Shared Ownership purchase - help!

geoffky

you will become poor rich ,,, new build flats are a quick way to lose the shirt off your back and then with shared ownership...you have the perfect storm...do your homework...how much are they selling for on the open market...use house.co.uk to find out all you can..

Idiophreak

ItMightBeUsefulOneDay wrote: »

Leaving aside the SO discussion...

A man tells you he has a watch for sale that you really want and is exactly what you've been looking for all these years. He says it's worth £234.75. You're a bit suspicious though and decide to have it independently valued. Your independent valuers say it's worth £220.00.

Do you pay
a) over the odds
b) the actual value of the watch
?

In this climate as a buyer, particularly a FTB you are a rare breed. Use it to your advantage and negotiate yourself a substantial discount.

Yeah, err...lenders aren't exactly "independent" when it comes to house prices...especially lenders that have taken a kicking in the last couple of years...Actually, when you think about it, the person buying the house is as, if not more, independent than the lender.

When I bought shared equity, we did a lot of research and decided that the FMV of 225 was "generous", shall we say, but not ridiculous. The "independent" valuation came back as 190, which we were quite gutted about at the time. Subsequently we agreed a price of 200 for the flat, which both parties were relatively happy with.

Subsequently, all the other flats on the development sold for 200 or more (a couple at the 225) within a couple of months. Ours is the biggest and best of the lot, so I find it hard to fathom how you feel an "independent" lender (much criticised of late for their aggressive downvaluations) is a better judge of the value of the place than the consumer. As people on this board keep on saying "a place is only worth what someone will pay for it..."

suljka

RichyRich wrote: »

Hi!

We're part way through the process of buying a shared ownership apartment and I'm hoping one of the experienced folk on here might be able to help us.

The landlord placed a FMV on the property of £234,750 and we're buying 25%. Unfortunately the lender valued the property at £220,000.

The lender asked us whether we were in any position to contribute to the shortfall - we replied that we weren't (if we were, we wouldn't be buying shared ownership, would we?!?).

However, they have appraised us and said that they will not accept £220,000. Our Sales Consultant has "suggested" that, if we can, we offer to pay an extra £1,000 for our share (i.e. a FMV of £224,000) - this would obviously mean finding the full £1000 as the lender won't lend against collateral that they think isn't there.

My sis was in the very same position as you, with lender putting a lower valuation on the property. After she said a very firm "No I can not pay anything extra... and if this lender is valuing it lower there are very big chances the others will too... if you are prepared to loose me as a buyer who is nearly there and start the whole process with someone else risking to only be told the same thing by another lender, than let it be so. So thanks but no thanks" she said while walking away :cool: Sure enough the HA knew it too so they accepted to sell at lenders valuation price.
My advice therefore - be prepared to walk away (slowly so they can catch up with you )... do not get tempted to try and find the extra money, but stand firmly outlining your good position and they might just accept the lower valuation in the end. You said yourself they are not shifting flats fast enough, and at the end of the day in this falling market the buyer has all the cards. So, just keep your cool poker face and fingers crossed playing hard to get will pay off.
Good luck!!!:)

121casa

Are you buying under the right to buy??

Svenena

You mentioned that you thought you would lose out anyway by having to pay another month's rent if there's a hold up, but if there's a hold up (because of negotiating), then you won't be paying that money for the rent/mortgage at your new place until a month later, so it's swings and roundabouts, surely? I'd play hardball, personally.