Surveyor has undervalued property.

Shumm

In process of purchasing a new build property.
Mortgage all sorted - subject to valuation.

Purchase price 179k
incentives from builder £15800 which including our 20k makes up the 20% deposit required for new build.

Mortgage arranged 80% LTV

Our mortgage is for £143,000

Surveyor has valued it at 165,000

So, question is - does our current mortgage offer stand because the surveyor has included the incentive of 15,800 from builder as part of his valuation?

OR - do we need to look at figures again?

Please can someone cast some light on this for us?

The sales office and the mortgage advisor are not available til monday.

liubeliu

Yep. Surveyors have to report incentives to the lender therefore things like PX, carpets etc have an adverse effect on the valuation coupled with some new builds also being overpriced. Lenders are very cautious and want a valuation based on resale (not new house premium) in the event of repossession.

Shumm

so does our current mortgage offer stand?

Shumm

Please can someone answer? We were due to move in at end of july - now it doesnt seem likely.

brit1234

I think it is a case that the asking price is overvalued not the survey undervalued.

Developers are notorius for overcharging on new builds. They rig land registry prices with gift deposits and optional extras. All this does is defraud the bank hence the big loses during the credit crunch.

Use the survey to haggle the builder down, declare everything to the bank or you can be arrested for fraud.

Sorry for sounding harsh but we are trying to stop you overpaying especially now house prices are falling again. You don't want negative equity from the start if you can help it.

betmunch

To answer Shumms question:

It depends on the lender. Sorry thats not much help.

I dont believe the offer will be produced to match the KFI you were given, however the advisor should know how the lender handles builders incentives and should not have told you that you will get this offer unless he was sure it would go though.

I'm afraid there too many questions about your original post to give a clearer answer. If you can say which lender you applied to that would help.

Shumm

Bank of Scotland.

Just done some more research - Builders were selling property for 165k less than 3 months ago.
Negotiation time I think.

betmunch

You could try telling them the valuation came back at £165,000, therefore by your calculations you should be paying £149,200 for the property after the incentives you were offered.

Be positive, it could happen, also you could be told where to go!

Let us know what happens

geoffky

buy him a big drink..he is saving you.. new builds near me..280k now accepting 150k...

Shumm

Update - it went to (allegedly) managing director level - who decided not to change the purchase price. We requested our reservation fee back nearly 2 weeks ago (£500). Where do we stand requesting the £350 surveyors fee back from taylor wimpey? At the moment we are £850 down. Please advise.

arby

£850 down is bad, but it's better than being £15,000 down