Buying a New Build, Valuation Less than Agreed Price!

ginandtonic1988

Treadmill wrote: »

I wanted to go and view a property at a Stamford Homes development today but can't because the site is closed as everyone is "At a big meeting"

In my experience and believe me its happened a few times is that a "big meeting" is only ever called to give people thier cards en masse.

I think now might be a good time to play hardball, developers need cash right now... big chunks of it not just the amount to be gained by keeping deposits.

Is there any news on the Stamford Homes meeting?

Treadmill

ginandtonic1988 wrote: »

Is there any news on the Stamford Homes meeting?

I drove around the site earlier and it was like the Mary Celeste, not even any builders working on the unfinished plots, apparently there will be nobody in the sales office until thursday Lunchtime... long meeting

CMOI1979

Update on our situation for anyone who replied and was interested.

Countryside sent us a letter today saying they will drop the purchase price of the property and will still be offering us the agreed incentives.

They will be sending an amended contract for us to look over with our solicitor to sign and return. A happy ending all round which saves us 40k on the mortgage and around £400 on what we originally thought we'd be paying out each month.

Premier your self righteous lectures towards me could not have been further from the mark.

Good luck to anyone else on this board in our situation, I hope you all get the same outcome.

Break out the bubbly

bubblesmoney

good to see that u got a reduction of 40 grand:T . enjoy ur new house

Rachman_2

CMOI1979 wrote: »

Update on our situation for anyone who replied and was interested.

Countryside sent us a letter today saying they will drop the purchase price of the property and will still be offering us the agreed incentives.

They will be sending an amended contract for us to look over with our solicitor to sign and return. A happy ending all round which saves us 40k on the mortgage and around £400 on what we originally thought we'd be paying out each month.

Premier your self righteous lectures towards me could not have been further from the mark.

Good luck to anyone else on this board in our situation, I hope you all get the same outcome.

Break out the bubbly

To be honest, I am not sure if it's congratulations or not. A, if the developer will take a 40K hit to his profits just to sell what does that tell you he thinks is going to happen to the value of the place ? [ignoring cash flow needs]

To be blunt, the valuation is done by an independent surveyor and his view of the real market value of that property at that time - it is not the number you want him to write - his professional indemnity insurance means he can't just play ball - now imagine he'd said £220K because you needed £220K and 6 months later you tried to sell it and he valued it at 180K (or more likely, a lot less than that in 6 months time) - you'd be going mental at him.

I hope for your sake you are OK, but from the thread generally, the total lack of understanding from a number of posters as to when a bank can pull a mortgage offer and what a solicitor acting for lender and buyer has as his duties is scary. A lot of you need to read the paperwork and ask if you don't understand it - because it's clear many of you simply don't - I am not trying to pick on one or other particular person - but the barrack room ignorance from some posters was terrifying.

I am also chuckling at your preconceptions of what is and is not prime and subprime..... - I'll be direct again, by any traditional definition of lending - you are way subprime - it's low deposit, it's incentives, it's risky property, you have a poor credit rating, it's high LTV, you are cohabitees not married - you cross rather than tick an awful lot of boxes..... [BTW, traditional prime lending taking out social factors is less than 40% LTV.....]

bubblesmoney

Rachman wrote: »

To be honest, I am not sure if it's congratulations or not. A, if the developer will take a 40K hit to his profits just to sell what does that tell you he thinks is going to happen to the value of the place ? [ignoring cash flow needs]

To be blunt, the valuation is done by an independent surveyor and his view of the real market value of that property at that time - it is not the number you want him to write - his professional indemnity insurance means he can't just play ball - now imagine he'd said £220K because you needed £220K and 6 months later you tried to sell it and he valued it at 180K (or more likely, a lot less than that in 6 months time) - you'd be going mental at him.

I hope for your sake you are OK, but from the thread generally, the total lack of understanding from a number of posters as to when a bank can pull a mortgage offer and what a solicitor acting for lender and buyer has as his duties is scary. A lot of you need to read the paperwork and ask if you don't understand it - because it's clear many of you simply don't - I am not trying to pick on one or other particular person - but the barrack room ignorance from some posters was terrifying.

I am also chuckling at your preconceptions of what is and is not prime and subprime..... - I'll be direct again, by any traditional definition of lending - you are way subprime - it's low deposit, it's incentives, it's risky property, you have a poor credit rating, it's high LTV, you are cohabitees not married - you cross rather than tick an awful lot of boxes..... [BTW, traditional prime lending taking out social factors is less than 40% LTV.....]

a forum filled up of general public will obviously have many misconceptions. there is nothing to chuckle about that. forums are evry useful for most members as it give us the opportunity to learn from the mistakes of others and also from good advice of others more learned in different walks of life. probably u could enlighten many of us lay people (me including) in these matters. that would be more helpful and interesting for us and help remove misconceptions. just chuckling wont change or help things

CMOI1979

Rachman wrote: »

To be honest, I am not sure if it's congratulations or not. A, if the developer will take a 40K hit to his profits just to sell what does that tell you he thinks is going to happen to the value of the place ? [ignoring cash flow needs]

To be blunt, the valuation is done by an independent surveyor and his view of the real market value of that property at that time - it is not the number you want him to write - his professional indemnity insurance means he can't just play ball - now imagine he'd said £220K because you needed £220K and 6 months later you tried to sell it and he valued it at 180K (or more likely, a lot less than that in 6 months time) - you'd be going mental at him.

I hope for your sake you are OK, but from the thread generally, the total lack of understanding from a number of posters as to when a bank can pull a mortgage offer and what a solicitor acting for lender and buyer has as his duties is scary. A lot of you need to read the paperwork and ask if you don't understand it - because it's clear many of you simply don't - I am not trying to pick on one or other particular person - but the barrack room ignorance from some posters was terrifying.

I am also chuckling at your preconceptions of what is and is not prime and subprime..... - I'll be direct again, by any traditional definition of lending - you are way subprime - it's low deposit, it's incentives, it's risky property, you have a poor credit rating, it's high LTV, you are cohabitees not married - you cross rather than tick an awful lot of boxes..... [BTW, traditional prime lending taking out social factors is less than 40% LTV.....]

Well it is congratulations as we were tied into a contract for 220k and rather than ruin us they have played ball.

If we could go back 6 months we wouldn't have made the same decision but then hindsight is a wonderful thing. No doubt the value will go down but we plan to stay there a few years by which time I imagine we won't be in negative equity. There are people in that block who completed in April at 220k so compared to them we have a result

As for our definition of what is and isn't prime we can only go on what our mortgage advisor tells us and we came out as A+ on the credit score when Halfifax did their search against us. As it is compared to the current market the rate we have is very very competitive and our mortgage outgoings will be just under 25% of our monthly wage.

I am not sure what your point is regarding the indemnity insurance. The original valuation put the flat at 250k maximum and now 180k. That's 28% in 6 months, well above the national average fall so something tells me that they are now being very conservative to minimise any lending risk. I saw this coming well before the valuation came back so I am not as naive as you may believe.

Also the property is in zone 4 in London about 3 miles from the Olympic site and Thames Gateway regeneration. We not talking new builds in Sunderland or Hull and once the current economic climate settles down with the amount of migration to the city from home and abroad I am confident we'll be ok in the long run. We never went into this with the aim of short term investment and profit.

I do agree with you about the level of mis-information on this thread and all over this forum. I posted a similar thread on the Red Issue football website forum and had a good few professional mortgage and property advisors reply to me with good solid independant advice, much of which has come true.

Out of interest do you work in a property related career?

Rachman_2

I do genuinely hope it works out.

The thing I don't get is, they are not spending that much on sustainable post Olympics infrastructure - so why won't it just turn into another Athens or Sydney and be left to go derelict - why is three weeks of press coverage going to turn it into a nicer place to live and make everyone money..... it's still E London.


Instead of the usual caveat of IANAL..... IAAL - I deal in credit agreements, M&A, private equity and the like and so deal with the big banks and institutions on a daily basis - as a consequence of knowing what I draft into contracts, I READ EVERYTHING I sign (within reason !).

Hence my comment about the prof indemnity insurance - I have just remortgaged my own place - the valuer and I had a frank chat and as the LTV was not going to be affected, I had no problem with him writing a doomsday number on his form helps him sleep at night and I don't lose any either .... - I see why it's different for someone buying, but at the end of the day, the surveyor is supposed to be independent and to stop people getting carried away (inc. at the banks) and lending too much money. He clearly thinks a dafe value to put on it is £180K on the day he did it. I agree you've saved yourself a massive load of money in paying only £180K for it - and TBH, I am a bit surprised there are new flats in London for under £200K (I am assuming it's a 2 bedder).

Poppy9

CMOI1979 wrote: »

. No doubt the value will go down but we plan to stay there a few years by which time I imagine we won't be in negative equity. I am not sure what your point is regarding the indemnity insurance.

You should use the £400 per month you had previously allocated for mortgage payments (when you were paying £220k) to overpay your new mortgage. If you cannot overpay your mortgage monthly then put the money into a savings account as you should be able to make a lump sum payment off your mortgage annually. This will dramatically reduce your mortgage over 3 or 4 years and will help you when you want to move on.