New Build Valuation Lower than asking Price!

JonathanJ

Hi,
I am currently in the process of buying my first home from a large Fairview development in Crawley.
Everything was going fine and smoothly until I got a call from my Broker saying the valuation had come back saying the flat wasn’t worth £175k but £155k,
Now I am left sitting in the middle some ware with Fairview insisting it is worth what they are asking and the lender saying it’s worth £20k less than that and neither are willing to budge.
Does anyone here have any ideas what I can do?
Surely I can’t be the only one in the development with this problem, there are over 850 homes being built so this must be happening to most of them?
I am really quite unsure as to where I can go from here, as I really don’t want to loose the flat!

Some help would be great.

JonathanJ

natman

SORRY to hear of your hardship, I am sure this is happening a lot. To be honest we just bought a new house, in Feb 09 valuation was fine................. however the property was on for 229k, they reduced to 205k, I am presuming if they had not reduced, the valuation would of been less.

The obvious problem you have is you will not be able to get a mortgage for any more that the property is worth from the valuation. The builder can kick up a fuss, but at the end of the day a 'professional' valuer has suggested a valuation, to protect the bank and to protect you.

The only advice I may have is to check what other houses have been sold on your estate try this - http://www.houseprices.co.uk/
All I am thnking is, if this house was built some time ago, and has not been reduced with the house price falls, then it is overvalued by the builder.
Try nt to see this as a problem, but a blessing, you have some very factual information on paper what the house should be valued at. speak to the builder in a reasonable way, indiating that, you would like to proceed with the house. In all fairness, if you pulled out and someone else bought it, their valuation would more than likely be around 155k or what your valuation is indicating. Another step may be to get your bank to do a further valuation i.e a second opinion or get the builder to pay for a valuation to compare.
As i said before dont see this as bad, if the house is only worth £155k its only worth £155k, why should you pay more or the bank give any more. Pass it back to the builder, they should know that if they lose you, someone else will have the same problem

poppysarah

Don't ever think of paying more than the valuation.

They won't budge. Don't buy it.

ILW

£175,000 for a flat in Crawley does sound rather expensive.

AMILLIONDOLLARS

Having the same problem, flat valued £25K below asking price, waiting to see what they will do, obviously we will not be paying over the odds, its now down to them for find comparables!

And no you're not the only one having this problem, here's one example
http://www.wharf.co.uk/2009/03/pan-peninsula-buyers-struggle.html


also Berekley Homes are having major problems with down valuations and non-completions at the moment.

AMD

inmypocketnottheirs

Hmmm, I'd offer at least 20% less than the valuation in the current market. Esp when there's 850 properties on the delopment. They need you more than you need them. Personally, FWIW, i'd be extremely cautious about a new build flat, these have suffered most in recent times.

AdrianW2

JonathanJ wrote: »

Now I am left sitting in the middle some ware with Fairview insisting it is worth what they are asking and the lender saying it’s worth £20k less than that and neither are willing to budge.

Happened to a friend recently. Eventually the developer relented. After that everything went fine and she moved in three weeks ago.

SouthCoast

I know of a Berkeley Homes flat development that was completed in Spring 2007. Properties are still being marketed at 2007 prices and have not sold.

P.S.
Nobody could afford to buy in the shared ownership part of the development and the Housing Association had to let the properties out.

lovemotown

This is part of the predicament I am in. I wanted to part ex on a new build and missed out on one house that had been reduced to a cash buyer.

I now want to consider going for one of the other houses but they want me to pay the advertised price "because we are buying your house and may have trouble selling it". All these house types are all unsold and in my opinion way overpriced.

They give me the speel about they are doing me a big favour and they couldn't possibly do a part ex and reduce the price of the house - WHY NOT??, they are overpriced and the value they are giving me for mine is a figure on the low side anyway, (but is a figure based upon the market NOW). I just want to pay what the house is worth NOW, not when they built it, 12 months ago.

However, because I want to part ex, they wont budge on the price, yet surely unless they reduce them, nobody else is going to buy them either, so why not accept a lower price from me? I know a cash buyer would drive the price down anyway.

If I knew they would accept my house, AND reduce the price to a more realistic figure, I would proceed. But am not willing to pay overpriced property for the "luxury" of part exing.

I now am sitting tight and monitoring to see if they reduce and will then go in again as part ex, (assuming they will still honour the agreed valuation price on mine they gave me).

If not, I'll try sell mine and go in again as a buyer rather than a part exer!

cardsharps

JonathanJ wrote: »

New Build Valuation Lower than asking Price!

Has this ever happened before?

Mini_Bear

Dont pay over the odds for this property! My sis in law was in a similar position on a new build house, property was valued 20k under agreed price and sis in law has paid the idfference out of their deposit, meaning they hav a 85% LTV instead of 75%. We tried to warn them that neg equity wud be likely (as new build lose value compared to 2nd hand ones). She wouldnt listen and is now in a bit of a pickle with money.
Dont do it OP, you will not be the only one with a low valuation, the builder must drop their price or walk away and save save save.