Mortgage lender has down valued potential property purchase
Discussion
Totally what you've just said & then some!
I've spoken with the EA, the vendors are desperate to move. (This i already know).
They've offered 2 options:
They pay for us to go to another lender & have a survey done at their cost.
We pay £5k more, they drop £5k & they get £5k off their property they want to buy.
I had to AGAIN explain to the EA the lenders only value the property at £185k so they won't lend on anything more than that so it's pointless going round and round with this, they either find the £15k it's needed to drop by or the deals off. We won't pay a considerable amount more than it's valued at.
I also said they can pay for an additonal survey but the broker is saying it's pointless (which i agree with) & so did the EA come the end of the phone call.
I offered to pay half their EA fees in cash (circa £1500) to get the deal done.
But other than that i can't see this happening now, we're just too far apart.
I've spoken with the EA, the vendors are desperate to move. (This i already know).
They've offered 2 options:
They pay for us to go to another lender & have a survey done at their cost.
We pay £5k more, they drop £5k & they get £5k off their property they want to buy.
I had to AGAIN explain to the EA the lenders only value the property at £185k so they won't lend on anything more than that so it's pointless going round and round with this, they either find the £15k it's needed to drop by or the deals off. We won't pay a considerable amount more than it's valued at.
I also said they can pay for an additonal survey but the broker is saying it's pointless (which i agree with) & so did the EA come the end of the phone call.
I offered to pay half their EA fees in cash (circa £1500) to get the deal done.
But other than that i can't see this happening now, we're just too far apart.
We were quite lucky. We needed a house as we are being pushed out of ours at the end of this month and the EA (who realised that they had over valued it) pushed the Seller's to sell to us at £320k rather than the £325k the were originally prepared to come down to. Telling them that it is a case of Drop or we walk can often get the result you need IF the circumstances are right. Usually this is when the seller has bought another house and really does need to sell theirs, and cannot wait for another buyer.
This worked in our favour, plus as FTB's there was never going to be any issues from our end once the mortgage had been agreed. We exchanged on Tuesday.
If you do not need to move out of yours, then either hold on until they drop, or walk and find something else suitable. Stressing over a house purchase when you're in situation that you cannot control is wasted energy.
This worked in our favour, plus as FTB's there was never going to be any issues from our end once the mortgage had been agreed. We exchanged on Tuesday.
If you do not need to move out of yours, then either hold on until they drop, or walk and find something else suitable. Stressing over a house purchase when you're in situation that you cannot control is wasted energy.
We're both FTB with no chain, so they know we're serious as everything was going swimmingly until the valuation!
I think personally looking at it now being offered the £185 is a banging deal, not a lot of people would offer bang on what it's worth.
I've given them until lunchtime to give us a definitive answer or the deals off.
I'll keep updating the thread.
I think personally looking at it now being offered the £185 is a banging deal, not a lot of people would offer bang on what it's worth.
I've given them until lunchtime to give us a definitive answer or the deals off.
I'll keep updating the thread.
theguvernor15 said:
We're both FTB with no chain, so they know we're serious as everything was going swimmingly until the valuation!
I think personally looking at it now being offered the £185 is a banging deal, not a lot of people would offer bang on what it's worth.
I've given them until lunchtime to give us a definitive answer or the deals off.
I'll keep updating the thread.
I think that's the best approach. There are more houses out there (not where I am though, hence why I had to buy this house ).I think personally looking at it now being offered the £185 is a banging deal, not a lot of people would offer bang on what it's worth.
I've given them until lunchtime to give us a definitive answer or the deals off.
I'll keep updating the thread.
Good luck!
The main thing I've learned having spent much of the last 3 years trying to move house is that when it comes to property and the sums of money involved, no one ever plays a straight hand no matter how nice, cooperative and amenable they seem at first.
In our case we had a low but fair market value offer accepted (560 vs ask of 585, down from 620 after 3 months and 1 fallen through sale), only for the sellers who were 'very motivated' to mysteriously lose the place they had lined up and then say they would go to rented in the interim to keep it moving... only for a month to pass with no progress and then the discovery/realization that they had no intention of renting unless we upped to the asking price, which we had all previously agreed was fair. In the end after spelling the situation out to the EA (we're as good as it gets, take it or leave it) we walked. This was Christmas. Property is still on the market, back at 600+. Dreamers.
You only really find out what everyone's holding when you call their bluff and force a decision, which in my case and yours from the sound of it, is to be prepared to walk away and start again. Then if they come back, you suddenly find yourself holding all the aces.
In our case we had a low but fair market value offer accepted (560 vs ask of 585, down from 620 after 3 months and 1 fallen through sale), only for the sellers who were 'very motivated' to mysteriously lose the place they had lined up and then say they would go to rented in the interim to keep it moving... only for a month to pass with no progress and then the discovery/realization that they had no intention of renting unless we upped to the asking price, which we had all previously agreed was fair. In the end after spelling the situation out to the EA (we're as good as it gets, take it or leave it) we walked. This was Christmas. Property is still on the market, back at 600+. Dreamers.
You only really find out what everyone's holding when you call their bluff and force a decision, which in my case and yours from the sound of it, is to be prepared to walk away and start again. Then if they come back, you suddenly find yourself holding all the aces.
What i did learn was the vendors had made the offer on the property before theirs sold (was even up for sale), hence the mad rush.
They then had 2 offers fall through, so they've been more flexible with the price this time around.
As i said, nothing more we can do, making the deal happen is up to them & they've got until Monday to get it done or we walk & they know this now.
They then had 2 offers fall through, so they've been more flexible with the price this time around.
As i said, nothing more we can do, making the deal happen is up to them & they've got until Monday to get it done or we walk & they know this now.
hornetrider said:
PositronicRay said:
What does Zoopla give it?
Forget zoopla. I managed to up the zoopla value of our last place by 25k just by making some edits on their website regarding work done to the house. Didn't have to prove anything and I could have been anybody! Worthless!My other half used to be an EA so knows how the game works. Our house is relatively unique - only 4 other comparables within half a mile radius, and none have sold in the last 2 years, besides ours when we bought it, so we knew the mortgage valuation would be very low due to no comparables.
We've recently remortgaged after the fixed term expired, but to reduce the LTV we needed to see a return on the work we've already put in to it. We updated Zoopla towards the end of last year, and lo and behold when the mortgage valuation came back, it was with £200 of the new Zoopla value - albeit we were still quite conservative with the details so as not to appear to over-valuing it.
Since that, one of the few comparables has gone on the market, at £40k over the current Zoopla valuation.
That exercise saved us around £200 per month due to the better LTV rate.
So as a small update, from Friday eve it was left the vendors were trying to find the additional £15k.
I got a call this morning to say they'd found £10k of it but couldn't raise anymore, (so we were still £3k adrift).
I offered an additional £1k, however was told it wasn't enough.
I thanked the EA for their efforts but said the money tap was now dry.
I then put it in writing to them, confirming that we can't afford anymore & the deal was off, however if they wanted to sell at the agreed amount (£2k short still) we would be open to the idea.
Within 10 minutes i had a call saying they'd increased their mortgage again to cover the difference. (A bit convenient).
However in the grand scheme of things we're paying less before & overall for something we really, really want.
So currently we're back on, i've been told it should all move pretty darn quickly from here onwaeds.
I got a call this morning to say they'd found £10k of it but couldn't raise anymore, (so we were still £3k adrift).
I offered an additional £1k, however was told it wasn't enough.
I thanked the EA for their efforts but said the money tap was now dry.
I then put it in writing to them, confirming that we can't afford anymore & the deal was off, however if they wanted to sell at the agreed amount (£2k short still) we would be open to the idea.
Within 10 minutes i had a call saying they'd increased their mortgage again to cover the difference. (A bit convenient).
However in the grand scheme of things we're paying less before & overall for something we really, really want.
So currently we're back on, i've been told it should all move pretty darn quickly from here onwaeds.
theguvernor15 said:
So as a small update, from Friday eve it was left the vendors were trying to find the additional £15k.
I got a call this morning to say they'd found £10k of it but couldn't raise anymore, (so we were still £3k adrift).
I offered an additional £1k, however was told it wasn't enough.
I thanked the EA for their efforts but said the money tap was now dry.
I then put it in writing to them, confirming that we can't afford anymore & the deal was off, however if they wanted to sell at the agreed amount (£2k short still) we would be open to the idea.
Within 10 minutes i had a call saying they'd increased their mortgage again to cover the difference. (A bit convenient).
However in the grand scheme of things we're paying less before & overall for something we really, really want.
So currently we're back on, i've been told it should all move pretty darn quickly from here onwaeds.
So there you go then.I got a call this morning to say they'd found £10k of it but couldn't raise anymore, (so we were still £3k adrift).
I offered an additional £1k, however was told it wasn't enough.
I thanked the EA for their efforts but said the money tap was now dry.
I then put it in writing to them, confirming that we can't afford anymore & the deal was off, however if they wanted to sell at the agreed amount (£2k short still) we would be open to the idea.
Within 10 minutes i had a call saying they'd increased their mortgage again to cover the difference. (A bit convenient).
However in the grand scheme of things we're paying less before & overall for something we really, really want.
So currently we're back on, i've been told it should all move pretty darn quickly from here onwaeds.
The valuer was right, and armed with that information you've bagged the house for a fair bit less than you would otherwise have paid.
I know it doesn't feel like a big victory because you've still paid 'market price'... in fact (and this always annoys people!) you've ended up paying more than anyone else would have done at this moment in time. Welcome to the world of house-buying...
So... make it nice, add some value and enjoy it - and in a few years time, look back and be thankful you didn't pay what you'd offered.
I had my old house valued for remortgage twice within 3 months and the second time the non-local surveyor valued it at £15K less, and that was after extra work had been done on the property... 
We challenged the valuation with proof of similar local property sales, but it just went back to the same surveyor, who very surprisingly was not willing to admit he had no idea and had got it wrong.
I sold it a year later for £15k more than the first remortgage valuation - go figure.
We challenged the valuation with proof of similar local property sales, but it just went back to the same surveyor, who very surprisingly was not willing to admit he had no idea and had got it wrong.
I sold it a year later for £15k more than the first remortgage valuation - go figure.
timetex said:
The valuer was right, and armed with that information you've bagged the house for a fair bit less than you would otherwise have paid.
I'm not sure we do know the valuer was right. We know the vendor has reduced the price. Down valuations, quite rightly from the lenders point of view, seem more common with high LTV.
At what point does the figure people are prepared to pay become the market value? If this isn't taken into account house prices wouldn't rise.
Whatever, great news from the OP point of view.
C Lee Farquar said:
I'm not sure we do know the valuer was right. We know the vendor has reduced the price.
Down valuations, quite rightly from the lenders point of view, seem more common with high LTV.
At what point does the figure people are prepared to pay become the market value? If this isn't taken into account house prices wouldn't rise.
Whatever, great news from the OP point of view.
Well that's the point. If the vendor has now reduced his asking price and the buyer is prepared to pay it, then this basically the valuation is a self-fulfilling prophecy and is, by definition, right!Down valuations, quite rightly from the lenders point of view, seem more common with high LTV.
At what point does the figure people are prepared to pay become the market value? If this isn't taken into account house prices wouldn't rise.
Whatever, great news from the OP point of view.
The moral of the story is, if you are the buyer, it pays to use a 'low valuation' to your advantage.
I think, in this situation, the OP (being a slightly 'green' FTB) made an offer based more on the vendor and EA's asking price and comments, and what they were prepared to pay, not based so much on what the property might be worth with local comparisons. Fell in love with the house, and offered based on heart rather than head.
The valuer steps in and says "pay £15k less" (and, for the first time, the OP is getting some 'independent' pricing advice rather than relying on the EA / vendor's setting of the price) and there we go...
There's also the elephant in the room here that house prices have already started to fall a little. They are still up YoY, but price growth is now stagnant or negative, so the valuer may have factored in some market fluctuations to protect the lender's interest especially with the high LTV.
Either way, the OP gets a cheaper house, which means lower mortgage payments for the same property...
Oh i'm a total novice when it comes to home-buying.
When we first viewed i offered the EA £190k - he pretty much told me to foxtrot oscar as every other offer they'd had (& subsequently turned down) had been considerably higher.
Fingers crossed it all goes through now, i was beginning to resent the place a bit.
However on the other side of the coin, we've got the place we really wanted, for less money & with a smaller mortgage!
When we first viewed i offered the EA £190k - he pretty much told me to foxtrot oscar as every other offer they'd had (& subsequently turned down) had been considerably higher.
Fingers crossed it all goes through now, i was beginning to resent the place a bit.
However on the other side of the coin, we've got the place we really wanted, for less money & with a smaller mortgage!
This thread is making me nervous! My mortgage is getting the valuation done this week! house was up for 400k in Jan, no offers dropped to 375k in March we went to view it and made an offer of £367,500 which got accepted and it needs to be valued at minimum of £361,765 for the mortgage to go through!
Valuations are s
t just some one's opinion on what its worth. The whole house buying process is a pain in the arse! you can get a mortgage offer in like 10 days but solicitors are still in the stone ages when it comes to doing stuff.
Valuations are s
t just some one's opinion on what its worth. The whole house buying process is a pain in the arse! you can get a mortgage offer in like 10 days but solicitors are still in the stone ages when it comes to doing stuff. Don't worry, i'm sure it will be fine.
I was really worried about valuation on our place - turns out broker chose not to panic us and before we realised, (5 days after application) the valuation came back at asking.
Part of me thinks it's down to the relationship between the EA and the valuer...maybe thats me being pessimistic but they must get friendly right?!
I was really worried about valuation on our place - turns out broker chose not to panic us and before we realised, (5 days after application) the valuation came back at asking.
Part of me thinks it's down to the relationship between the EA and the valuer...maybe thats me being pessimistic but they must get friendly right?!
What's the best evidence of value between willing buyer and seller? Well often it's the agreed sale price...
Most valuers will start with this in their mind. It's only when they have evidence to show the price is higher than they are prepared to justify that it will get knocked - or if there are value significant defects.
Most valuers will start with this in their mind. It's only when they have evidence to show the price is higher than they are prepared to justify that it will get knocked - or if there are value significant defects.
surveyor said:
What's the best evidence of value between willing buyer and seller? Well often it's the agreed sale price...
Most valuers will start with this in their mind. It's only when they have evidence to show the price is higher than they are prepared to justify that it will get knocked - or if there are value significant defects.
What about if there is evidence of local (or national) price stagnation and prices are beginning to drop? Would they down value based on a trend just starting, in order to protect the mortgage company's investment?Most valuers will start with this in their mind. It's only when they have evidence to show the price is higher than they are prepared to justify that it will get knocked - or if there are value significant defects.
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