Negotiation after low mortgage valuation - New Build

GGB

Hi all,

After negotiating what we thought was a good deal on a New Build property with Persimmon, the mortgage valuation has come in £15k short, leaving me in a position where I'm going to have to renegotiate with them once more. Could do with a bit of advice.

Firstly, the facts as they stand:

(1) Property was marketed at £220k as recently as April and has been on sale since last September. It will be ready to move into on the 24th June

(2) We negotiated a deal where we would get a £30k discount and a part ex value of £110k. Our house is realistically worth £95k-£100k. The mortgage valuation shows both the discount and part ex so nothing has been 'hidden' from anyone. There are no carpets etc thrown in.

(3) The week after we reserved a new release of properties in the same style as ours were made available at a price of £189k (guess my initial negotiations weren't as good as I thought!)

(4) Mortgage is for 85% LTV with the Principality and the valuation has come in at £175k - we have a full mortgage offer at this value.

For my new wave of negotiations I'm in a pretty weak position, the only way we can proceed is for Persimmon to drop the price of their house by £15k, but I'm trying to think outside the box on ways to give me more than the one option!

As things stand the only additional money I can bring to the table is the reduced deposit that I will need (£2k), I fully expect as a minimum my P/Ex offer will fall by this amount.

So my questions....

(1) If I were to now negotiate for carpets to be included in exchange for a lower Part Ex how would this now impact the mortgage offer? Carpets are going to cost me £2500, probably cost them £1k to fit so that potentially gives me something to play with again

(2) How can my financial advisor help? He was recommended by the site and has been great so far. When I spoke to him yesterday he said he would be speaking to the site manager today after I do, but I can't really see how he can help here?

(3) Is there any point in appealing the valuation? The valuer did visit the site, it wasn't just a desktop valuation. The property next door sold for a much higher value back in December (we know the owners so I know this to be a fact)

(4) Has anyone been in the same position recently? Persimmon's half year end is the end of June, hence the original completion date. This should work in my favour, but it's still a decent amount of cash to negotiate on!

Sorry its a bit of a ramble, just looking for a bit of advice on options for when the probable decline of my knid offer that they simly drop the price by another £15k for me later this morning!

shimano

be strong and ask for £15k off based on the valuation, and get the carpets yourself. Pretty sure they would be way more cheaper to get them done directly.

As for your FA, I'm pretty sure given he was recommended by them he will be biased to them.

Trust your mortgage company's survey more than Persimmon...look at the mess some people get into by paying over odds...you should be in line with the mortgage company's opinion as when you come to sell, guess what, another mortgage company will take the opinion of your house's value, not Persimmon

GGB

Oh don't get me wrong, my opening gambit is going to be for the £15k off and to fall in line with the mortgage valuation.

I'm realistic enough however to know that we have had an overvaluation on our part ex and some negotiating is going to be needed somewhere so looking for ideas. The carpets were just a thought as it will cost less for Persimmon to source and fit them than it would be for us to do likewise.

Thanks for the reply

shimano

I wouldnt be too concerned as on a net basis, you need to get them down to £175k, or as close as possible. It is maybe a lot to ask for (£15k), but personally I wouldn't handicap myself by being potentially an additional £15k down on any future price changes. The only case I would be less concerned about getting all of £15k off is if you are dead sure you will stay there for many years, the area/economy is good etc.

Bear in mind they may be over valuing your home so they can show it at £115k rather than £90k on their year end balance sheet, and also maintaining a higher cash flow, and it inevitably for many punters as they will be over joyed/emotional that they are getting a higher valuation and not be as realistic on the true value of the build.