Premium on New Builds

adamski911

Hi,
Me and my girlfriend have recently just put a deposit down on a new build with a part-ex on ours.
We were told by the building company and most banks/mortgage companies that the new builds are attached with a premium and are usually valued at second hand.
Knowing this the new build company decided to honour any under valuation on the property if this occurred hence being in our favour.
Taking this into consideration we applied for a mortgage with Nationwide but now the valuation has come back at the purchase price.
Obviously we are dissapointed and a bit annoyed after being led to believe that these new builds are worth less then the purchase price by both the banks and by the housing company themselves as they said nearly all of the houses had previously been under valued.
Of course we are dissapointed that we thought we might get a better deal than the original price but are more concerned in how accurate these valuations are and after all the talk about the premium are we in danger of paying too much for this house.
The problem is we have already paid a £1000.00 deposit and also the admin fee and valuation with nationwide setting us back £1500.
Are we just worrying about nothing or should we consider any other ways of getting another valuation.Problem is the extra cost, which we are struggling to afford at the moment anyway, just for them to come back with the same price?

maninthestreet

adamski911 wrote: »

Hi,
Problem is the extra cost, which we are struggling to afford at the moment anyway, just for them to come back with the same price?

Then don't buy this house, you can't afford it.

adamski911

Its not that we cant afford it.We budgeted based on the original purchase price.Our issue is that we dont want to pay more than the house is worth based on the valuation based on the feedback from the banks/building company etc.

maninthestreet

adamski911 wrote: »

Its not that we cant afford it.We budgeted based on the original purchase price.Our issue is that we dont want to pay more than the house is worth based on the valuation based on the feedback from the banks/building company etc.

The house has been valued at the price you agreed to pay for it - where is the problem? You certainly won't be taken seriously by either the lender or the surveyor involved if you complain because the survey valuation of the house matches the purchase price you have already agreed to pay. Has it possibly occurred to you that the 'premium' on the purchase price of the new house has actually just been moved to a lower than market value offer for your existing property that is part of the deal??

ILW

adamski911 wrote: »

Its not that we cant afford it.We budgeted based on the original purchase price.Our issue is that we dont want to pay more than the house is worth based on the valuation based on the feedback from the banks/building company etc.

Two factors determine what the house is worth.
How much someone is prepared to pay for.
How much someone is prepared to lend on it.
It appears that currently these two are fine, but could be completely different in 6 months time.

adamski911

If that is the true valuation then fair enough.But my concern is that if we pay more than the other people that are moving in at the same time then we have a problem.

maninthestreet

adamski911 wrote: »

If that is the true valuation then fair enough.But my concern is that if we pay more than the other people that are moving in at the same time then we have a problem.

Then don't buy the house - it's simple!

bacard1

Very strange that a lender agrees that the house is worth x, and you think you could of get a better deal, even though you agreed the price to start with. If you are happy with the purchase buy it, or withdraw from the sale (loosing your deposit) and try and bargain harder to get a better deal. If you have doubts don't ask you neighbours how much they paid

PasturesNew

If you want an example, drawn from completely random, then here is a link to some identical properties, built on the same estate by the same builders to the same spec. Some are second hand, others are brand new.

http://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=POSTCODE%5E3885863&maxPrice=150000&includeSSTC=true&_includeSSTC=on

For the record (link will die in the future), new ones are £149,995, second hand ones are £124,950 and £132,500

A builder's price will often include "freebies" like landscaping, or carpets, or legal fees/surveys paid. The value of freebies can be taken into account when a lender values them.

bacard1

buy second hand then, the landscaping will still be done, and insist the carpets are included. I also think if you went and showed the builders the others prices they would move on their price