New build undervalued----help!!

dunstonh

Gutchy1 wrote: »

Thanks, fully understand premiums on new builds, just cant believe the inconsistency in the valuation amount.

Surely the valuation is done on what the property is worth and whether your borrowing 95 or 5% it doesnt matter??

The valuation is done on what the lender could sell if for if it repossessed.

Loan to valuation is key when you are pushing limits or if the value takes you into a different interest rate band or takes you beyond their lending criteria.

Gutchy1

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Loan to valuation is key when you are pushing limits or if the value takes you into a different interest rate band or takes you beyond their lending criteria.[/QUOTE]

Thanks,

LTV is 75%. Mortgage required: 203K Puchase price: 269

Not really sure where to turn other than apply with another lendor?

amnblog

and get the same valuation?

Gutchy1

amnblog wrote: »

and get the same valuation?

we applied with the woolwich and santander at the same time....santander are yet to instruct a valuation...but as ive read on here they also use esurv!!!!! do they have to go back out, or could they use the valuation that has already been done?

Gutchy1

Thought I would post a reply/update.

After lots of phone calls and 3 months later Abbey agreed to send another surveyor, however the new surveyor valued at the same as the first...using the same reasons- no comparible properties!!

There are now 3 properties in the same row of houses (all new build and 3 bed) that have completed and moved in, the developer is not willing to budge on price as all 3 have completed and went for more than the one we are trying to purchase. Believe me I do not want to pay more than what it's worth but it doesn't explain how the 3 have valued up and the plot next door (same house) has been sold (not completed) for 10k more than ours.

My question is- what do I do now....the builder have under strict confidentiality sent 3 letters from solicitors detailing completion prices to the abbey to forward to the surveyor as comparibles..what are the chances he will amend the valuation?? Abbey have also advised we could get our own valuation done and if it reaches the purchase price they would be happy to use that ( does this actually happen?)

Any help SO p***ed off!!

silo24

Just to add, possibly the reason the other houses have completed at the higher price may be that the purchasers of the comparable houses have a lower LTV.

The reality is that the mortgage company want to ensure that the total borrowed can, in the absence of a huge market collapse, be paid off from the proceeds of a distressed sale, i.e. a repossession.

In this instance, they would still, for example, lend £150,000 even if the survey valuation showed the price to be £25,000 less than the asking price as they are still in a good position if the owner defaults on the mortgage.

I would risk instructing your own valuation and explain the problem. That way you at least have a fighting chance.....

Gutchy1

silo24 wrote: »

Just to add, possibly the reason the other houses have completed at the higher price may be that the purchasers of the comparable houses have a lower LTV.

The reality is that the mortgage company want to ensure that the total borrowed can, in the absence of a huge market collapse, be paid off from the proceeds of a distressed sale, i.e. a repossession.

In this instance, they would still, for example, lend £150,000 even if the survey valuation showed the price to be £25,000 less than the asking price as they are still in a good position if the owner defaults on the mortgage.

I would risk instructing your own valuation and explain the problem. That way you at least have a fighting chance.....

Thanks for your reply.

We have a 75%LTV... I thought this would be a good position to be in.....motgage required is still 50-60k lower than the valuation.

I have just rang them again and have been advised that we could pay for a re-inspection but the surveyor would be chosen by abbey, i guess thats not an issue......if they take the completed properties into consideration.

Still cant get my head round the surveyor saying there are no comparables, was was the first house built compared with???

Idiophreak

Gutchy1 wrote: »

Still cant get my head round the surveyor saying there are no comparables, was was the first house built compared with???

We were in the first house sold on our development. The valuer downvalued the property by about 15%. Builder had no comparables to offer as an argument, so reluctantly agreed to sell at a reduced price.

Just an idea: we actually offered another amount...like 5% above the valuation...just to show the builders that we were serious and that we were doing our best...They were faced with selling to us for our offer or risking only being able to sell to someone else for the valuation amount.

Everyone on here will flame me for saying that, because we "paid more than it was worth"...but the builder sold the rest of the properties at asking price in the end, so we still did well out of it...of course, in your case, the builder will be more confident of selling for a higher price if you pull out, because they have plenty of comparables already.

Peter_L

Can't really offer a definite answer but the situation is simple - that the builder won't (and doesn't have to sell for anything below their asking price) like anything in life, they can ask what they want for it. Likewise, lender won't lend above what they (through a third party) decide what is the price they perceive the value to be. Only way round this is through the builder (as you have already tried to persuade the lender). We were in a similar situation ourselves on our new build as the surveyor wouldn't budge even though the identical house which is a mirror image sold for £50k more a couple of months previous. I contacted the sales director of the building company (Bellway) and sent him the documents informing him of the predicament we were left with, his solution was for us to pay the difference separately ! Thankfully, a month later he lamented after I contacted him again as it was getting close to Christmas and he had sales targets to hit - the moral ? Their isn't one - it's down to simple supply and demand and a big dose of luck - fingers crossed it's getting to the end of the month and he has targets to hit ...