Downvaluation (automated) by lender

[Deleted User]

nuhopper said:

Thanks all for your views. 
I think what frightens me is the work this house and its garden needs, even though one week ago I felt excited and invigorated by it all, and I consider our Reno budget to be a decent one and the house a long term project.

It's classic cold feet time. I have asked the broker for a manual valuation from the bank which puts a hard credit search on but it doesn't matter as we haven't had one for a while.

As we are chain free and not in an urgent rush (but definitely need a house soon) why not see if we can get some money off or at least have assurance of the asking price. I can't help feeling a bit indignant about how the seller has refused to discount the house at all except by 3,5k when the fence alone was quoted 6k to repair (it's about 30m.long).

It seems you are getting sidetracked. Surely the conditon of the fence was visible upon viewing?

I also don't think that it helps you to conflate issues. Your willingness to undertake a project with renovations required is a question that should be considered on its own merit. A few percentage change in the agreed price should not add or detract from the 'fright factor' which will be the same no matter what the price is paid.

Whilst the lender's valuation could be important if someone is stretching their finances to the limit, my take on it is that valuation is a human task, not a science, and I understand that some variation is likely to occur between the valuation of  'professionals'. I think people are right to point out that the 'downvaluation' is a small percetage....an acceptably small percentage, and in my view it should not change your mind.  

Classic cold feet as you say, you seem to be finding cause to doubt, and remember that a forum can be an echo chamber for those doubts.

nuhopper

[Deleted User] said:

nuhopper said:

Thanks all for your views. 
I think what frightens me is the work this house and its garden needs, even though one week ago I felt excited and invigorated by it all, and I consider our Reno budget to be a decent one and the house a long term project.

It's classic cold feet time. I have asked the broker for a manual valuation from the bank which puts a hard credit search on but it doesn't matter as we haven't had one for a while.

As we are chain free and not in an urgent rush (but definitely need a house soon) why not see if we can get some money off or at least have assurance of the asking price. I can't help feeling a bit indignant about how the seller has refused to discount the house at all except by 3,5k when the fence alone was quoted 6k to repair (it's about 30m.long).

It seems you are getting sidetracked. Surely the conditon of the fence was visible upon viewing?

I also don't think that it helps you to conflate issues. Your willingness to undertake a project with renovations required is a question that should be considered on its own merit. A few percentage change in the agreed price should not add or detract from the 'fright factor' which will be the same no matter what the price is paid.

Whilst the lender's valuation could be important if someone is stretching their finances to the limit, my take on it is that valuation is a human task, not a science, and I understand that some variation is likely to occur between the valuation of  'professionals'. I think people are right to point out that the 'downvaluation' is a small percetage....an acceptably small percentage, and in my view it should not change your mind.  

Classic cold feet as you say, you seem to be finding cause to doubt, and remember that a forum can be an echo chamber for those doubts.

Thanks for good advice. You're dead right that it's quibbling - however - it shook me that the valuation came in under the asking price. This is the first time this has happened to me including buying right after the 2007 crash.

I didn't notice the fence at all and was shocked at the quote. 
But you're dead right that it's small change for a long term purchase we plan to invest in.

Sarah1Mitty2

Sunsaru said:

MobileSaver said:

Sarah1Mitty2 said:

RelievedSheff said:

nuhopper said:

lookstraightahead said:

Schwarzwald said:

nuhopper said:

Also to say the house is very much within our affordability with us being able to hold about 100k back for refurbs. I just don't want to pay £30k over the odds. We sold for a fair price after doing a lot of work to our house so I'd like to feel we got our next  house at a fair price too. I don't know if it's just London  but even as a chain free buyer it feels like the vendor/ agent are always out for a few more grand and it gets to this point in the sale and I get confused, uncertain, feel ripped off and want to walk away.

Nobody wants to pay £30k too much for anything

but you focusing a bit too much on this aspect, 812/780k is a 4% deviation between what you agreed and what a bank in the current climate conservatively estimates.

if you really liked something in a shop that you will use for many many years to come and it costs £104 instead of £100, would you let it go?

its a matter of perspective and in this price range you shld stop focusing on the 30k aspect but focus on the % deviation

I get your scenario, but if I could get it down the road for £4 cheaper I would do that. In fact, that's what everyone does in other scenarios, they tend to shop around. 

One brand of baked beans is so randomly expensive now that I don't buy them. The price has made me shop around for something equally as tasty and they've lost my business.

 It's the randomness that's the problem. And I think the housing market is like that. There's no logic or sense to asking prices, and it makes people question and feel uncomfortable.

There are people who will always not question and buy a brand of beans they're happy with, even if they pay more for no other reason than they're happy with that brand. This might just be habit or a load of other justifications. It depends how you are wired and your experiences.

If there was just one tin of beans for 20 miles and the price was more, I'd probably buy spaghetti.

You can apply this to big purchases, jobs, holidays, cars etc. 

It's this, it's my cold feet/ sense of being done over kicking in at the last minute, now for the second time in 3 months. It's a game I want to have a fighting chance at now in my middle age. I'm also aware this house needs a ton of work. Yes we can afford it although some will need to be long term. But it's the knowledge that there won't be a huge queue of people wanting this house that strongly tempts me into testing the seller and makes me feel "how dare you for not selling it cheaper to us". Bit stupid...

How long are you willing to wait for something else to come onto the market that you like?

A tin of beans is a very poor example to use. One tin of beans is exactly the same as another tin of beans a few doors down. But houses are not like that. Every house is individual. There is no "standard" asking price system because each property is so very unique.

The majority of housing in the UK isn`t "unique" in any way, there are millions of flats, new-builds and terraces, all built to more or less the same blueprint, most people buying will find something else if the seller is too difficult.

I think you and @lookstraightahead are very wrong on this, there are relatively few genuinely identical properties in the UK and an even smaller percentage are actually available to buy at any one time. Buying a home is nothing like buying a tin of beans.

Regardless, the OP is not interested in the majority of housing in the UK, they're interested in an £800k property in a particular part of London and as they say "other houses around have sold for much more but have been modernised and extended" so finding something else is much more difficult than you are claiming...

Dude, have you seen the rows of terraced houses in the northwest??

And the thousands of new-build estates, and all the tenement flats in Scotland etc etc.

Sarah1Mitty2

RelievedSheff said:

Sunsaru said:

MobileSaver said:

Sarah1Mitty2 said:

RelievedSheff said:

nuhopper said:

lookstraightahead said:

Schwarzwald said:

nuhopper said:

Also to say the house is very much within our affordability with us being able to hold about 100k back for refurbs. I just don't want to pay £30k over the odds. We sold for a fair price after doing a lot of work to our house so I'd like to feel we got our next  house at a fair price too. I don't know if it's just London  but even as a chain free buyer it feels like the vendor/ agent are always out for a few more grand and it gets to this point in the sale and I get confused, uncertain, feel ripped off and want to walk away.

Nobody wants to pay £30k too much for anything

but you focusing a bit too much on this aspect, 812/780k is a 4% deviation between what you agreed and what a bank in the current climate conservatively estimates.

if you really liked something in a shop that you will use for many many years to come and it costs £104 instead of £100, would you let it go?

its a matter of perspective and in this price range you shld stop focusing on the 30k aspect but focus on the % deviation

I get your scenario, but if I could get it down the road for £4 cheaper I would do that. In fact, that's what everyone does in other scenarios, they tend to shop around. 

One brand of baked beans is so randomly expensive now that I don't buy them. The price has made me shop around for something equally as tasty and they've lost my business.

 It's the randomness that's the problem. And I think the housing market is like that. There's no logic or sense to asking prices, and it makes people question and feel uncomfortable.

There are people who will always not question and buy a brand of beans they're happy with, even if they pay more for no other reason than they're happy with that brand. This might just be habit or a load of other justifications. It depends how you are wired and your experiences.

If there was just one tin of beans for 20 miles and the price was more, I'd probably buy spaghetti.

You can apply this to big purchases, jobs, holidays, cars etc. 

It's this, it's my cold feet/ sense of being done over kicking in at the last minute, now for the second time in 3 months. It's a game I want to have a fighting chance at now in my middle age. I'm also aware this house needs a ton of work. Yes we can afford it although some will need to be long term. But it's the knowledge that there won't be a huge queue of people wanting this house that strongly tempts me into testing the seller and makes me feel "how dare you for not selling it cheaper to us". Bit stupid...

How long are you willing to wait for something else to come onto the market that you like?

A tin of beans is a very poor example to use. One tin of beans is exactly the same as another tin of beans a few doors down. But houses are not like that. Every house is individual. There is no "standard" asking price system because each property is so very unique.

The majority of housing in the UK isn`t "unique" in any way, there are millions of flats, new-builds and terraces, all built to more or less the same blueprint, most people buying will find something else if the seller is too difficult.

I think you and @lookstraightahead are very wrong on this, there are relatively few genuinely identical properties in the UK and an even smaller percentage are actually available to buy at any one time. Buying a home is nothing like buying a tin of beans.

Regardless, the OP is not interested in the majority of housing in the UK, they're interested in an £800k property in a particular part of London and as they say "other houses around have sold for much more but have been modernised and extended" so finding something else is much more difficult than you are claiming...

Dude, have you seen the rows of terraced houses in the northwest??

Have you seen inside them?

They will all be different. They may have started out as identical properties when they were built but a succession of owners will have each put their own mark and stamp on them. Most will be remodelled inside, have had extensions, kitchens and bathrooms moved etc.

Even two one year old properties that were "out of the box" very similar (they wouldn't be exactly the same as they are on different plots) would be completely different after their first owners have lived with them for 12 months.

This won`t make a major difference to the price though, in fact it could scare buyers away if they don`t like what you have done, or lead to lower offers as people cost for the work to change someone`s "re-modelling". People mainly look at price, location, size, and more so now than before - the cost of borrowing/monthly payments - to most people an estate of new-build three beds is essentially the same house, although to be fair things like how much sun a house gets, parking, how close to shops or decent distance from busy roads etc. will play a part in people`s decision making.

Sarah1Mitty2

mi-key said:

That is a good point. There isn't really any such thing as overpaying for a used house. 

You only know exactly what your house is worth when you come to sell it. You may have paid £30K more than your next door neighour for the 'same' house, but if you sell 3 years after he does, and you get £50K more than he did, then have you overpaid? 

The only time it would happen is if there were two exactly comparable houses for sale at the same time, and you bought one then someone else bought the other for less than you, and that hardly ever happens.

 "Overpaid" is really a subjective concept, someone who loves a house and enjoyed living in it might think getting 50k less when they sell isn`t a problem, it is like giving a landlord a deposit, after many years the deposit is equivalent to pennies extra a month on the rent and it isn`t a "loss" if you don`t get it back.

nuhopper

If anyone is interested in an update, we decided not to pursue this house. It's now been put back on the market at 880k, 20k less than original asking. (During discussions, they refused to go under 910k for us when we questioned the bank's valuation pf 875k)

Sarah1Mitty2

https://forums.moneysavingexpert.com/discussion/comment/80026109#Comment_80026109

Good move, sounds like this seller doesn`t yet quite "get it" that the market has changed.

MobileSaver

https://forums.moneysavingexpert.com/discussion/comment/80027062#Comment_80027062

By "changed", do you mean that house prices are increasing again as confirmed by the Nationwide? 😂

house prices rose 0.5 percent in April, the first month of increase in eight, which could indicate some potential stabilization in the market

Sarah1Mitty2

https://forums.moneysavingexpert.com/discussion/comment/80027122#Comment_80027122

I was thinking more about actual sales being down 20% and the OP`s seller being caught out by this, hence the need to cut their price further. I think we can agree that the OP`s seller`s house price is going down and they are being difficult about this so the OP did the best thing by walking away?

Sunsaru

https://forums.moneysavingexpert.com/discussion/comment/80026109#Comment_80026109

If it was me, I'd go back and offer 870k just to rub a bit of salt in….