A snag that house buyers can face is when an offer is accepted but the price is subsequently down-valued when your lender completes a survey.
Potential buyers can have their plans knocked if the seller refuses to accept a similar downward adjustment to the offer price - but there are options to consider.
A down-valuation can occur when the mortgage lender’s surveyor finds the property’s value to be lower than the asking price, which can be down to a number of factors.
The house may have some undiscovered issues with its condition, there may have been a downturn in prices locally, or it may have been priced above similar properties in the area.
Many factors can change the value of a property
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If the seller refuses to reduce the selling price, the buyer can be left trying to make up the difference.
The first move is to ask your lender if it would consider a higher loan-to-value mortgage which would reduce the deposit amount, though the interest rate could be higher to account for the extra risk to the lender.
The best advice is to keep talking to the seller, stress that there’s a challenge faced by both parties and that other buyers may be confronted by the same problem.
You will be in a good position to negotiate if you have agreed a sale for your own property, and point out that there is a risk that the property could be down-valued again for another potential buyer with a mortgage.
Other things you can do include challenging the valuation, if there are other comparable properties locally that have been sold in the past few months that could support the price you've agreed.
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Jonathan Rolande shares his tips
JONATHAN ROLANDEThe chances of overturning the valuation are low but it is worth trying if you have the evidence.
You might also consider approaching another lender who might instruct a different firm of surveyors, though there is a significant risk that the same firm may be used.
The other option would be to fund the shortfall yourself, using savings, a loan or help from family members, but only do this if you are happy with the sum you’ve offered, considering the lower valuation.
Otherwise, keep looking for a home that better fits your budget and avoid the risk of overreaching yourself financially.
Jonathan Rolande is a property expert from the National Association of Property Buyers
