New Build with Part Ex and Low Mortgage Valuation

toneb_2

I have recently reserved a new build which is a 4 bed detatched at £244,995. The developer is taking my house in part exchange at £160,000 which was only slightly lower than what I had it on the market for. Everything was going to plan until we had the Leeds Building Society value the new build.

It came back at £200,000! We found out that The Leeds have a policy of valuing new builds at second hand prices. We changed to the Nottingham Building Society in the hope of a more realistic valuation and after 3 weeks of processing the application, their valuation has come back at £225,000. Because they will only lend us 80% LTV, our only option seemed to be to put in a lower offer on the property. Of course when we spoke to the developer they wanted to appeal against the valuation saying they had not had problems on same design properties on same develpment but some of which they sold back in June 2010 according to the land registry records.

I have pointed out that even if we took the average of the 3 we are at £223,333, so I have said I will offer them £230,000. I know for a fact they are taking a loss on my part exchange as they have accepted an offer of £151,000 plus they will be paying estate agent fees.

So, do you think taking everything above into account that the offer of £230,000 is a fair one? Any other advice?

Thanks in advance for your input.

poppysarah

So what was wrong with the lowest valuation of £200k?

As soon as you move in it'll be second hand and worth that much.

Orpheo

toneb wrote: »

I have recently reserved a new build which is a 4 bed detatched at £244,995. The developer is taking my house in part exchange at £160,000 which was only slightly lower than what I had it on the market for. Everything was going to plan until we had the Leeds Building Society value the new build.

It came back at £200,000! We found out that The Leeds have a policy of valuing new builds at second hand prices. We changed to the Nottingham Building Society in the hope of a more realistic valuation and after 3 weeks of processing the application, their valuation has come back at £225,000. Because they will only lend us 80% LTV, our only option seemed to be to put in a lower offer on the property. Of course when we spoke to the developer they wanted to appeal against the valuation saying they had not had problems on same design properties on same develpment but some of which they sold back in June 2010 according to the land registry records.

I have pointed out that even if we took the average of the 3 we are at £223,333, so I have said I will offer them £230,000. I know for a fact they are taking a loss on my part exchange as they have accepted an offer of £151,000 plus they will be paying estate agent fees.

So, do you think taking everything above into account that the offer of £230,000 is a fair one? Any other advice?

Thanks in advance for your input.

You should offer 260k. Why pay less?

toneb_2

poppysarah wrote: »

So what was wrong with the lowest valuation of £200k?

As soon as you move in it'll be second hand and worth that much.

I do appreciate that but I also appreciate that different surveyors would see it at different values and I personally felt that £200,000 was too low even though I would have loved to have got it for that I don't think it was a fair valuation based on other 4 bed detatched in the area.

toneb_2

Orpheo wrote: »

You should offer 260k. Why pay less?

Why £260? That's 15k more :eek:

Wickedkitten

toneb wrote: »

I do appreciate that but I also appreciate that different surveyors would see it at different values and I personally felt that £200,000 was too low even though I would have loved to have got it for that I don't think it was a fair valuation based on other 4 bed detatched in the area.

Are all of these other 4 bed detached new builds as well?

Gwhiz

toneb wrote: »

why £260? That's 15k more :eek:

w h o o s h !!!!!!!!!

toneb_2

Wickedkitten wrote: »

Are all of these other 4 bed detached new builds as well?

Other 4 Bed New Builds in same area range from £200,000 to £265,000. The lower priced ones are either smaller than the one we are buying or in some cases are semi's.

Other second hand 4 bed properties range from £185,000 to £275,000 just depends on area and condition of the house really

Wickedkitten

toneb wrote: »

Other 4 Bed New Builds in same area range from £200,000 to £265,000. The lower priced ones are either smaller than the one we are buying or in some cases are semi's.

Other second hand 4 bed properties range from £185,000 to £275,000 just depends on area and condition of the house really

Personally I would discount the ones that are new builds because they will all be subject to the same developers premium.

The bank, whilst you may or may not agree with them, are telling you right now what that they would value your house at 200k if you did manage to buy it for 244k.

mrs-h_3

Where is the house? We are currently doing a part ex and going through Nottingham too, your post has made me very twitchy as to what our valuation will come back at now on the new build eek:o

toneb_2

mrs-h wrote: »

Where is the house? We are currently doing a part ex and going through Nottingham too, your post has made me very twitchy as to what our valuation will come back at now on the new build eek:o

In the North West near Preston. It would appear that, rightly so, the surveyors are not just taking the developers "asking" price as the value. Though it would seem that my developer would like us to keep having it valued until someone does agree with them. I am trying to be reasonable and base my offer on the average of the 3 valuations - theirs, The Leeds and The Nottingham. Just not sure what sort of mark up is in a new build and if they will have enough to play with to accept my offer, taking into account they are probably losing 12K on my part ex.

Good luck with yours