Response from Developer.......What do you think??????

Mark148

Advice requested please. The property was priced at £243.950 with an £18k incentive. This would have assisted in the LTV deposit if it was actually valued at near that price. I sent a letter to the developer asking them to contribute to the deposit or sale will not be able to go ahead due to difference in asking price and valuation and deposit requirements. This £18k incentive I belief to be bull???? Below is the email response from the developer



Dear Mr Blah Blah )


Thank you for your e-mail.

I believe there may be a bit of confusion with regards to your mortgage valuation. At the point of valuation the valuer is handed a CML disclosure of incentives form which details your purchase price of £243,950 but also that you are receiving an £18,950 discount from that amount bringing the actual amount you are paying us for the property to £225,000.

The purpose of the valuer going out the property is not to look at the market value but to make sure that the amount you are paying for the property is in effect, not too much. A valuation of £225,000 is exactly what we would expect as this is the amount being paid for the property. I recommend speaking to your financial advisor who will be able to clarify any questions you have with regards to loan to value and the deposit you need to pay.

If you have any further questions, please do not hesitate to contact me.

Kind Regards

Blah, Dee , Blah, Dee, Blah )


Your thoughts please:)

Ulfar

If the property is only worth £225,000 why have they priced it at £243,950.

So basically they are asking over the odds, go back and offer them 10% less than £225,000.

DVardysShadow

If it were worth any more than £225,000 then they would sell it to someone who would pay more. The pricetag of £243,950 is pure window dressing. So don't expect a mortgage based on a valuation higher than £225,000.

Mark148

Thanks for your take on it.

This is my response, do you consider it appropriate or too strong/abrupt:


Dear Blah, Blah, Blah,

I am aware of the process and have discussed it with my lender to establish the facts prior to the valuation hard copy arriving at my door. The lender values the property at £225,000 which is including any incentive offered. The original asking price was too high which in effect reduces any ‘incentive’ value as it can’t be used towards the deposit. The house is only worth what people are willing to pay, the valuation is done on the behalf of the lender to minimise risk and quantify the lending of funds.

As you know the LTV for NB properties is usually 80%, of which up to 5% can be developer gifted. The original asking price was too high which has now impacted on the amount required for deposit as the buffer between asking price and sale price would have allowed this to occur.

I am now not in a position to proceed as stated in my letter unless mutual agreement occurs.

It would be a shame for this sale to fall through however I am cognisant of that fact that it may and I am willing to pursue other local housing developments within 6 months suitably bolstered by a healthy 20%+ deposit in an even weaker and unstable market.

With kindest regards

Blah, Dee, Blah, Dee, Blah )

geoffky

Spot on,,,,You will require some money off the 225k so looks like 203k at the end of the day... They must of thought you were daft.

Mark148

Thanks for the replies, thi is giving me greater confidence in sticking to my guns and not allowing the heart to rule over the head. If anybody else would like to chip in it would be appreciated as a variety of opinions can formulate a well balanced a rounded position to haggle from )

silvercar

Either they are prepared to sell it at a lower price or they are not. The only advantage to them of creating a falsely high official purchase price is to fool other potential buyers, looking at sold data, into thinking that your plot went for a high price.

Ulfar

silvercar wrote: »

Either they are prepared to sell it at a lower price or they are not. The only advantage to them of creating a falsely high official purchase price is to fool other potential buyers, looking at sold data, into thinking that your plot went for a high price.

This is exactly the con they are trying to pull and for this reason gifted deposits should be made illegal.

Mark148

Am due to exchange on Friday but will not unless the developer 'chips' in more. What do you think the minimum should be that I would expect from the developer. There are no incentives such as carpets and tile styles etc as the property has been completed and vacant for a considerable time. It is the second to last property on a small development of 17 houses.

Thanks

Emmzi

The purpose of the valuer going out the property is not to look at the market value but to make sure that the amount you are paying for the property is in effect, not too much


..so.. the market value!

Be prepared to walk away, it's over priced by a HUGE amount!

Richard_Webster

Even if the developer agrees to some incentive like "paying a further part of the deposit" so as to reduce the amount OP pays for the house to below £225K the lender will then down-value the property further and only offer a mortgage based on the lower figure., so I am not sure what OP hopes to achieve.