New build valued much less by Halifax

louiserer

Hi everyone,

Currently waiting for our mortgage offer, now found out they say their survey valued the property at 255k, we had agreed to buy at 272k. Based on 272k we planned to our down 20% deposit.

We're now waiting for contact back from the mortgage advisor, does anyone know what normally happens in this situation?

Thank you,

Louise

dgtazzman

1) You haggle with the builders and get them to drop the price - unlikely to succeed
2) Builders/advisor put a case to Halifax and try to get the valuation overturned - unlikely to succeed
3) You make up the shortfall yourself, i.e. find 23k under your mattress
4) You walk away as you conclude asking price is too high for the property and you loose any conveyancing fees etc. paid to date - the outcome when similar happened to us end of last year.

louiserer

I just don't know how it could be this wrong. Surely loads of other people would have had this problem too?

We've already paid some solicitors fees, the valuation and the reservation fee. Also our house was being part exchanged and has sold during the exchange period, they have their survey booked on the house we live in at the moment. I just can't believe this is happening now, we've supposed to have exchanged by Monday

RedFraggle

I don't think it's that uncommon. When I bought a new house (20 years ago) that was also valued about 10% under what we were paying. I considered it a bit like a new car, it was brand new, had our choice of fixtures and fittings, and was inheritantly worth less once "second hand" so we paid the premium.

dgtazzman

I forgot option 5, apply for a mortgage elsewhere and hope the valuer of the other lender is more generous - costs money and outcome not guaranteed

louiserer

They've advised we contact the company providing the valuation to see if this could be changed, the advisor kept saying now unusual this is with a new build.

I think this sounds very unlikely, has anyone ever managed to have a low valuation increased?

Will they only listen to one surveyor or is it possible to find a second company? Or do you have to change lender all together?

BallyK33

We had the same happen to us 5 years ago - agreed asking price of 382K, bank valued at 365K. After lots of arguments with the valuer, they increased it to £370K, we changed our product from a 70% LTV to a 75% so we borrowed more to free up more cash to make up the difference. Stressful time. There are 10 new builds on our development - a couple of us had this issue but others didn't, no real reason why, just think different banks with different valuers.
We have been here 5 years and had the house been valued correctly we could have remortgaged to a 60% a couple of years ago but it continues to be valued low and we don't know why so we have lost out on better mortgage deals because of this. Will be down to 60% next year thank goodness.
Good luck with it,

Daxx

Our valuation on a new build came back last week 5% under the agreed price. The developers were pretty easy to persuade to come down to the valuation price and we signed a new reservation form at the weekend for the lower price.

My opinion on the reason for this is that we are the final phase of the development to be completed and they are still yet to sell 2 other properties of the same style as ours so they were unwilling to lose the sale. If this were the start of the development I doubt they would have been so willing.

kingstreet

Don't forget, if you are getting cash incentives and your lender does not accept them, the valuation will be reduced by the amount of the incentives.

louiserer

We contacted the builder who said they would contact the surveyor. They sent examples of houses sold but the valuation came back the same as before. We have been advised to appeal again and send examples of other houses for sale in the same area to justify the price. I can't see this working though

All that money wasted for nothing

ethank

Many of the big builders use a recommended broker who know what the latest valuations are, and would place it with the right lender.