Mortgage valuation lower then purchase price. please help

ar25un

I have agreed a price for a new build two bed flat, in Leicester, for the price of 133,000. This was knocked down from 152000, and they have also added a few other incentives such as flooring and some applicances. However Natwest who I have got my mortgage with valued the flat to be 122,500. All the properties being sold have been bought really quickly, as the 2 bed flat I have reserved is the last one available. They are building more in the future but state they are waiting for the prices to go up.

The sales people are not wiliing to negotiate on the price stating that natwest value new builds 10 % lower then marker price.

I do not know what to do? Do i go with another bank for my mortgage, but i have got such a good interest rate, and cannot afford any higher. Do i get an independent property valuator to give me a second opinion, or do i just pay the asking price for the flat even though it is significantly less then the valuation price?

Please Please Help
Anna

david29dpo

Natwest is correct. If you sold your new flat the next month, you would loose at least 10%

Bufger

ar25un wrote: »

I do not know what to do? Do i go with another bank for my mortgage, but i have got such a good interest rate, and cannot afford any higher. Do i get an independent property valuator to give me a second opinion, or do i just pay the asking price for the flat even though it is significantly less then the valuation price?

Please Please Help
Anna

Based on this i would say you shouldnt get a mortgage at all. If you simply cant afford a higher rate then you will be in trouble in a couple of years unless your circumstances change dramatically.

In answer to your question, i would avoid a new build as lenders know they are overpriced by the builders. They may have already dropped it in price but that doesnt mean the new price cant be over the odds. Builders will want the most for a property, banks will want the most for their money and therein lies the middle ground you must find. If its simply not achieveable you can either pay the difference, try another lender that might say the same or walk and find something a little older that should have a settled and realistic asking price (or at least plenty of others like it to compare)

poppysarah

It's valued less. So Pay less.
If they don't want to reduce price further walk away. Everyone else's mortgage valuation will come back the same.

_Andy_

As stated on your other thread, why on earth would you want to spend thousands of pounds more than something is worth? (And which will probably devalue as soon as you move in anyway)

pinkshoes

Which bit of Leicester?

According to Rightmove, there are over 1000 properties less than £130k with at least 2 bedrooms.

For £130k, you can buy a 3 bed semi, so are you sure a 2 bed flat is worth that sort of money????

barnsleygal

Hi Anna

We've just had exactly the same problem with our Natwest valuation...valued 10k down from agreed purchase price on new build house.

Even after comparables were sent into the mortgage centre they stood firm on the valuation.

After a nailbiting couple of weeks the builder agreed to drop the price. :T The valuation has done us a favour at the end of the day doesn't do much for the stress levels though does it?:eek:

The builder said exactly the same to us to about the fact that they had already dropped the prices and thought they were in line with the current climate...which made the wait even more agonising for us. We have been in limbo for the past couple of weeks!

My advice is just hang in there, tell them you are all set to go ahead with this and put the ball back in their court. They have a sale with you and, like another post said, another customer valuation could come back at the same price so it would be easier just to stick with you. Hold your nerve but be honest with the builder, I don't believe in all the games people play. Just be honest, tell them your position and if they will probably just go with the lower valuation.

Good luck! :wave:

Cannon_Fodder

Another success story, this is becoming almost commonplace.

Well done, Barnsleygal.

RJP33

We had the same issue a couple of months back, valuation lower, builder not budging. Eventually the builder gave in and we brought for the lower price, so the under valuation was a gift for us.

In terms of values, the builders always seem to over value their properties.

Trollfever

All the properties being sold have been bought really quickly,

How many of the buyers have actually moved in?

anxiousbabe

Hi, I am actually experiencing the same problem. I have reserved a flat in London for 400k (listed price 385k) as I added carpark space and valuation by the Bank came in at 350k. It is new built and not completed yet.

I am planning to renegotiate with the developer to get carpark space included at 385k. I know this is above valuation but all the units have been sold at listed price and I seriously doubt the developer will meet the valuation.

Is this sensible or am I still paying over the top?