Asking price price accepted but now think it's overvalued, torn between surveys to get a valuation

MegaLeon

Hi all,

I put an offer on a ex-council flat for its asking price of 545k which I now believe was overvalued. Reason for that was researching market prices for the other flats in the estate which have sold for 465k to 530k in the last 10 years (during the which flat prices haven't fluctuated much from what I can see, on top of ex-council properties appreciating slower than other properties); and the fact that the offer was accepted on the same day, after the property was on the market for ~20 days (according to the EA they had "a plan for a different offer level" and another offer with a substantially higher deposit, but obviously wary of any word coming out of an EA's mouth). We are both chain-free and I'm a FTB.

I think a price of 530k would be more realistic for the place, and I do appreciate the seller wanting to make a profit (they bought in 2014 for 500k). I'd love to have something to back me up when I potentially open this discussion. Problem is my mortgage lender complete an "automated valuation" and simply accepted my required borrowing amount. I have a level 3 survey paid for and ready to go, but it doesn't come with a valuation. I'm torn deciding on wether to switch it to a level 2 which includes it, but then again I'd appreciate the throughness of the level 3 in regards to the state of the flat and potential repairs cost.

Or should I try and open the discussion now / earlier (it's been 2 weeks since offer was accepted)? I don't want to risk overly alienating the seller as I think the property would be the right place for me at this point in time and would like to go through the sale, and I realize my research and this negotation should have happened at the offer stage (which was 2 weeks ago now) and this is mostly on me being a newbie at this game, and whilst I do feel a bit like a !!!!!! bringing it up now, at the same time I can't shake the sour taste off. I do realize 15k is pennies in the grand scheme of things but that extra money (I would scale down the deposit accordingly to keep the montly payments the same, mortage advisor already mentioned that won't be an issue with my accepted mortgage offer, plus I'd also get reduction in the FTB stamp duty) would be a non-trivial addition to a furniture/redecorating fund.

Any advice is appreciated!

Mildreds_Earrings

Hello there, my advice would be to open the discussion now and provide your reasons for reducing the offer.

I'd hate to accept an offer, then find out several weeks later the Buyer wanted to reduce their offer now but actually decided two weeks in, when I could have chosen to decline and re-market. Early dialogue is always appreciated. The Seller's options are yes, no or let's negotiate. All the best. 

jimbog

What sort of lease is remaining on the property? Are you happy with the service charges?

njkmr

Personally I would have checked sold prices prior to viewing initially.
Then you would have been more aware of its value before making your offer.
However , if your not happy paying that then it's your perogative to reduce your offer.
Give your reasons and see what happens. Don't ask , don't get as they say.
Good luck.

Keep_pedalling

Start the conversation by all means., but be prepared for them to put it straight back on the market. 

redofromstart

I, like others, would walk away on principle and put the property back on the market, but far better to tell them now than further on in the process when all parties have spent money on surveys etc. 

user1977

£530-545k is all the same ballpark, I doubt you're going to find convincing evidence that either end is "correct" or wrong.

fullyrendered

Get the survey done, not sure why you can't add a valuation onto a Level 3, and more importantly for a flat you need to know the freeholder's plan for future works that you have to pay towards, this information should come to you in the LPE1 responses.

FlorayG

Anything is only worth what someone is willing to pay for it
If it's absolutely perfect for you then suck it up and pay the agreed amount
If you are uncertain then reduce your offer and be prepared for the seller to say NO and either require you to stick to the original offer or take it from you and re-market; would you be happy with the latter decision or would you be kicking yourself for evermore because you lost the perfect home?

silvercar

I’m curious what a level 3 survey on a flat includes. Does it include a report on the state of the block? 

As for your offer, I don’t know how you justify a price reduction before a survey. What reason do you have to drop the offer price, given nothing has changed between now and when you made the offer? If I was your seller and you reduced the offer now, I would think that you are going to reduce further after survey and at exchange. I’d remarket.

prowla

You haven't entered into a binding aghreement and you can ask what you like.

The seller can, of course, reject your re-offer.

I don't think that referring back 10 years is relevant; the current price of similar properties in the area would be more appropriate.