Help- mortgage valuation significantly less than offer price

ReadySteadyPop

Hoenir said:

meggles88 said:

ReadySteadyPop said:

meggles88 said:

The property I am purchasing was sold at £206000 in 2017. There is not a lot of historical data due to people not moving. One house 4 bed that sold for £425000 in 2022. Other than that it’s all a bit stagnant down in the southe west! 

I am assuming they have done loads of work that they think doubles the price in that time? Massive red flag I think.

I think they may have been led down the garden path by a very aggressive estate agent unfortunately. We foolishly overbid because we love the house, but this was on the basis that the house would have been valued at £400,000… 

I've never known a vendor knowingly underprice when marketing a property. Must of have been rubbing their hands when the bidding war started. 

LOL, yes, no doubt reality will settle in soon.

meggles88

An update for those who care we settled on the original asking price of £400,000 at this time

pjs493

meggles88 said:

An update for those who care we settled on the original asking price of £400,000 at this time

Thanks for the update. I have been wondering how this would pan out. I’m worried I may find myself in a similar situation as one of the houses I really like looks like it’s doubled in value from when it was last purchased five years ago. If I put an offer in I’m worried my lender will say it has been massively overvalued. Fortunately I have a huge deposit, but I worry they’ll say they won’t lend because it’s only worth what my deposit is. 

Congratulations on your new home. 

meggles88

pjs493 said:

meggles88 said:

An update for those who care we settled on the original asking price of £400,000 at this time

Thanks for the update. I have been wondering how this would pan out. I’m worried I may find myself in a similar situation as one of the houses I really like looks like it’s doubled in value from when it was last purchased five years ago. If I put an offer in I’m worried my lender will say it has been massively overvalued. Fortunately I have a huge deposit, but I worry they’ll say they won’t lend because it’s only worth what my deposit is. 

Congratulations on your new home. 

Thanks we are using some out our deposit to make up the difference between the bank valuation and the final offer. It’s not ideal but when you love a house! Good luck on yours! 

ReadySteadyPop

pjs493 said:

meggles88 said:

An update for those who care we settled on the original asking price of £400,000 at this time

Thanks for the update. I have been wondering how this would pan out. I’m worried I may find myself in a similar situation as one of the houses I really like looks like it’s doubled in value from when it was last purchased five years ago. If I put an offer in I’m worried my lender will say it has been massively overvalued. Fortunately I have a huge deposit, but I worry they’ll say they won’t lend because it’s only worth what my deposit is. 

Congratulations on your new home. 

Doubled in value from five years ago when interest rates were at zero? I think that is very very unlikely and could set you up for a large loss if you did purchase at that price.

pjs493

ReadySteadyPop said:

pjs493 said:

meggles88 said:

An update for those who care we settled on the original asking price of £400,000 at this time

Thanks for the update. I have been wondering how this would pan out. I’m worried I may find myself in a similar situation as one of the houses I really like looks like it’s doubled in value from when it was last purchased five years ago. If I put an offer in I’m worried my lender will say it has been massively overvalued. Fortunately I have a huge deposit, but I worry they’ll say they won’t lend because it’s only worth what my deposit is. 

Congratulations on your new home. 

Doubled in value from five years ago when interest rates were at zero? I think that is very very unlikely and could set you up for a large loss if you did purchase at that price.

Having dug a little deeper it was completely renovated and extended. So potentially could be accurate if someone bought a disaster at auction and completely gutted it and renovated. I need to do more research. 

ReadySteadyPop

pjs493 said:

ReadySteadyPop said:

pjs493 said:

meggles88 said:

An update for those who care we settled on the original asking price of £400,000 at this time

Thanks for the update. I have been wondering how this would pan out. I’m worried I may find myself in a similar situation as one of the houses I really like looks like it’s doubled in value from when it was last purchased five years ago. If I put an offer in I’m worried my lender will say it has been massively overvalued. Fortunately I have a huge deposit, but I worry they’ll say they won’t lend because it’s only worth what my deposit is. 

Congratulations on your new home. 

Doubled in value from five years ago when interest rates were at zero? I think that is very very unlikely and could set you up for a large loss if you did purchase at that price.

Having dug a little deeper it was completely renovated and extended. So potentially could be accurate if someone bought a disaster at auction and completely gutted it and renovated. I need to do more research. 

Fair point, people often overestimate just how much they can add to the price after a makeover though, mainly buyers are looking at size location and price, and might not even like the "makeover"!

Jemma01

ugh, I'm the opposite, HSBC doesn't give two donkeys to valuate the house, because I'm paying most of it.
I'll need someone else to valuate it, and tell me is it worth what I'm offering. If the valuation says it is not worth it, it is crazy to pay all this money for a house that's not worth the price.