Buying new house - valuation from mortgage company £30,000 less that asking price

stimpssl

Hello All,

I wonder if anyone can offer me and my hubby some advice. We are in the process of buying a brand new house through Wimpey on the 75/25 scheme. We purchase 75% and have 10 years to pay back the other 10%. We have brought the house for £189,000, however our mortgage company have valued the house at only £160,000.

My question is does anyone know whether Wimpey now have to let us buy the house for £160,000? How do we stand if they say they are not prepared to drop the price? What happens in these circumstances?

Many thanks,

Sarah

poppysarah

Your independent solicitor is who you should be asking. Not one recommended by Wimpey.

I'd not buy at the moment. You're going to be buying a depreciating asset. It's already worth less than you thought.

ginvzt

Well, you definitely don't want to pay more than the house is worth. So, you can just say to Wimpey, that either they accept £160,000, or you are walking away. You haven't exchanged yet hopefully! (And you are not in Scotland, are you?)

They may want to see valuation report to back your story.

stimpssl

thanks for the advise poppysarah. Unfortunately because of the deal we have had we are using a wimpey recommended solicitor. If they do come back and refuse to reduce the house maybe then we will have to get independent advise.

teabelly

New builds are always over priced. If you were thinking of paying 189k for 75% then that is daft. Insist you pay that for full ownership then I think the lender might be happier. The shared ownership scheme is just a con for developers to maintain high prices in uneconomic areas. Even better say either you buy 100% for 160k or you walk away. Most of the developers are in desperate times so if you actually have a mortgage then they will probably agree.

stimpssl

thanks teabelly. We were paying £140 for 75%. My query was do developers have the right to refuse to drop the price even if the valuation says its worth less?

Thanks ginvzt for your response.

ginvzt

The developers might refuse, but you should let yourself to be bullied into buying a house for a price above valuation. Don't let them tempt you with 'extras', like carpets, turf, appliances, etc. These don't add value to the house, but just pump up the sale price.

lynnexxxo

The developers have the right to refuse to drop their price, just as anyone selling their house has the right to refuse an offer lower than they want.

As long as you still have the right to walk away (have not signed the missives or anything) you are in a strong position to say drop the price or we won't buy.
If you have signed missives however the developer holds the cards...

stimpssl

thanx Lynnexxo. All we have signed at the mo is the papers when we reserved the property along with £99. What is missives? thanx.

poppysarah

I can highly recommend you go and take independent legal advice. Make an appointment to see a solicitor who knows their conveyancing and get out of this insane contract.

They won't negotiate on price? Well it's either lose your 99 quid or 30k in one swoop. Which do you think is worse?

stimpssl

thanks to everyone who responded to my query.