Abbey Valuation on New Builds

jonomassey

Hi,

We have today been told that Abbey have valued our new property at less than Barratts asking price. They have said there are no similar houses in the area and ours is the first of this style on the development to be sold and get this far. The house price is £163k and the valuation has come in at £140k. Barratts have said they think it'll be valued at around the £150k mark once they have put their case forward on how they came to the original valuation.

Obviously this is good news for us as it means we will be paying less for the same house but they have said they may take some of the benefits on offer from us like carpets and vinyls and a £500 contribution on solicitors fees. They have also given us a 5% deposit and we are part exchanging our property as well which as a coincidence has today had an offer on it accepted. They said they will still give us that as we need it to be able to have a 80% LTV.

My question is should we play hardball and still ask for carpets and vinyls to be included. I feel we are now in a good position seeing as they have sold our house.

Is anybody else in a similar position or have been previously?

holly_hobby

So actually what they are trying to say is that the "benefits" were not actually complementary at all, but factored into the selling price of 163k.

If the POS docs for the property state that these extras were free, and make no mention of any conditioning factors, hard to see how they can legally withdraw them.

The value of the house for mge purposes, is the value of house, its not your fault its been downvalued, but rather their issue for overpricing it. You agreed the extras independent of the valuation, and not as items being negotiated for and paid for as part of the agreed pch price & mge (unless of course they were).

I would dig my heels in, and get my solicitor involved - in my opinion unless their marketing docs, and your property pch literature, clearly states the inclusion of free extras i.e carpets etc, are strictly on condition of the property valuing up at survey - well I would argue they have no legal basis to now withdraw this aspects of the sale, that influenced your decision to A) purchase a new build form them or allow them to accept and sell your property as a part-ex.

Sure others wil be along - they may disagree with my thoughts, or give more guidance on their own experiences in circs such as this.

Hope this helps

Holly

jonomassey

The carpets were not included in the sale but we asked for them when they asked us what we would like as part of their offer to us for our house. We asked for a 5% deposit, carpets and vinyls, light fittings and they came back a good price for our house and then 5% deposit and carpets and vinyls, they wouldn't stretch for the light fittings. I believe they have sold our house at a loss so I think they are trying to get the most out of the new house by retracting the carpets and vinyls which would cost around £2.5k as an extra.

neverdespairgirl

Until exchange of contracts, though, it's all negotiation. Surely, legally, they can withdraw anything they like?

holly_hobby

So you're saying the extras were negotiated (and not standard freebies), but not in relation to the actual pch of the new build, but rather they were directly in respect of what dressings you wanted to the new build, if you allowed them to accept and sell your home as part ex on the NB itself ?

If thats the case, I would still argue the points I've raised in my earlier post - the extras are and never had anything to do, nor were based on, whether the NB would value up at survey.

If this were me, I would dig my heels right in, and present the cited arguement to them, and see where it takes me.

Otherwise, and as your own home has only had an offer accepted (i.e not yet gone to exchange/completion) just pull out the deal altogether.

You may find that your threat to pull out may change their mind, it may not, it also depends on how much you want to pch the property whether you will indeed remove yourself from the deal.

Hope this helps

Holly

pleasedelete

So the 163k included about 8k of deposit and carpets etc.

So the price is nearer £150k and the mortgage company say 140k.

Are you putting down any deposit?

What is happening to the equity in your current house?

I would be very very worried that you are heading immediately into negative equity on this property unless you have a big deposit.

If they continue to be valued at 140k then the builder will have to accept this or not sell.

New houses always take a while to get back to their selling price.

I would offer 140k and if they wont accept it i would walk. Are you in negativity equity on your current house?

jonomassey

We have got a deposit of £24.5k needed for the 15% and then barratts have put in 5% so we could get a good 80% LTV deal with the abbey. The reduction in price I guess could give us a extra £2k if we kept the mortgage at 80% based on £150k. Barratts are confident they can get to £150k as our plot has a large garden for a new build property but we will have to wait until barratts have appealed the valuation early next week i guess.

We have sold our house to them for £71.5k and this has just about paid off our existing mortgage but we did have a dreadful NRAM 120% mortgage that we have managed to clear down over the last 6 years.

jonomassey

Right update on this, Abbey have valued at £150k now so just waiting on Barratts to accept this valuation. The sales advisor on the development thinks they will as the drop is less than 10% of the £163k original sales price. So hopefully we'll have a mortgage offer with the new £150k sales price by end of play tomorrow.

liubeliu

Why so much effort to get valuation up to £150K. You should have bargained down as close to £140K as you can.

Two years ago we offered on a £225,000 on new build house. Valuations came back at £180,000, despite all the waffle from developer to speak to surveyor we walked away. Some houses still for sale and have been at £175,000 for at least 6 months. I am very happy that the surveyor gave us a reality check.

This was for a 3 bed semi. Manage to get a 4 bed detached new build five minutes down the road for £200,000. Was on sale for £235K but surveyor valued at £200K and develop matched as they said they always overprice due to down valuations and give themselves flexibility.

jonomassey

It was Barratts who wanted to increase the price to £150k, I would be happy to pay £140k if the valuation had indeed come in at £140k but it appears the detailed report Barratt sent to them made them increase it to £150k. I'm still happy to pay £150k due to the location of the plot and its in the area where we want to live as we have just got our daughter in the school close by and we have family in the area as well.

brit1234

jonomassey wrote: »

It was Barratts who wanted to increase the price to £150k, I would be happy to pay £140k if the valuation had indeed come in at £140k but it appears the detailed report Barratt sent to them made them increase it to £150k. I'm still happy to pay £150k due to the location of the plot and its in the area where we want to live as we have just got our daughter in the school close by and we have family in the area as well.

I think Barratts have shafted you, I would never buy one off there overpriced shoes boxes, they are negative equity traps.

You should of stuck to £140K