Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • FTBNow
    • By FTBNow 17th May 18, 12:23 PM
    • 120Posts
    • 78Thanks
    FTBNow
    Property valuation
    • #1
    • 17th May 18, 12:23 PM
    Property valuation 17th May 18 at 12:23 PM
    Hi folks!

    Looking for a bit of advice here...

    As background, me and my partner had a bid accepted on a house: it was put up for 144,950 and we went up to 161,000 (this was due to a bidding war involving us and two other FTBs). It was still within our budget, and to be honest we fell so in love with the house that we were willing to pay it. We were told by the estate agents at the time that the house was put on the market for lower in the hope this would happen as the sellers were looking for a quick sale (due to finding a property) and the 144,950 tag would attract more interest - how true this is now and how much was estate agent jargon is beyond me.

    Fast forward a month, and we've received the OK from Santander for a mortgage except for one factor: the property has been undervalued by 16,000 to - surprise surprise - 145,000. We phoned up the estate agent who said they'd do all they can, but when our MA phoned he was spun a yarn that there was a 160,000 cash buyer below us. How true this is I'm not sure - in my eyes if there was a cash buyer then the vendors would have gone with them for a quicker sale.

    We've been told by the MA not to pay for an extra surveyor as the result would be the same, and also not to appeal as all recent sales in area have been around the 130,000-140,000 mark.

    We've written and posted a letter to the vendors, but we unfortunately just do not have the extra 16,000 to make up the difference sitting in the bank .

    Has anyone else got experience and been in this situation? I sent a letter as I don't trust the estate agents as far as I can throw them.
Page 1
    • spadoosh
    • By spadoosh 17th May 18, 12:31 PM
    • 5,746 Posts
    • 7,881 Thanks
    spadoosh
    • #2
    • 17th May 18, 12:31 PM
    • #2
    • 17th May 18, 12:31 PM
    Youre probably not in a good situation. If the bank wont lend you the additional money you have to find it yourself, if you cant, you cant offer that much for the property.

    There might or might not be other buyers, i suspect you will find out for sure soon enough when the sellers realise youre not in a position to proceed, theyll either take the next offer and youll never see the house again (on RM) or it will be relisted, which suggest there are no other buyers.

    Be wary of bidding more than asking price for properties. Its not too common for valuations to be given higher than what someone is asking for for a property, it can happen and the house could actually be worth 161,000 but then the lender doesnt want to take a risk when you might simply be an over excited buyer paying too much for a house, ie its not just them theyre covering although they are their priority.
    Don't be angry!
    • FTBNow
    • By FTBNow 17th May 18, 12:37 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    • #3
    • 17th May 18, 12:37 PM
    • #3
    • 17th May 18, 12:37 PM
    To be honest it has happened to us with every property we've bidded on: this was our third, and every other one went 10k-15k above the asking price (we ourselves would bid asking price).
    • spadoosh
    • By spadoosh 17th May 18, 1:09 PM
    • 5,746 Posts
    • 7,881 Thanks
    spadoosh
    • #4
    • 17th May 18, 1:09 PM
    • #4
    • 17th May 18, 1:09 PM
    Sounds like youre in a particularly active area, if similar houses have sold recently around the 130-140 mark though the valuations dont appear to be catching up with the demand.

    Looking at cheaper houses probably wont be too effective as the valuations would generally stick around the asking prices so if theyre still going to offers over youll still need to find money to pay the difference.

    Unfortunately it sounds like youll be waiting until either you find somewhere that the lender will match that valuation to or relying on few to no other bidders.

    Properties that have been on the market longer tend to have less interest, they could be a traget but then theres normally a reason why theyve been on the market longer (ie overpriced or not desirable)

    As depressing as my posts are, try not to be too disheartened, time to reflect on a very expensive purchase is rarely a bad thing. Getting a mortgage as big as the value of the house is normally always a bad thing.
    Don't be angry!
    • FTBNow
    • By FTBNow 17th May 18, 1:20 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    • #5
    • 17th May 18, 1:20 PM
    • #5
    • 17th May 18, 1:20 PM
    Of course spadoosh: I can appreciate your posts entirely! As I said to my partner, there's a lesson to be learned about going so wild over the asking price (and getting drawn into a bidding war) when we can't make up the difference.

    If the worst does happen, then this is a positive move as we're not getting dragged into a house where - if we do decide to sell later down the line - we'll be looking at negative equity on the mortgage. Naturally it's disappointing as we fell completely in love with it, but we have to look at this with a head as well as a heart.

    Whatever happens it's a lesson to be learned. I've just heard back from the agent that the vendor won't accept 145,000 and he's persisting with the 160,000 cash buyer story - so we've offered 148,000 as we can stretch to 1,500 each extra but that's it.
    • FTBNow
    • By FTBNow 17th May 18, 2:06 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    • #6
    • 17th May 18, 2:06 PM
    • #6
    • 17th May 18, 2:06 PM
    So: further developments. We've bid 148,000 as we're willing to put in an extra 3,000 off our own back. It has since become clear from the agent that the cash buyer was a fib (as predicted) and they are in fact FTB's with an 80,000 deposit but no mortgage or mortgage in principle (which sets the sale back 2-3 weeks at least). The inclination of the husband (on the vendor side) is to go for us but he needs to speak to the wife and sleep on it - probably away from nagging agents!

    One thing this has taught me is not to trust estate agents as far as I can throw them....
    • GoingOn30
    • By GoingOn30 17th May 18, 2:51 PM
    • 106 Posts
    • 73 Thanks
    GoingOn30
    • #7
    • 17th May 18, 2:51 PM
    • #7
    • 17th May 18, 2:51 PM
    So no cash buyer outs you in a stronger position but still be aware that if you put 3k in of your own money then you'll still be in negative equity for at least the first 6 months in the property, longer if price fall, longer if interest rates go up.
    Never let the story of a cash buyer pressure you into overstretching yourself. It is so often just a story.
    • FTBNow
    • By FTBNow 17th May 18, 2:55 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    • #8
    • 17th May 18, 2:55 PM
    • #8
    • 17th May 18, 2:55 PM
    We were flat out refused on the 145,000 so used the 3,000 as a bargaining chip really. We knew the cash buyer was just a fallacy - as you say they often are - but our thoughts were this couple could get a mortgage with 60,000 deposit and then use the 20,000 to make up the rest (which is obviously up to them if they want negative equity in the house). That's to say if they're even able to get a mortgage at all.

    Our MA has advised we go to the estate agent and ask what other properties in a 1 mile radius have recently sold for - as the agent also peddled the story that properties are going for 15,000-20,000 above asking price regularly and companies doing the valuations can't keep up. It was eSurv who carried out ours.
    • kingstreet
    • By kingstreet 17th May 18, 3:01 PM
    • 34,346 Posts
    • 18,655 Thanks
    kingstreet
    • #9
    • 17th May 18, 3:01 PM
    • #9
    • 17th May 18, 3:01 PM
    Surveyors use comparables - the recent (last four months) sales of similar property in the vicinity (less than 0.5 miles) and you can see such property by using this;-

    http://www.rightmove.co.uk/house-prices.html
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • FTBNow
    • By FTBNow 17th May 18, 3:20 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    I've had a little look: and it varies from 105,000 to 200,000 for a three bed semi! The last sale in the street we're looking at was 117,000 - but that was six years ago.

    Not sure if it's worth appealing, or paying for another valuation.
    • FTBNow
    • By FTBNow 17th May 18, 4:03 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    Scratch that: we're barely talking over 140,000 in a 0.5 mile vicinity of the full postcode. Looks like the surveyors got it spot on.
    • FTBNow
    • By FTBNow 18th May 18, 12:59 PM
    • 120 Posts
    • 78 Thanks
    FTBNow
    So: the vendors have agreed that we can buy the house for 148,000

    Broker has submitted message to Santander and it has been passed back to underwriters - arghhhh!!

    I'm assuming as we got approved for a 161,000 mortgage (borrowing 152,950) then this is just a formality? Or is it simply that they're underwriting the valuation as opposed to our finances?

    Makes sense to start the underwriting process again if we're changing amounts, I suppose...
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

879Posts Today

6,152Users online

Martin's Twitter
  • Today's FRI Twitter poll: As everyone knows, you're a creative genius with an huge range of highly honed skills.? https://t.co/KV5FHAqK6v

  • Watching Theresa May... seriously would anyone in their right mind truly want her job right now!

  • RT @thecheekypostie: @MartinSLewis Thanks to this, I have just skim read it. To those in Scotland - on page 548, Dounreay is mentioned by n?

  • Follow Martin