Offering asking price in hope surveyer undervalues

eddddy

gwynlas said:

The EA  works for the seller so must have had some input into the asking price...

The OP is selling their property and buying another one.

I suspect the EA in question is the one working for the OP - not the EA working for the seller (But maybe the OP can clarify.)

But either way, it's just a tactic by the EA to get the OP invested in the purchase. The EA is hoping that the following will happen:

• The OP offers asking price - with the intention of reducing it by 15% later
• The OP pays mortgage application fees
• The OP pays legal fees and search fees
• The OP gets excited about their new home

• The seller pays mortgage application fees for their onward purchase
• The seller pays legal fees and search fees for their onward purchase
• The seller gets excited about their onward purchase

Now whatever happens at the valuation stage - e.g. valued at asking price; at 5% below asking price; at 10% below asking price; at 15% below asking price - the EAs have 2 people heavily invested and committed to the transaction.

The EAs will be hoping that after valuation, it will be much easier to...

• Persuade the OP to pay 5%, 10% or 15% more than they hoped to at the outset, and/or

• Persuade the seller to accept 5%, 10% or 15% less than the original offer

user1977

Herzlos said:

Is there a Home Report? What does it put the value at?

Nothing in the OP's posts so far suggests they're buying in Scotland.

NameUnavailable

The vendor might be asking £280K because that's what they need to afford whatever they want next. It might be unrealistic and they might end up not moving as a result.

If the price is unrealistic then the mortgage valuation should come back down valued, but that doesn't mean the vendors will accept whatever the figure is, or any less than asking price. Try it by all means but be prepared to lose whatever it costs you to get that far.

TSmith92

ThisIsWeird said:

Hi TS.
Has the EA given you any hints for why the vendor is asking seemingly too high a price? 
It might make a difference when it comes to your plan. If, for example, they need the high amount in order to move on -  eg buy a more expensive property - then I guess they'll stick to it, and just not sell unless the sum is realised. But if they are simply deluded about the value and condition of their beloved house, then possibly a frank report might sober them up a bit.
It might not make any difference to their decision, but possibly one 'reason' has a slightly better chance of being negotiated with.

The house has been inherited I think. So no chain. We feel we have been generous with our offer and was hoping the seller would come to a compromise and meet us half way. 

Herzlos

user1977 said:

Herzlos said:

Is there a Home Report? What does it put the value at?

Nothing in the OP's posts so far suggests they're buying in Scotland.

My bad, I thought it was required in England too.

Elliott.T123

What level of price reduction are you hoping to achieve with this tactic and what will you do if it doesn't work out?

If they refused to negotiate at all on the initial asking price then I would be absolutely shocked if they all of a suddenly decided to drop £30k due to the valuation. What if they say ok we will drop £5k

What if the valuation comes back saying it is worth the price that has been agreed, will you proceed on that basis?

TSmith92

Elliott.T123 said:

What level of price reduction are you hoping to achieve with this tactic and what will you do if it doesn't work out?

If they refused to negotiate at all on the initial asking price then I would be absolutely shocked if they all of a suddenly decided to drop £30k due to the valuation. What if they say ok we will drop £5k

What if the valuation comes back saying it is worth the price that has been agreed, will you proceed on that basis?

Well this is the dilemma. I think we would have to proceed as we love the house. If nothing in the street has sold for anything close to this price, plus in a worse state then some of the other houses on the street. Surely it can't be worth the asking price! 

Sistergold

If you are happy to proceed then there is nothing wrong with you hoping for a down valuation 🤷‍♀️. If it should be down valued then you re-negotiate, they might agree they might not. I suspect you might find some people are more unrealistic about value when it’s an inheritance as it might be their only chance to get a chunk of money. Also with an inheritance if more than one person is involved there is likely to be an unreasonable or greedy relative who has already planned what they will do after they get their x amount. If you love the house then at that point you might just cough up the asking price. You will find though there are many “more ideal” house just waiting to be listed. There is truly more than one dream house if you don’t want to overpay! 

Bigphil1474

When I sold my dad's house in July, as his executor, I ended up getting more than it was originally valued at as the first buyer pulled out. It was originally for sale at £138k in November 2022, we were offered £132k by a cash seller, which I accepted, as my dad had specified that we find a suitable buyer rather than worry about the price. Unfortunately, he couldn't prove where his funds came from and got fed up so pulled out. We then remarketed it at £135k in February, and got two offers, and accepted £140k. The guy who missed out was really cheesed off as he said it was his perfect house in perfect location, but we couldn't do anything about it. 

lookstraightahead

Sistergold said:

If you are happy to proceed then there is nothing wrong with you hoping for a down valuation 🤷‍♀️. If it should be down valued then you re-negotiate, they might agree they might not. I suspect you might find some people are more unrealistic about value when it’s an inheritance as it might be their only chance to get a chunk of money. Also with an inheritance if more than one person is involved there is likely to be an unreasonable or greedy relative who has already planned what they will do after they get their x amount. If you love the house then at that point you might just cough up the asking price. You will find though there are many “more ideal” house just waiting to be listed. There is truly more than one dream house if you don’t want to overpay! 

I agree with this