Overpriced New Home - Advice Needed

brindlemouse

We were in process of buying a new home with Bryant Homes. The Coventry Building Society sent a surveyor in to do a valuation who came back and said they would not lend the amount we required as they felt the property was overpriced by 10k.

We have a number of questions arising from this and wonder if there are any professionals out there who may be able to help:-

1. How often does this happen?
2. Bryant are saying other properties in this development have sold for near asking price so why would a mortgage company be saying it is overpriced
3. Bryant are also saying the reason the valuer is saying the property is overpriced is because the surveyor was not from this area - how likely is this to be the case (I imagine the surveyor would take umbridge at being labelled unprofessional but might he not have taken regional variations into account?)
4. Do we have a case to ask Bryant to refund our £500 deposit and wasted Solicitors fees if the house has been overpriced.

Any advice would be greatly appreciated.

Many thanks
Donna

HelpWhereIcan

brindlemouse wrote:

1. How often does this happen?

Depending on the builder, less often than with the rest of the market, but probably more often than you think. There is one development local to me that I know some local surveyors think is over-priced and are very cautious with. In this case, they are concerned that the amount of incentives being offered (deposit paid, white goods, carpets etc) are being used to keep the development's prices high - have to say I agree with them in this case. Have you been offered a very good deal on extras - if so, may be an indication that the same could be happening (bearing in mind builders always give deals on deposit paid etc - just the level being given on this development is well above the norm and average for area).

brindlemouse wrote:

2. Bryant are saying other properties in this development have sold for near asking price so why would a mortgage company be saying it is overpriced

What me guv? I would venture to guess that it is no shock that they woud be surprised - is the dvelopment old enough to see on land registry details or http://www.housepricemaps.co.uk/ (sometimes easier to locate on the map)?

brindlemouse wrote:

3. Bryant are also saying the reason the valuer is saying the property is overpriced is because the surveyor was not from this area - how likely is this to be the case (I imagine the surveyor would take umbridge at being labelled unprofessional but might he not have taken regional variations into account?)

Yes, does happen - if the valuer is 'out of area' he may not understand the nuances of the local market and may not have a large enough bank of 'comparible' properties to make an informed valuation with. The surveyor will have used the info they have to come up with a valuation. If you or Bryants can provide evidence of other properties on the development selling for more, your lender may be able to ask the surveyor to reassess their valuation of the property.

brindlemouse wrote:

4. Do we have a case to ask Bryant to refund our £500 deposit and wasted Solicitors fees if the house has been overpriced.

Maybe, but if not you do have an argument for them reducing the price. If they/you pull out now, they will have to find a new buyer, wait for their valuation only to potentially come across the same problem with the surveyor. They may prefer to have the 'bird in the hand'. Do not underestimate the strength of your position as a buyer when a property is downvalued especially with new build who rely on a quick turn around of properties.

Hope this helps

dmg24

Quote:
Originally Posted by brindlemouse
4. Do we have a case to ask Bryant to refund our £500 deposit and wasted Solicitors fees if the house has been overpriced.

Maybe, but if not you do have an argument for them reducing the price.

I would agree that you may have an argument to ask them to reduce the price. However, if the development is popular and they are likely to sell the property again quickly, then you are unlikely to get anywhere. I know that on the development I live on they had this situation, but it is so popular that they just remarketed the property and it was reserved again within a week, and the valuation went through with no problems.

You certainly have no legal right to ask Bryant to refund your reservation fee, and certainly not your solicitors fees. If they did refund your fee this would be purely out of goodwill.

Obviously I don't know anything about the surveyor in question, but I would agree with Bryant that perhaps they don't know the area (mine certainly didn't), or they haven't researched the development. The latter may be the case if the figures for the other sold properties are so new that they are not listed anywhere yet.

If you really want the property, I would try to negotiate a greater discount. Alternatively, try and get friendly with the sales person and find out which mortgagors/ surveyors the other buyers used? They can't openly give out this information, but if they want you to continue with the purchase they may be able to informally 'recommend' suitable people?!

real1314

INAE but...I don't think you have any right to a refund of your £500, you agreed a deal, but as YOUR lender isn't happy, that's your problem, but....

How do you think Bryant would feel about you putting a copy of the valuation in the local paper on "property day" as a half or quarter page advert?

Maybe you should speak to them very nicely (and I actually mean that), explain how disappointed you are and ask if they would refund it as a goodwill gesture, and let them have the valuation?

If they treat you like dirt / laugh at you / are unhelpful, then say that you feel that they are overpricing the development (I walked onto a development 2 weeks ago and was offered 5% off within minutes if I bought 2, even though they said they were "selling like hot cake, 75% sold") and that you might contact the local papers. See how they respond.
Then maybe wade in with the valuation advert possibility (might be worth cheking adverts rates first, just to show you know what you're doing?).

If you don't succeed, you've lost nothing (that you hadn't already lost), you might even want to run the ad anyway (bet it would make the news, maybe national even? that'd look good!).

hth

Jorgan_2

Is the builder offering any incentives with your deal? The surveyor may have taken these into account & come to the conclusion it is overpriced.

The surveyor may not be familiar with the area, he could be providing holiday cover for a different office. Have you tried to find out from the surveyor why they think it is overpriced, what comparables have been used for their valuation?

Tassotti

New builds have always been way overpriced.

Lenders are now realising this and will put a realistic figure on the actual 'value'

Not sure about your comeback..Maybe ask the developer to instruct an INDEPENDENT valuation from a local surveyor and present this to the developer.

Most developers offer a 15% discount to anyone with a wallet..Why..It is because they are at least 30% overpriced.

Jorgan_2

I doubt if you will be able to get a refund from Bryant, check the small print on the reservation form you've signed. In Bryants opinion the property isn't over priced, in your surveyors opinion it is.

dmg24

you might contact the local papers.

No paper would touch such a story, as they are leaving themselves open to all sorts of liability!

Equally, I doubt that a paper would let you publish your valuation report, again for liability reasons.

Bryant will know all of the above, and would more than likely stop taking you seriously if you went down this route.

brindlemouse

Thanks for all your helpful replies.

The plot thickens even further:-

1. Mortgage company felt Surveyor had not taken into account 5% builders incentive offer
2. Surveyor confirmed he had taken this into account and still felt property was overpriced by 10K
3. Contacted Bryant who provided details of two Surveyors who had valued similar properties at the higher price
4. Surveyor spoke to them (1) was not aware of builders incentive and was considering changing his valuation (2) was reconsidering his valuation
5. Mortgage company feels there is a lack of clarity especially as Surveyor (1) valued property on bricks and mortar and builders incentive should not have made any difference and are therefore instructing a further independent Surveyor to view property tomorrow.
6. Call from Bryant to (a) express dismay at further valuation being carried out (b) advising us that certain incentives which were previously offered are now no longer offered (this is despite the property still being on the market more than a month after having to withdraw)

My questions are therefore this:-

1. If property is overvalued, how likely are Bryant to reduce price if we can get Coventry to write letter confirming that the two other Surveyors are reconsidering their valuations
2. How likely is it that the other two Surveyors had a cup of tea and looked at the plans on site rather than looking around the property and are now panicking, hence them confirming they are reconsidering their valuations
3. If property overvalued and Bryant reluctant to accept reduced offer, what are our chances of recovering £500 deposit and legal fees on the basis that we feel conned given the 5% builders incentive was actually no incentive at all given that property may only be worth the price minus the 5% incentive
4. Would Trading Standards be interested under the Sales of Goods Act

Thanks again in advance.

Regards
Donna

clutton_2

i think it is 99% unlikely that you will get any of your fees back, the small print will have all this covered. if you dont want to proceed, then walk away, and move on - i know this sounds harsh, but, i have seen exactly this same scenario many many times, and you will not win against the likes of the big property developers. its a bitter pill to swallow , i know.

suffolkb

If it is overpriced,then it will not sell.I assume that you thought it was worth the asking price or you wouldn`t have placed an offer.My guess is that you are being asked a big premium for a new house with new white goods.If the building soc had to repossess and re-sell,they would make a loss as the house and goods will no longer attract the premium.So the valuer will base his price on his guess of what the house would sell for then.
When my sis first got married they found this.They split shortly afterwards and found that they couldn`t get anywhere near what they paid a few months earlier.No one wanted their "used" house when they could get a new one on the same estate.