New Build purchase issue

Blueforever

A quick note (which I'm sure will make some of you laugh) to pass on an experience but to also ask for some help.

I've been trying to take advantage of the current property price crash to purchase a newbuild property - price recently reduced, part exchange on my current property agreed, a nice big 4 bedroom house.

The problem is that the bank have valued the new house at a massive 20% below the asking price from the developers. The developers are refusing to move on the price (blaming the bank for being unreasonable) and refusing to refund me the fee's paid to date.

To date I am out of pocket by over £1000 in reservation fee's, survey costs etc.

Does anyone have any advice?

Also I've got a nasty feeling that I've been "had" by the developer. Getting me to sign all these agreements concerning paying reservation fee's (non-refundable) then once the valuation came in they have washed their hands of me.

I've issued a Small claims court judgement against them this week stating that they had overvalued the property, been unreasonable in refusing to lower the price, etc etc.

Any help????

chickmug

Not sure what the law is these days but when I was in new build our solicitor told us there is no way we could keep reservation deposits if the person pulled out. Same in my more recent years in agency. Can you ask your solicitor todays position because, as far as I am aware, nothing has changed.

Blueforever

I haven't gone to a solicitor yet - part of me doesn't want to throw good money after bad money. But the various pieces of paper they made me sign kept saying non-refundable. I just didn't expect a £220k house to be valued at £175 by the nationwide!!!

I was hoping the threat of court action would persuade them to refund me something. There is also a £380 valuation fee with the Nationwide that they don't care about.

As I mentioned in my first post - part of me wonders if this is how they are operating - a few £500 deposits each week, sales fall through (they didn't seem suprised when mine did)

chickmug

Sorry I don't feel able to offer more advice but sure others will come along throughout the day.

Except on the deposit paid where I know an agent, who is a friend, who takes deposits and all the paperwork says None Refundable. His solicitor has said it is out of order but he ignores that advice. Whats more he was about to join the NAEA until he realisd his deposit taking would be against their rules.

So unless someone comes along, like Richard Webster the solicitor who posts on here a lot, and says different myopinion is it is not legally binding.

Glad to see you are taking court action.

lonestar1

Lose 1k or 45k I know which one Il'd prefer. If it helps think of it as saving yourself 44k

JayneG

Oh god, this could be me later on today. Our valuation took place on Monday on a new build 4 bed detached and I am waiting anxiously for the resuts.It has already been reduced by 23% and is looking like good value compared to the other 'second-hand' homes in the area, but whether the lender will acknowledge this or whether they will stick to the "new builds are always overpriced" (regardless of any reductions) mantra, we shall see!If it is the latter, then I too shall be out of pocket to the tune of approx £1200 :-(

chickmug

Hi again Blueforever

Just in and time to read your post again and would say I really don't think, apart from deposit back, you will have a leg to stand on. The law doesn't say that any developer should only ask a sensible market price for their home so the onus is very much on the person buying (buyer beware) to make the decision is it fair value.

Now and again, when selling for clients, a potential buyer has arranged an independent valuation before offering but this has been on the higher end of the market.

Also I would of expected the developer to have prevalued the house/s and had a finance source that would of lent in accordance with this up front valuation.

So my view is you will get very stressed and I know of no angle by which you will get more than the deposit back

Blueforever

I hope the 4 bed detached house wasn't in the Ellesmere port area!!! Your story is the same as mine - the builder had already dropped the price but the mortgage provider was still 20% out. And I can't afford to lose out on over £1000. The sad thing is that I think the builder expected the valuation.

They quickly agreed to pay for another valuation which I refused (they wouldn't answer my question as to what if the next Valuation came in lower than their price - would they accept it or would they keep taking valuations forever)

The sad thing is that they were quite happy to take their reservation fee's and dump me. Hence why I'm asking for advice as I want to try and get the money back (or at least some of it)

Blueforever

So my view is you will get very stressed and I know of no angle by which you will get more than the deposit back

I'd be more than happy just to get the deposit back - but they are arguing that the fact it was reserved for me meant that this could have prevented sales to other people!!!

ad44downey

Blueforever wrote: »

- the builder had already dropped the price but the mortgage provider was still 20% out.

In reality, it is the builder who is '20% out' rather than the mortgage lender.

Blueforever

ad44downey wrote: »

In reality, it is the builder who is '20% out' rather than the mortgage lender.

I agree with that completely which is why I'm so annoyed at the home builder (wainhomes) who I feel:

-Exagerrated the asking price making a mortgage impossible
-Failed to offer any sort of resolution to this issue
-then held onto my "reservation fee"

I even used their own nominated mortgage provider.

I was wondering if anyone had similar experiences or any idea on how to resolve the situation