Valuation help

Just gone sale agreed but the bank valued the property 21% less than the offer agreed. Quite a big difference really.
What should happen in this situation.. go back and renegotiate with the vendor, but possibly risk loosing the property? Or just bite the bullet. Any advice welcome. The agent is putting pressure on to sign. Like the property but I don't like the idea of voluntarily starting on negative equity.

Ggm said:

Like the property but I don't like the idea of voluntarily starting on negative equity.

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Have the bank not reduced the mortgage approval in line with the valuation?

No change in the mortgage approval

So the bank have completed an independent valuation which has disclosed a 21% difference in the price you are paying for the property and they are ignoring this for the purpose of the mortgage approval. Are we already back to Celtic Tiger lending practices

One of the biggest purchases of your life and you paying over a fifth more for the privilege. You be mad to go ahead with this.

OP is probably not borrowing up to 90% of reduced value, that could be why bank would not have reduced mortgage approval.

But what I want to know is, is this amount of a discrepancy anywhere near normal? Would you go back and negotiate in a case like this?

Already feel ripped off

I had this once with a mortgage application, the valuer refused to value the house at the sale price, said it simply wasn't worth it. Vendors lost the sale as the applicant didn't have the money to go ahead with the full mortgage approval. You can try negotiate but if the house is one that would be in demand then all they have to do is get a buyer without mortgage issues. Is it worth the extra to you?

You could ask the bank to get a second valuation maybe from someone else on their panel, you'd probably have to pay for it but it might be worth it.

It seems the lower valuation from the bank is closer to 30% lower than the asking price. But the lower valuation from the bank is the rebuild cost, so I guess there is a difference between that and the market value. Is such a gap between the two prices normal though or was I worrying for nothing?

rebuild cost would also not include the valuation of the site, and that could easily have a significant difference between the market value and the rebuild cost (what you would insure it for).