New build undervalued!

Fahm

Hi guys wondering if anyone could advise. I reserved a plot on a new build flat due to complete in october. All was going ok until the valuation guys undervalued the property by 20k! I was buyin at 210k and they have valued it at 190k and now this is all lenders can advance.

I have asked the sales negogaitor at the development to negotiate price as she is unable to provide any comparable evidence. She seemed unwilling, saying 'its up to you if u wana pull out'. Is she bluffing? Not a single other property has been sold at 210 yet. Shall i carry on trying to negogiate or am i wasting my time? She said half heatedley that she will contcat head office and see if they can change price. That its 'worth a shot'

Also lenders are saying they will not offer on a plot number, they need an actual address which the developers dont currently have as its not been built yet. How big of an issue is this.

Please advise guys! I reallllly want this property

dgtazzman

And I thought mine was bad at 12k under value, but then the surveyor the lender sent did more than likely measure up the wrong, smaller plot ^^

They're sort of admitting themselves the flats are overpriced if they haven't sold any of the other ones at 210k yet, or is that just me misreading you?

All you can do is try to get the valuation overturned, but you need credible data from other sales of comparable properties in the area within the last 6 months for this, which you don't have, so probably not going to work. You can try another lender, who's surveyor might be more generous in their valuation. You can try to get the builder to drop the price, or you can meet somewhere halfway and make up the difference out of your own back pocket, or finally, you can walk away.

That's pretty much the options you have.

CKhalvashi

What Dgtazzman says.

New builds are IMO often overpriced anyway.

getmore4less

Why try to get it overturned they have not sold one at £210 yet and completing in Oct.

if they have sold then you can be sure the surveyer knows that they are around £190k so hold out.

Whats the timescales for the rest of the site(or just that building) if they are compleing them in OCt they will need to start selling them.

Jon_B_2

They should have an address for it already. We reserved in Jan for completion this Oct and had an address as soon as we reserved in Jan.

Who are the developers?

dunstonh

New builds lose around 15% in value the minute you move in. This is in part due to them not being new any more after you have moved in and also because builders tend to overprice knowing that they will be including some furnishings or have some deposit offer or that they expect to be knocked down in value.

amnblog

You wont call their bluff until you pull out.


If you cannot complete anyway with the lower valuation, you may as well pull out and see what happens.

Brock_and_Roll

Given that new builds often lose up to 15% of their value within a couple of years, I struggle to understand why a buyer would want to go against the advice of a professional valuer and in all likelihood flush their entire deposit/equity down the toilet with all the problems down the line when it come to moving on, especially if house prices stagnate/fall.

Fahm

The developers are Lovell Homes. They haven't actually exchanged any contracts yet, as there was a delay with the solicitors on the developers side of things, therefore they cannot show any evidence that they have sold any at 210. the only evidence she can provide me was that one was valued at 205k yesterday. I dont know if I should try to get hold of head office myself as the sales people aren't being very active in trying to get this sorted for me, they're just sitting on it. She said she would compile some comparable evidence but hasn't been able to do that either.

Are they just planning not to do anything about it and see what happens and if I get desperate enough to cover the shortfall myself? I do personally think they have overpriced by at least 10k but im willing to pay 200k on this simply so I don't have to start the whole flat search process all over again.

I just feel stuck right now.

dgtazzman

Do you have the 10 grand to make up the difference to 10k? If you do and 200k is what the flat is worth to you, then put that offer on the table and tell them to take it or leave it.

I'd also be asking which lender is being used for the one that was valued at 205k and proposing to switch to that lender, on the condition that the builder pay all the related fees for doing so.

Fahm

Thanks. Added complication is the lenders that are willing to lend to me is limited, as I am a contractor so I cannot go with a usual high street lender. I am going with Kensington Mortgages. Arent valuation agents independent of lender? I am putting in a 25% depo, I have everything sorted in terms of finances and all that needs now is exchange of contracts. i think they would be a bit silly to pull the plug for 10k less, I do have the funds to make up the difference but i dont want to go higher than 200k as the property simply isn't worth that much.