer would be hard, and most sellers/agents would know that.

I think that applies to most people who are buying their second/third/fourth home.

When we bought our first home, we overlooked many things because we just didn't see them as important at the time but on the second, things like off road parking became a deal breaker. If we ever moved again which I hope we don't, there are several checklist items I would not compromise on. 

I guess the reality is though that you generally have more money to spend for your second purchase as well as a lower LTV so you can be more picky.