AshGo
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Registered: 8th Dec 08
Location: Stoke on Trent
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Me and my partner are looking to purchase a new build property local to where we currently live. The housing association have set the price at £115,000. We have started the process of getting the mortgage and the lender has sent a surveyer out to the property to have it valued. We found out today that the valuation came back at £105,000. Is this something we shoud worry about/ bringup with the sales rep, maybe ask for a reduction in the asking price? Or is this normal for new builds? I understand they have to make a profit.
Cheers
Ash
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a_j_mair
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Registered: 23rd Jan 04
Location: Scotland
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i wouldnt offer any more than valuation unless you really want it and have enough cash to pay the difference
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jrsteeve
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Registered: 3rd Apr 02
Location: Manchester
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Does happen a fair bit, but is potentially good news for you. The builder will have to put forward some more comparables to back up their pricing or drop the price. If they won't drop you could lose the survey costs if you pull out, or have to make up the difference of 10k urself.
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AshGo
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Registered: 8th Dec 08
Location: Stoke on Trent
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The builder is giving us £3000 cashback on completion of the mortgage, unfortunately as were already putting down 25% deposit as this is the least the lender will accept, we can't afford to make up the difference ourselves. We will only loose the £150 valuation fee if we pull out now but then again we have been looking for months and we both really want the property.
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a_j_mair
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Registered: 23rd Jan 04
Location: Scotland
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if ypou cant afford to make up the difference surely you cant afford it, will need a larger mortgage
id pull out personally or offer a lower price
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jrsteeve
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Registered: 3rd Apr 02
Location: Manchester
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I'd reduce your offer based on the RICS valuation. Ask them how they valued it in the first place, find out what others on the development sold for aswell (nethouseprices.com) so you have evidence to get them down on price. They'll just have the same problem with the next buyer anyway, so they should revise the price. Ask your surveyor for the comparables used to value the property.
Is it housing association or private builder?
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Brabus
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Registered: 25th Oct 07
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quote:
Originally posted by a_j_mair
if ypou cant afford to make up the difference surely you cant afford it, will need a larger mortgage
id pull out personally or offer a lower price
The difference will be minimal in terms of mortgage payments, however getting together a lump sum of 10k in a short space of time will be rather more difficult.
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Brabus
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Registered: 25th Oct 07
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quote:
Originally posted by jrsteeve
I'd reduce your offer based on the RICS valuation. Ask them how they valued it in the first place, find out what others on the development sold for aswell (nethouseprices.com) so you have evidence to get them down on price. They'll just have the same problem with the next buyer anyway, so they should revise the price. Ask your surveyor for the comparables used to value the property.
Is it housing association or private builder?
Its a houseing association, Riverside. The Builders are Lovell, i don't know who sets the prices. As i work for the mortgage lender i can view the valuation, it also mentions,
'Sales incentives of £9000 deposit have been disclosed on this sale and should be confirmed by the lenders legal advisor in accordance with the CML handbook. The effect of these on the selling price has been taken into account in the valuatuon'.
Does this mean that the sales advisor get a £9k bonus upon sale of the property hence it being £10k overpriced? If so i think we need to have words but want to get everything straight first.
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VegasPhil
Premium Member
Registered: 16th Jan 05
Location: Fareham, Hants Drives: Octavia VRS
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No...
They mean there is a sales incentive. Free Conveyancing, Cashback, etc included that has influenced the price...
Corsa 2.0 16v Vegas - Sold
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Brabus
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Registered: 25th Oct 07
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quote:
Originally posted by VegasPhil
No...
They mean there is a sales incentive. Free Conveyancing, Cashback, etc included that has influenced the price...
Ahh right, good job we cleared that up  although they are only giving us 5% cash back(£2750) and £500 towards solitors fees. That seems quite a way off £9k...
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VegasPhil
Premium Member
Registered: 16th Jan 05
Location: Fareham, Hants Drives: Octavia VRS
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Just chip it then.
Corsa 2.0 16v Vegas - Sold
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Brabus
Member
Registered: 25th Oct 07
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What does 'chip it' mean
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VegasPhil
Premium Member
Registered: 16th Jan 05
Location: Fareham, Hants Drives: Octavia VRS
User status: Offline
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Get the price down
Corsa 2.0 16v Vegas - Sold
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Brabus
Member
Registered: 25th Oct 07
User status: Offline
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UPDATE:
As the valuation came back below the asking price the case got reffered to the underwriters who confirmed that they are not willing to lend on the property, even if we got the asking price down in line with the valuation.
Their excuse is that because the house is part of an unfinished regeneration area, they feel the parts that have not yet been regenerated will affect the saleability too much  Bit of a shame because in a year the whole area will be completed and no doubt the house will be worth more due to this.
[Edited on 07-05-2009 by Brabus]
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