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Buyers Surveyor undervalued our house

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Edited by:"borat1234"Found 17th Aug 2017
Hi,

we advertised our our house for £216,000 and after a couple of counter offers accepted £220,000. We did have an offer that was £3k higher but felt the £220,000 buyers position was better.

Their survey has been out yeatersay and valued at £210,000. They've reduced their offer to that much and refused to offer a penny more.

i appreciate where they're coming from, but I know how strong the market in my town is especially as we had a higher offer.

My understanding is that as long as the buyer has enough equity in their property and can get a decent mortgage they can still continue with the sale? But their mortgage and ltv would only go against the banks price. So in effect £10k of their equity would go into the 'extra' they're paying for our house. Is that correct?

what are people's thoughts? Our estate agent is contacting the couple who placed the higher offer to see if they're still interested but it may well be that we end up in the same position after their survey comes out.

Thanks in advance for any advice given
Dan

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16 Comments

they offered 220 for a house you valued 216 and now they refuse to pay more than it's valued at

stupid people

I'd tell them to stick it

murtgurge31 m ago

they offered 220 for a house you valued 216 and now they refuse to pay …they offered 220 for a house you valued 216 and now they refuse to pay more than it's valued at stupid people


.......or it's very possible they don't have enough savings/equity left over to make up the 10k difference.

You rejected a 3k higher offer....

Looks like your trying to be too clever with guessing the buyers financial situation, bad move IMHO, don't get too involved, its a business deal, hopefully the higher bidder will still be interested, if not, sit tight, you've stated the market is strong in your area, be patient.

(I'm guessing your England/Wales?, property selling is a dated process in comparison to Scotland IMO)

Is it an option for you to conduct your own survey, and made available to all potential buyers..? they (surveyors) may be more likely to lean your way and over-estimate as opposed to under-estimate (certainly used to work that way)

Original Poster

andynicol20 m ago

You rejected a 3k higher offer.... Looks like your trying to be …You rejected a 3k higher offer.... Looks like your trying to be too clever with guessing the buyers financial situation, bad move IMHO, don't get too involved, its a business deal, hopefully the higher bidder will still be interested, if not, sit tight, you've stated the market is strong in your area, be patient.(I'm guessing your England/Wales?, property selling is a dated process in comparison to Scotland IMO)Is it an option for you to conduct your own survey, and made available to all potential buyers..? they (surveyors) may be more likely to lean your way and over-estimate as opposed to under-estimate (certainly used to work that way)




The higher bidder couldn't provide a mortgage in principle or proof of deposit for 6 weeks. So that may well have not come through, meaning I would have lost the other strong offer. So I aired on the side of caution. Maybe it was wrong, but based on the best choice at the time.

Yes I'm in England,and unfortunately any survey I produced wouldn't be even looked at.

borat123411 m ago

The higher bidder couldn't provide a mortgage in principle or proof of …The higher bidder couldn't provide a mortgage in principle or proof of deposit for 6 weeks. So that may well have not come through, meaning I would have lost the other strong offer. So I aired on the side of caution. Maybe it was wrong, but based on the best choice at the time. Yes I'm in England,and unfortunately any survey I produced wouldn't be even looked at.


Without knowing where your valuation came from, how much your willing to accept and how soon you want to sell, the best advice I can give would be to be patient.

If you accepted the higher offer, theres always the chance of strong buyers submitting offers during this process, thus giving you the option of opting with, who you think is, the better positioned buyer....

Take the offer and run (provided the survey is pukka ) . Property everywhere is overvalued ( mind you I thought that 10 years ago ) values are dropping in most of the country .

Ask yourself - would YOU pay £220K for a property your surveyor says is only worth £210 K ? - I know I wouldn't - and obviously if a mortgage is involved (despite what the potential buyer has told you ) they may not be able to afford the £10K above valuation
Edited by: "rogparki" 17th Aug 2017

The valuation is irrelevant in the grand scheme of things.

If your buyer has a mortgage in principal and they are allowed to spend say £220k from the mortgage company, and the survey has valued it at £210k, the mortgage company doesn't reduce how much it is willing to lend them, they still can have £220k (in case they find another house)

The issue rises from the fact that if the buyer doesn't pay his mortgage and they evict and repossess the house, the mortgage company then has a house worth £210k and they have lent out £220k so the mortgage company then has no way to recoup the loss.

I suspect that the mortgage company wants them to put down a greater deposit to cover the extra risk for them, which your buyer is unwilling to do so has asked you to absorb this risk cost by accepting a lower offer.

Don't accept the lower offer! Either they will find the extra or someone else will. Someone else might be with a different mortgage company and their valuer might agree with you and value it more!

Stick to your guns!

ThePasty46 m ago

The valuation is irrelevant in the grand scheme of things.If your buyer …The valuation is irrelevant in the grand scheme of things.If your buyer has a mortgage in principal and they are allowed to spend say £220k from the mortgage company, and the survey has valued it at £210k, the mortgage company doesn't reduce how much it is willing to lend them, they still can have £220k (in case they find another house)The issue rises from the fact that if the buyer doesn't pay his mortgage and they evict and repossess the house, the mortgage company then has a house worth £210k and they have lent out £220k so the mortgage company then has no way to recoup the loss. I suspect that the mortgage company wants them to put down a greater deposit to cover the extra risk for them, which your buyer is unwilling to do so has asked you to absorb this risk cost by accepting a lower offer.Don't accept the lower offer! Either they will find the extra or someone else will. Someone else might be with a different mortgage company and their valuer might agree with you and value it more!Stick to your guns!


The valuation is completely relevant.

In this case of a property being valued at £210k, mortgage lenders will offer up to that valuation, i.e. 100%, but could even be as low as 70% depending on the applicants circumstances, the days are, thankfully, gone for now of mortgage lenders handing 120%+ mortgages.
Edited by: "andynicol" 17th Aug 2017

ThePasty51 m ago

The valuation is irrelevant in the grand scheme of things.If your buyer …The valuation is irrelevant in the grand scheme of things.If your buyer has a mortgage in principal and they are allowed to spend say £220k from the mortgage company, and the survey has valued it at £210k, the mortgage company doesn't reduce how much it is willing to lend them, they still can have £220k (in case they find another house)The issue rises from the fact that if the buyer doesn't pay his mortgage and they evict and repossess the house, the mortgage company then has a house worth £210k and they have lent out £220k so the mortgage company then has no way to recoup the loss. I suspect that the mortgage company wants them to put down a greater deposit to cover the extra risk for them, which your buyer is unwilling to do so has asked you to absorb this risk cost by accepting a lower offer.Don't accept the lower offer! Either they will find the extra or someone else will. Someone else might be with a different mortgage company and their valuer might agree with you and value it more!Stick to your guns!


I don't know of any companies that will offer over 100% ltv. If you have agreement in principle for £220k it would be for up to £220k. If the house is worth less than that, it would be the surveyor's value. Yes you can have up to £220k but not on a house worth less than that. I'm not aware that anyone has done 100%+ mortgages in many a long year

Folks are missing the point ,The Pasty in particular . No one has said anything about 100% mortgage - If its an 80% mortgage, say on £220K the mortgage advance will be £176K , but the advance on a £210K valuation would only be £168K - So even on an 80% mortgage the buyer has to find an extra £8K .

Think you have come to the wrong place asking advice . I repeat that I personally wouldn't be comfortable paying £220K for a property valued at £210K whether there are mortgage constraints or not .

rogparki1 h, 34 m ago

Folks are missing the point ,The Pasty in particular . No one has said …Folks are missing the point ,The Pasty in particular . No one has said anything about 100% mortgage - If its an 80% mortgage, say on £220K the mortgage advance will be £176K , but the advance on a £210K valuation would only be £168K - So even on an 80% mortgage the buyer has to find an extra £8K .Think you have come to the wrong place asking advice . I repeat that I personally wouldn't be comfortable paying £220K for a property valued at £210K whether there are mortgage constraints or not .

£8k?

80% mortgage on a valuation of £210K would see the purchaser having to raise £42K as the mortgage would be for £168K.

£168K + £42K = £210K



Re paying over the valuation price, it's all about the property and the position the buyer(s) are in.

Attractive properties in sought after areas regularly sell for more than the valuation.

Not sure what the question is, but they want to buy at that lower price and you either sell or pull out. Quite simple isnt it? They obviously believe the surveyor has a better gauge on the price (stupid as surveyors tend to undervalue properties to protect themselves). The buyer probably can't stump up the extra money as their mortgage offer has reduced or they are just trying it on

rogparki7 h, 32 m ago

Folks are missing the point ,The Pasty in particular . No one has said …Folks are missing the point ,The Pasty in particular . No one has said anything about 100% mortgage - If its an 80% mortgage, say on £220K the mortgage advance will be £176K , but the advance on a £210K valuation would only be £168K - So even on an 80% mortgage the buyer has to find an extra £8K .Think you have come to the wrong place asking advice . I repeat that I personally wouldn't be comfortable paying £220K for a property valued at £210K whether there are mortgage constraints or not .


I completely agree with you. I was just answering the pasty's comment about the £220k being released by the lender. If the property has been valued at £210k the potential buyer will have to stump up the extra out of their own pocket. If they aren't prepared to and op thinks they can get more, then just turn down the offer and wait for better.

andynicol10 h, 14 m ago

£8k?80% mortgage on a valuation of £210K would see the purchaser having to …£8k?80% mortgage on a valuation of £210K would see the purchaser having to raise £42K as the mortgage would be for £168K.£168K + £42K = £210KRe paying over the valuation price, it's all about the property and the position the buyer(s) are in.Attractive properties in sought after areas regularly sell for more than the valuation.



Err ....I said an "extra" £8K - Please read the comment - before commenting .

Decline their offer and leave it on the market

Original Poster

They've significantly increased their offer, so happy to go with that.
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