Halifax mortgage valuation lower than asking price (Charles Church new build)

jwren

Hi there, first time buyer here!

£500 deposit paid on a 3 bed semi plot of £192,995, bought off plan (still in construction, won't be complete until May/June), purchasing with the help to buy scheme (20% gov loan, 5% deposit etc).

Valuation came back today stating house prices on area, same type, around £180k-£190k, and this plot was valued at £190k.

I'm getting my stamp duty paid, flooring throughout and garden turfed as incentives.

How should I proceed? I've used an independant mortgage broker so far and just starting to pay my solicitor etc, can any negotiating the price be done through either of these channels?

Would it be advisable to offer lower than the valuation? There was another plot, same house, recently sold for £185K which came with an extra parking space and an extra window in the upstairs bathroom - the only difference is it had a smaller back garden.

Any thoughts would be appreciated. Many thanks.

amnblog

Speak to you solicitor. If it has not valued up presumably you will want to renegotiate.

CC will want this property sold by the end of June as I believe it is the end of their financial year.

Therefore the pressure is on them to do the deal.

mrchiggles

You'd have thought they wouldn't quibble over £3k!

kingstreet

I suspect the same Colleys surveyor has valued plenty of properties on that site, setting his own comparables in the process and an extra £3k is just a try-on by the builder.

I'd be surprised if they do anything but swallow the downvaluation, although you may find your stamp duty incentive withdrawn as a consequence.

lornaj1973

I had a similar problem recently with Colleys undervaluing by £10k on my new build. After 2 weeks and a case review led by Halifax, the valuer admitted he had valued the wrong property and another valuation was carried out which came in above the purchase price.

Admittedly ours was an unusual situation but it's worth double-checking the basics match up on the survey documentation.

But definitely take the advice already given already. Part of our case review looked at comparable sales completed within the previous 3 months, so if you can get that information, that would certainly help you.

jwren

Little update.

Charles Church are fighting the down valuation. They are saying the wrong cml form was looked at (which lists purchase price, extras included etc) she thinks is was next doors instead of ours (property is a semi) ......

In the 'Matters Affecting Value' paragraph, the following was mentioned

- properties in the area being affected by higher than acceptable levels of Radon Gas
My solicitor has assured me my property won't be affected..

- Sales incentives of £5k deposit and £3k allowance for flooring/turf
We are getting flooring to the value of £1900 and turf for £500ish. Not sure what the £5k deposit means - we are using help to buy, but this sounds like they're giving £5k to the purchaser

So it sounds like they have mixed something up - but would this equate to a down value of £3k?

The report also mentions that comparable properties in the area are valued at £180k-£190k - so regardless of the extras etc, the house isn't worth more than the £189,995 surely??

I think I'm more peeved that next door is most likely getting £5k towards his deposit too! XD

ethank

You cannot mix HTB-EL and a Gifted Builders Deposit. It is very common for new builders to offer a gifted deposit on new builds! I negotiated one on a previous house.

Thrugelmir

jwren wrote: »

So it sounds like they have mixed something up - but would this equate to a down value of £3k?

Plus the stamp duty. So £5k.

Ken-Johnson

We had the same experience Charles Church in Andover.

We reserved a Prestwick 2 House (to include carpets) at the asking price of £262,995

We liked the look of the show homes and thought the price would be indicative of a high quality home. Unfortunately it was just over-priced.

Our mortgage surveyor valued the house at just £249,000

We would have needed to pay cash to buy £14,000 worth of Negative Equity!!!

When we raised the issue with Charles Church they immediately reduced the price to £249,995 - they obviously agreed that the house was over-priced at £262,950 (but then they said they would not provide carpets, as previously promised).

We felt that we could no longer trust Charles Church so we withdrew from the purchase - even though we lost a lot of legal fees.

Make sure you don't commit financially until you have your survey.

Be careful and share with your friends.

dominoman

Ken-Johnson wrote: »

Make sure you don't commit financially until you have your survey.

Be careful and share with your friends.

A survey is a financial commitment.

The problem of houses being valued at less than the purchase price is common, and all you can do is pay up the extra from your pocket or try and negotiate a discount.

ML420cdi

jwren wrote: »

Hi there, first time buyer here!

£500 deposit paid on a 3 bed semi plot of £192,995, bought off plan (still in construction, won't be complete until May/June), purchasing with the help to buy scheme (20% gov loan, 5% deposit etc).

Valuation came back today stating house prices on area, same type, around £180k-£190k, and this plot was valued at £190k.

I'm getting my stamp duty paid, flooring throughout and garden turfed as incentives.

How should I proceed? I've used an independant mortgage broker so far and just starting to pay my solicitor etc, can any negotiating the price be done through either of these channels?

Would it be advisable to offer lower than the valuation? There was another plot, same house, recently sold for £185K which came with an extra parking space and an extra window in the upstairs bathroom - the only difference is it had a smaller back garden.

Any thoughts would be appreciated. Many thanks.

In this case who does the valuation?...a surveyor supplied by the builders IE Charles Church or a surveyor supplied by the institution lending the money/mortgage?....I'm guessing a lender would like a surveyor to undervalue the property rather than over value it?...