New Build Valuation Lower than asking Price!

JonathanJ

I spoke to the sales office today. Funnily enough the sales negotiator I spoke with (same one I original dealt with) new all about it and said much to my surprise that it was completely expected! And that Nationwide’s surveyors had done it to everyone.

I told him that I outright wouldn’t be prepared to pay for a second survey or the larger deposit. And he said he would speak to head office and get back to me on Monday.

So it looks like things may be going ahead with this other lender, but I’m not comfortable with it.

lynzpower

So it looks like things may be going ahead with this other lender, but I’m not comfortable with it.

:eek:

That sounds like the sound of an alarm bell.

PLease Johnathan, if you are not comfortable with it back out. You can always come back later , im sure the prices will ge tcheaper and sounds like there will be plenty left.

In any event on a development as large as this, if I were inyour shoes Id be inclined to sit it out and see who ends up being the neighbours. Theprice will come down the longer they are empty, thats true. They might also use them as private rented, or othersuch. SOme have been squatted. I personally would be inclined to step back, see what else is around and back out now.

HH62

Just agreeing with everyone else. Do NOT allow the developer to push you around. You're holding all the chips here, from what you've said. Don't spend any more £££ on this.

JanCee

JonathanJ wrote: »

I spoke to the sales office today. Funnily enough the sales negotiator I spoke with (same one I original dealt with) new all about it and said much to my surprise that it was completely expected! And that Nationwide’s surveyors had done it to everyone.

I told him that I outright wouldn’t be prepared to pay for a second survey or the larger deposit. And he said he would speak to head office and get back to me on Monday.

So it looks like things may be going ahead with this other lender, but I’m not comfortable with it.

You have paid for a valuation by an expert who has told you the flat is worth £155k so why would you want to pay any more? Use the information to get the price down.

JonathanJ

I made a call to the sales office a little while ago without giving hem my name to find out a few things and figured I would share with you all some information I found didn’t quite add up.
The sales brochure for the block of apartments I am buying in lists two types of properties, private apartments and “low cost housing” mine is one of the latter so I called up to find out what the difference was. Apparently this was a printing error? Ok then mistakes happen.

I also wanted to know which lenders they use, apparently there is only one (Halifax) how is this possible when I have already been approved with Nationwide and Principality are now also an option. Did she get it wrong or was it just a bit of crock?

And best of all I wanted to know how many properties they had remaining.
I was told that they sell around 8 to 10 properties every week and if I want a place I should act fast as the flying start thing they are doing may also come to an end soon…
I found this interesting because according to a land registry search they don’t sell that many a month! In fact there sales peeked at 14 in September last year but have dropped steadily to 3 in January and 5 in February.
In fact if they had been selling 8 to 10 a week since they started selling them (as she claimed) they would have run out of places to sell quite some time ago.

Just shows that the salesmen are not much more than professional liars and if they weren’t selling houses they would be selling used cars some ware!

JanCee

I have high hopes for you JonathanJ you are getting smarter by the minute.

lynzpower

JonathanJ wrote: »

I made a call to the sales office a little while ago without giving hem my name to find out a few things and figured I would share with you all some information I found didn’t quite add up.
The sales brochure for the block of apartments I am buying in lists two types of properties, private apartments and “low cost housing” mine is one of the latter so I called up to find out what the difference was. Apparently this was a printing error? ( no, they dont want you to ask about the differences in case you dont like them, and you were under a different impression Ok then mistakes happen. ( !)

I also wanted to know which lenders they use, apparently there is only one (Halifax) how is this possible when I have already been approved with Nationwide and Principality are now also an option. Did she get it wrong or was it just a bit of crock? ( this sounds really dodgy to me- is this because of the flying start thing though- Im wondering is this deal where you have 75% mortgage now then the other 25% later... thats why only halifax would do it ? )

And best of all I wanted to know how many properties they had remaining.
I was told that they sell around 8 to 10 properties every week and if I want a place I should act fast as the flying start thing they are doing may also come to an end soon…I found this interesting because according to a land registry search they don’t sell that many a month! In fact there sales peeked at 14 in September last year but have dropped steadily to 3 in January and 5 in February.( dream on, the use of "may" means this is a sufficienlty vague statement I can get away with in terms of EA regs) If they have 850 and they sell 8 per week, then they will be selling these, at this rate- if you believe this rate that is, if so why no recent comps??) for 106 weeks, if you grant that none have sold yet- which they probably have. I dont know how many are sold, but clearly none recently as your surveyor had nothing to compare it with. Therefore likely to be a lie.

In fact if they had been selling 8 to 10 a week since they started selling them (as she claimed) they would have run out of places to sell quite some time ago. indeed!! :rotfl:

Just shows that the salesmen are not much more than professional liars and if they weren’t selling houses they would be selling used cars some ware!

Im not sure Id use the "professional " you use there, maybe they are "suit-wearing liars "

Back out they are having you on. :cool:

JonathanJ

Hmmm,
After a little more reading it would seem that Nationwide and a one or two other small lenders are currently instructing their surveyors to knock 20% of there valuations on new builds.
Apparently it is because new builds have suffered the most in recent times and they are being somewhat over cautious in case the slump continues.

Looks like a take it or leave it situation.

On another note, I hear so many people talking about being in negative equity, but I find it somewhat hard to believe how true the “hype” is.
Surely you are only actually in negative equity when you sell your home (ether by choice or the lender so kindly does it for you) and the amount you get for it is less than you still owe.
Basically, so long as you continue to pay your mortgage you are not in negative equity, you simply paid more than the lucky git who only just moved in next door.
Ok so you have the potential to be in negative equity, but everyone who has a mortgage has that potential, who knows what our houses are going to be worth in six months.

lynzpower

times and they are being somewhat over cautious in case the slump continues.

Im interested in the use of the term "over cautious"

Lenders have to be careful to make sure they are not lending more than the property is WORTH.
That means if they had to repo it what would it fetch, whats it worth.

They set the value, not the developer and not you. They say what is worth lending on and they are being CAUTIOUS to protect thier investment , after all they are lending you over ONE HUNDRED THOUSAND POUNDS - picture it!

Auctioneers cant even get 100k for london new build flats at auction at the moment, that is the value, they are "worth" less even than that.

JonathanJ

Yea didnt think of that. But do you HAVE to re-mortgage?