New build, Devalued, Vendor not coming down to new offer.. Any advise?

nisha.p

Hi all

Can someone please help. I have had quite a month back and forth with the agent, my lender and the surveyors .

Me and my partner are both first time buyers and looking to find a flat in London. We did eventually find a new build which the vendor has refitted a new kitchen and the bathroom is done well compared to other properties in the complex. No one has lived in it and it has been empty for the 2 years since it was first bought.

Our 2nd offer got accepted and we were willing to proceed Asap as we need to move out of our rental property. Unfortunately the valuation came back 35k below our offer and the agents complained that this one surveyor is doing this and has been devaluing properties since he is not from this area . So they gave us comparables of properties they have sold within this area in the past year with price per sq foot. The one we made an offer for was the lowest per sq foot.

A week passed and our lender said that the surveying company have decided not to overturn their decision . They have therefore told us based on the valuation we can only get this much and we have to come up with 35k extra or the vendor comes down.

I then wrote an email to the EA saying that I am willing to pay 10k above valuation but we can't put in any more money. The agent requested for the surveyor report. So I provided this so they could pass it on to the vendor. The report is pretty brief it explains that the property is in good condition but there is a commercial property below the flat and that is taken into account in the valuation.

Now they say the vendor is not going to come down to my new offer and that their agency manager has received an email from the area surveyor at E-surv and he has told them that he will look into the file again however our lender has closed the file so they can't reopen it. The lender has to do that. I have now been told that I have to push my lender and tell them to reopen the file because i have spoken to the area manager at e-surv and have a reference at hand. I asked the EA to forward me the email he received from E-surv and he mentioned that the email was sent to his manager and its therefore personal and can't be forwarded to me.


What does this mean ?? By the way the agent is foxtons. I have been dealing with a good agent but he's been quite pushy telling me the vendor won't come down to the valuation, hence i offered to give 10 K above valuation.


I don't think I want to pay more than the valuation but how often is it that the surveyor gets it wrong ? This property is big compared to London standards (over 1000 sq foot) however it has no views compared to some apartments in the complex which have views of the central garden. But those are smaller by say 200 - 300 sq foot and prob the same price. Although having a balcony makes the difference.

Can anyone advise. I am so confused whether I should even bother to ask my lender.

Many thanks,
N.

holly_hobby

The have been many recent threads on surveyors down valuing - especially new builds.

The surveyor has valued the property based on its specification, location, sq ft, and the fact its over commerical prems - he has given a value for mortgage purposes that he believes is a realistic and achieveable price in todays market. This is for the benefit of the lender, in the event that they possess the property, and have to sell it on the open market - but it also tells you quite a lot.

Why you would want to pay anymore is, without being nasty, quite beyond me. You have said that you have offered 10k above the val - the more you pay over an above the survey figure - the larger the amout of negative equity you are creating for yourself from day 1. As if its been downvalued for you, how do you think it will fair if/when you decide the flat is no longer suitable and want to sell it on yourselves. Unless you think there is another factor that will increase its value over the coming yrs ? (I would guess there isn't - as you already state its been refurbed by the Vendor after having stood empty for a several yrs).

You are a FTB - in no chain and already accepted for a mortgage (subject to survey) - it is a buyers market out there and you hold all the aces not the vendor.

The bottom line is that the agent has marketed the property at a vastly inflated price, either by his own volition or by the demands of the Vendor, a qualified surveyor has told you, its over valued by 35k (assuming you offered the asking price), and have further more flatly refused to amend their decision even after being presented with and considering comparibles (provided by the selling agent !!) - that should tell you something.

If the Vendor won't reduce to the survey price - walk away - the property is overvalued and the Vendor and Agt aren't being realistic.

If the sale falls through, it was not meant for you, there is something else brighter and better for you around the corner ..

Hope this helps

Holly

casualwalks

Excellent advice from Holly! I know its hard to walk away, but its better than being in negative equity from the start.

Ms_Scarlett_2

Totally agree, Nisha. I know how hard it is when you get your heart set on something (we had a similar situation earlier in the year when we fell in love with a property no one would mortgage as it was single skin walls and pre-fab, basically, but good space in an amazing location), but with all this evidence against it, this property is not the one.

This property has been owned but empty for two years now - that should tell you everything you need to know. Sounds to me like the vendor has got himself in a tight spot, can no longer afford to sell for a reasonable price as he's put too much in with all the refurbing, and is just now on a fast-track to getting his "investment" repossessed. Just because he's holding out for an unrealistic price, doesn't mean it's the right price. Of course the EA is going to back him up, and especially if they can smell your fear at losing it because you love it so much.

Walk away. You get one chance at being a FTB. Use it wisely.

Good luck!!

DannyboyMidlands

Why do you want to pay more than the place is worth?

Trollfever

No one has lived in it and it has been empty for the 2 years since it was first bought.

but there is a commercial property below the flat and that is taken into account in the valuation.

[STRIKE]Walk[/STRIKE] run away.

_Andy_

This is a money saving site. Why on earth would you want to spew away 10k more than something's worth? They must be rubbing their hands with glee

dunstonh

New builds historically lose money the minute you buy them. In a rising market fuelled by easy credit that wasnt an issue and masked it somewhat. However, in a steady market, the losses a new build will suffer are more obvious and that is reflected in the valuation.

With the commercial property below it, that does it no favours either.

If the vendor won't reduce then walk away and breathe a sigh of relief.

nisha.p

Thank you all so much for your responses. i do like this property a lot, its closeness to the station, size, newness.. but after the valuation i did feel that i had offered too much. But I guess i will have to walk away, the commercial property is a nursery so i was a bit afraid of its saleability in say 5 years time.

Thanks to all. !

dwsjarcmcd

nisha.p wrote: »

Thank you all so much for your responses. i do like this property a lot, its closeness to the station, size, newness.. but after the valuation i did feel that i had offered too much. But I guess i will have to walk away, the commercial property is a nursery so i was a bit afraid of its saleability in say 5 years time.

Thanks to all. !

I'm really glad to read this as so many would be emotional about it and try to persuade themselves this would be all right. As every poster has said buying this would have been madness but you have listened to the excellent advice. Well done you!

_Andy_

nisha.p wrote: »

Thank you all so much for your responses. i do like this property a lot, its closeness to the station, size, newness.. but after the valuation i did feel that i had offered too much. But I guess i will have to walk away, the commercial property is a nursery so i was a bit afraid of its saleability in say 5 years time.

Thanks to all. !

Good choice a big decision to make but hopefully the right one in the long term. You'll find another property you like,don't worry