Mortgage Company valuation less than purchase price - what can we do?

Shadowplay_2

Thank you for all the replies.

We like the property, the area, the network links, (not the chavs) and intend to stay for a number of years (2-5). We previously applied for the mortgage (Nationwide) via a broker so they should have been well aware of the deal and mention it on the phone.

Obviously the property is not worth the price.

After discussion and taking into consideration advice i think that unless persiommons sell us the property for £157,995 (not a penny above) we are going to walk away (TBH i doubt they will sell at the above price).

Thank you again for taking the time to help :T

S.

lynzpower

why would you choose to pay 7k over what its worth.

id offer them 150, if you offer 157 you are already in 7k negative equity before you start.

Libra1975

It sounds like you have already made the (right) decision but I just want to put my vote with the walkaways!!

Guy_Montag

Shadowplay wrote: »

Thank you for all the replies.

We like the property, the area, the network links, (not the chavs) and intend to stay for a number of years (2-5). We previously applied for the mortgage (Nationwide) via a broker so they should have been well aware of the deal and mention it on the phone.

Obviously the property is not worth the price.

After discussion and taking into consideration advice i think that unless persiommons sell us the property for £157,995 (not a penny above) we are going to walk away (TBH i doubt they will sell at the above price).

Thank you again for taking the time to help :T

S.

2-5 years is just enough to take the shine off the place & make it very second hand - you'll not see a rise in price in less than three years, even if general prices keep rising. As Lynz says, you'll be owing more than it's worth from the outset.

Doozergirl

Debt_Free_Chick wrote: »

The price the developer wants for the property includes the face value of brand new fixtures, fittings, carpets & appliances.

However, a lender will only ever place a nominal second-hand value on these items.

The difference, at approx 10% of the developer's price, is typical IMO i.e. the lender will often value a brand new house at approx 10% less than the price the developer wants.

I'm not arguing with that but the houses that I sell also come with brand new fixtures and fittings, carpets, blinds etc and I have never have a property downvalued. I don't ask for a premium particularly either though mine will obviously be more expensive than an equivalent unmodernised house. Why don't surveyors take issue with that? Isn't the same principle? it's the same house

I don't get it. The f&f's argument must be the developers argument and the mortgage company's excuse for downvaluing. Am I talking rubbish?

irnbru_2

Guy_Montag wrote: »

you'll not see a rise in price in less than three years, even if general prices keep rising.

Here's another example.

This forum needs a sticky: New build. New debt.

Doozergirl

There's more than that!

There was one that was a converted mill in (Lancashire?) and there was vodkagirl who couldn't believe that her flat might only be worth what she paid for it when new new ones were selling for £40k more :eek:

Those ones spring to mind.

Debt_Free_Chick

Doozergirl wrote: »

I'm not arguing with that but the houses that I sell also come with brand new fixtures and fittings, carpets, blinds etc and I have never have a property downvalued. I don't ask for a premium particularly either though mine will obviously be more expensive than an equivalent unmodernised house. Why don't surveyors take issue with that? Isn't the same principle? it's the same house

I don't get it. The f&f's argument must be the developers argument and the mortgage company's excuse for downvaluing. Am I talking rubbish?

I don't think so

It's complex - the professional developers are probably more greedy. And, for a new build, there's no benchmark. For a modernised existing property, the benchmark is a similar property, not modernised.

In short, the lender is basically only valuing the bricks & mortar, with only a token increase for the F&Fs.

Perhaps you're too honest - are you a millionaire yet?

Doozergirl

:whistle:If I was a rich girl, nanananananananananananananana (did i get that right)
See, I'd have all the money in the world, if I was a wealthy girl
No man could test me, impress me, my cash flow would never ever end
Cause I'd have all the money in the world, if I was a wealthy girl
Think what that money could bring
I'd buy everything
Clean out Vivienne Westwood
In my Galliano gown... :whistle:

Not yet, no. I keep spending it. Life just gets in the way.

Guy_Montag

Debt_Free_Chick wrote: »

I don't think so

It's complex - the professional developers are probably more greedy. And, for a new build, there's no benchmark. For a modernised existing property, the benchmark is a similar property, not modernised.

In short, the lender is basically only valuing the bricks & mortar, with only a token increase for the F&Fs.

Perhaps you're too honest - are you a millionaire yet?

There was a new build in Chester I saw recently, the highest bid at auction (it was a repo) was half what was paid for it originally. Though it didn't make reserve price. :eek: