valuation much lower than offer accepted!

nuttynutz

Where do we stand! house valued by two agents at £135,000 and £129,500 WE went for £129,500 we accepted offer of £124,500 all going well till their survey came back and states our house now valued at £118,000 our house only been on the market 5 months and leaves us in a position as to where to go now : What can/do we do next ?
We no there is a slow down in the market but where do these figures come from? The survey has come up with no major faults so what do we do as the buyers want our house(ftb) but leaves us short on our next property that an offer has been accepted on and our sellers wont budge on price all surveys done and 3 weeks from exchange ,probably answered the question myself here after reading it back!

merlinthehappypig

It's a difficult situation, but I doubt there is anything much that you can do other than accept the lower price if you want the sale to go ahead.

Your buyer is unlikely to get the mortgage that they need unless they have a pretty good deposit. Even then they are unlikely to want to go ahead paying over the odds.

A friend on mine who is a valuer has been instructed to value at around 10% less than market value, whatever that is these days, to cover the lenders back if prices fall. This might be the case here. Either that or your estate agents were overly optimistic.

Good luck with what you decide.

Gorgeous_George

Four process bubbles:

1. Pull out.
This will kill the chain. Threatening to pull out may force the people that you are buying from to lower their expectations allowing you to:

2. Offer less.
If you can buy your next home for less, your FTBers will be able to buy your house. Otherwise:

3. Take the sting.
Lower the price of your house and make up the difference when you buy the next one. Otherwise:

4. Go to 1.

GG

nuttynutz

Thanks for your replys , the sellers we are buying from have no chain and their property is vacant as they have now moved on so they can probably sit it out and wait which is such a bummer for us

nick22abdn

I think you'll find that the difference in valuations is beacuase the first two were carried out by unqualified estate agents and the last one by a chartered surveyor.

Estate agents are unlikely to be as accurate with their valuations for two reasons - firstly they want you to sell with them and are therefore likely to value high and secondly they haven't had 2/3 years worth of training as RICS people have.

nuttynutz

nick22abdn wrote: »

I think you'll find that the difference in valuations is beacuase the first two were carried out by unqualified estate agents and the last one by a chartered surveyor.

Estate agents are unlikely to be as accurate with their valuations for two reasons - firstly they want you to sell with them and are therefore likely to value high and secondly they haven't had 2/3 years worth of training as RICS people have.

Thanks for your reply but £17,000 between first valuation to last is one hell of a jump dont you think? I understand what you are saying but to me that is way too much of a difference but hey i,m no chartered surveyor!

ManAtHome

It is quite a jump, but the bank have to value it on a "what can we get if selling in a hurry" basis - EAs don't have to carry any financial risk. Maybe the £135k was optimistic, the £130k more realistic, and the "risk loaded" valuation less than 10% off.

Unfortunately a sign of the times - banks have underestimated risk for the last few years, now they're probably overestimating. GGs post has the options, only other thing is whether your buyers are prepared to approach other banks in the hope of a better valuation, but that would cost them.

By the way, have you seen the valuation?

mr.broderick

nuttynutz wrote: »

Where do we stand! house valued by two agents at £135,000 and £129,500 WE went for £129,500 we accepted offer of £124,500 all going well till their survey came back and states our house now valued at £118,000 our house only been on the market 5 months and leaves us in a position as to where to go now : What can/do we do next ?
We no there is a slow down in the market but where do these figures come from? The survey has come up with no major faults so what do we do as the buyers want our house(ftb) but leaves us short on our next property that an offer has been accepted on and our sellers wont budge on price all surveys done and 3 weeks from exchange ,probably answered the question myself here after reading it back!

Wonder if your buyers are getting a high loan to value mortgage ie 100%.
I'd be tempted to say to them "Either you get a new lender or i'll get a new buyer".

daveyjp

"secondly they haven't had 2/3 years worth of training as RICS people have."

Make that 6-8 years! Been there done that.

Lower valuations will become more common as house prices drop and more properties are repossessed.

Valuers act for the bank and need to protect their position and at the moment everything around housebuying is looking in a sorry state - FTBs priced out, HIPS, shortage of properties, repos up, prices falling, credit crunch etc etc.

If the valuer was around during the last slump he will be more than aware of how many valuers were sued a few years afterwards for giving unrealistic valuations.

bathgatebuyer

nuttynutz wrote: »

Thanks for your reply but £17,000 between first valuation to last is one hell of a jump dont you think? I understand what you are saying but to me that is way too much of a difference but hey i,m no chartered surveyor!

Surveyors usually produce more conservative valuations than estate agents given that the estate agent has a vested interest in the value obtained, and securing an instruction in the first place. Surveyors don't - regardless of the valuation they produce, they'll get their fee and can, therefore, feel free to give their genuine assessment of value.

And being a surveyor isn't all it's cracked up to be

bathgatebuyer

Daveyjp, sorry - my thoughts crossed with yours!