New Build Downvalued

mi55pink

Just wanted to find out if anyone has experience with a similar situation.

We are buying a new build house with a Help to Buy mortgage. We were using Nationwide but the survey came back with a downvaluation of £15k.

The comparables on the development have sold for a bit less due to being sold once completed therefore Persimmon were keen to 'get rid' of them plus the prices locally have been increasing over the last 12 months.

Persimmon have said they will not reduce the price based on one survey and will pay for the next survey. So we are starting another mortgage application, this time with Santander.

We are happy with the purchase price but are concerned about what will happen if the house is downvalued again. Does anyone have any experience of this happening and do you know if Persimmon is likely to drop the price? I'm worried that they will not and we will be left unable to buy the house through no fault of our own.

Thanks

chanz4

try Halifax as they are more lax

[Deleted User]

I hope you have Persimmon's offer to pay for the second survey in writing. If not, ask for confirmation by letter.

Hoploz

I suppose if due to a valuation you are not able to proceed with the purchase, but it seems ok to you as a buyer, they could sell it for the same amount to someone who either doesn't need a mortgage, or who has a higher LTV (and hence their lender would be less concerned)

They are helping you out with getting a second chance, but ultimately they want the full price if possible, from whoever.

getmore4less

mi55pink wrote: »

The comparables on the development have sold for a bit less due to being sold once completed therefore Persimmon were keen to 'get rid' of them plus the prices locally have been increasing over the last 12 months.

What you really mean is builders overprices places in the hope someone will pay then sell for a true open market value if not sold once finished.

brit1234

Help to Buy = Help the builder charge far more than the property is worth for the builders benefit not the buyer.

Why overpay?

Do you not consider negative equity when you overpay with little deposit as all the talk of rising interest rates? Financial Suicide.

Use the original survey to hammer price down or walk away.

dgtazzman

Before you put in for another mortgage, check that the lender doesn't use the same surveying company as Nationwide, or it might all be for nothing...

Had it on a Barratt home around 2 years ago, that was downvalued by 10k or so, in the end we just walked away as the Barratt sales staff got pretty nasty over the whole situation. In the end it took them another year to sell the place...

Don't despair if you do end up walking away, 3 days later we found another newbuild a few streets away from the Barratt house that had an extra bedroom and a nicer layout for 10k less, some things happen for a reason...

chopper78

Another mortgage application means another marker on your credit file which could be very detrimental, especially if it also comes back at £10k lower value thus meaning you might struggle with a third mortgage application if you walk away and choose a different property.

Jon_B_2

I've recently bought a new build, which all went through OK.

I did ask my broker whether new builds came under value very often and he did say that only a handful of cases come back undervalue.

With that in mind, I'd probably walk away from a property that came back undervalued as a new build as they are generally above market rates anyway.

Probably a blessing in disguise as Persimmon have a shocking reputation anyway.

somethingcorporate

Use it as a basis to renegotiate and play hardball or walk away.