New build - 90% LTV - neg equity part ex - valuation lower than sale price!

MissMayflower27

So, we're buying a new build house with Persimmon (or trying to!)
Sale price - £210,999
Part Ex value - £106k
Stamp duty and £1k legals and carperts included

We need a 90% LTV mortgage and are going with Santander

Valuer been out to the propoerty and said max value in £190k -£21k less than we've agreed.
We can't afford to add cash to the mortgage so we've gone back to Persimmon to see what they will do

We think the house we're part-exing will be in ngeative equity - its on the market at £108k (since Sept 10) but valuation prob around £90-£100k. So unclear on if Persimmon taking a loss on this. Part ex price covers the mortgage.

So, any advice on what we can do??? Or is the answer nothing but hope!

We don't want to pay more than £190k now but have no real cash to put in as its all gone on the deposit. Do you think Persimmon are likely to stick to the original deal just on a lower sale price or do you think they'll tell us to get lost? We're one week from estaimted exchange.

Its the last house of its style on the development and only 4 houses are left to build

Advice appreciated!

beecher2

All you can do is tell Persimmon they either lower the price or you walk away.

MissMayflower27

Thats what we've said at the moment and they've asked for a valuation report

I just wanted to check really that standing by our guns was the right thing to do and see if anyone had an idea of how likely persimmon were to accept the lower price?

We really want the house but obv dont want to pay over the odds for it but its so hard thinking we might lose it

brit1234

As said above, they either drop the price or you walk away.

LongTimeThinker

Hi MissMayflower27, we are in pretty much the same situation. We are Part Exing and our survey came back late yesterday afternoon, value on the new build being £10K less than asking price. I think you have to find out why they have valued it less, if you dont know aleady.

For us I beleive we have a strong argument. The surveyor said along the lines of only 2 of the house types we are bying have been sold on the development, both sold for £10K less than what we are asking for and were a while ago, so thats all they have to compare with.

We cant afford to negotiate either, at the end of the day its not like its you thats come up with the value and are "trying it on" - its a qualified, independent surveyor who says its too expensive.

Have you sent them the valuation report? To my logic says they can't really argue, but it depends how much they want to sell (I would have thought there werent people queuing at the door to buy the house you are buying).

LongTimeThinker

Oh, I am not sure if this will help or not but for us we have our mortage agreed - although at a lower value. So I pointed out to them that we are ready to go, they just have to drop their price (which a surveyor said is too high). I also pointed out that there are a limited number of banks that go up to our LTV (85%) and that they will likely come back with the same valuation, so other potential buyers will have the same problem.

Maybe you could use that to help persuade them if you need to?

I've also heard that the builders like to keep the prices inflated, so maybe asking them to increase your part ex value could be an option, but I dont know if they are likely to do that or not.

HTH

SilverSix

As you've already got SD & legals included there's not really much option for them but to drop the price or give you more for part-ex. The latter being more likely as it will push up the average price of the sold houses on the development by keeping yours overpriced.

They wouldn't dream of giving you credit for upgrades as that's where they make their killings.

MissMayflower27

thanks everyone - we're waiting for the valuation report to come from Abbey and then we have to send it on to them. We've not seem what it says but our broker said it would just state the value!

The other houses of that style seemed to all go for £190k (coincidence?!?) and most sold in December so I'm wondering if that's where the valuer got his figures from.

We went to the site on Saturday and they still wanted us to pick our flooring etc and said this was only a minor setback (a week or so delay!?) so not sure what to think on that seen as we can't go higher than £190k as we can't get a mortgage, can't put more cash in and can't take less on the part-exchange.

Really wish we knew what they were thinking - I hope they just drop the price as that would be a great outcome!

pawlala

They're thinking we don't want to lose a potential sale, we'd better drop the price!

GMS

Santander will only lend 90% on new builds for First Time Buyers. You are not a FTB so 80% maximum LTV

Check with your broker that Santander are aware it is a new build

MissMayflower27

we thought that was strange about the FTB - the mortgage has been underwritten by Abbey though so does that mean they are happy with our status?

I am a FTB but my partner isn't (obv from the part-ex) but our broker said this would be fine. If it wasn't, would this have been discovered by now so we can assume we're ok on that point?

More worries?!:mad: