Can builder pull out of sale?

DeadCat

I recently offered £172,500 on a new build 1 bedroom flat in Surrey (sale price was £179,950 reduced from £212,000) which was accepted. Ive subsequently found that similar flats in the block have recently sold for £168-£170k. The lenders valuation has come in at £160k. The developer was up in arms over this result and contested it immediately but the Surveyor is standing by the valuation. The sales woman in charge is of the opinion that the valuation is ridiculous and asked if I would pay the extra to cover the shortfall in the mortgage in order to make up the previously agreed sale price.

This flat is one of the last to be sold in a development of 129 flats which were first marketed in 2007. The flat is in a good quality town centre location 4 minutes walk from the train station which has direct access to two central London stations.

I have placed a £1,000 reservation deposit on the property.

Does anyone know if the Developer can pull out of the sale, say wait 9 months and put it on the market again? Does the reservation deposit mean they contractually have to sell it to me?

Thanks

Graham1979

A reservation deposit would normally only hold the property for you until exchange of contracts, and a timescale for this should have been specified on the reservation form.

Until exchange of contracts either side can still back out, but if the purchaser initiates this then the developer will normally retain some (if not all) of the reservation fee.

lincroft1710

As contracts have not been exchanged either side can pull out of deal.

The reservation deposit would be retained if you did not proceed with the purchase, but should be returned if builder decides not to sell flat to you. RD is for builder's benefit, not buyer's.