New build undervalued

Luke-ftb

Hi all,

I'm new to the forum and just looking for a little advice.
Me and my partner recently put a deposit down on a local new build plot near where we currently live, the plot is one which consists of only 8 houses 4 town houses/terraced and 4 semi detached all roughly the same size.

We applied for a our mortgage through lloyds (our bank) and were approved subject to valuation the valuation was carried out last Wednesday by colleys and came back 10k under the price we had agreed.
Price agreed was 155k
Valued at 145k

We received the report through and the surveyor has priced the property against comparables around the area. The house we picked was an end town house which was valued against other terraced/townhouses within 1/2 a mile and after checking there is no terraced house that has sold within the last year at the asking price of these houses.

We went back to the esate agents (saxton mee) which they're being sold through and they say the asking price is correct and the valuation is wrong. They are trying to push us towards another lender through there in house mortgage advisor which I don't like the sound of personally. The builder is adamant he will not drop the price despite only selling one plot (semi detached) which for some reason are listed at the same price as the terraced which seems rather strange considering the semi detached house in our area go for a lot more money. Sorry it's a long winded post but just after a bit of advice as if have thought there id a good chance the valuation from another lender may come back the same?. And also is it right for a semi detached house of literally the same size to be priced the same as a townhouse/terraced?.

Should have also said we are first time buyers have a 5% deposit using help to buy.

Thanks in advance

Thrugelmir

Is the builder offering any incentives of any kind?

Luke-ftb

Just turf and a fitted fridge. Which was not declared on the valuation report for some reason but I doubt it would make much difference to the price

Amst

I'd personally be inclined to trust the neutral/impartial valuer who is acting on both your and the lenders behalf in valuing the property (using comparables which also seem to undervalue the house) over the pushy sellers and builder of the property who are looking to make a profit on the sale.

But that's just me. See how quickly they agree to drop the sale price by £5k when you tell them you aren't interested anymore...

Luke-ftb

Thanks for your advice the estate agent literally can't answer any of the questions I've put to them, including how they actually valued the properties as they appear to have totally ignored the local market.

martinthebandit

I think that the thread title should be changed to read ‘builder overvalues new build’

Luke-ftb

I think you are probably right, just struggling to gauge whether it's the estate agents, the builder or a combination of the two that has set the prices and wanting the same money for a terrace as a semi detached seems bizarre? looking at it in hindsight. But I'm certainly no expert.

middleclassbutpoor

I would walk away if they are not prepared to provide an independent valuation which you can challenge your mortgage provider back with or agree to meet the valuation that has been given.

You are quite right to question why the Semi detached are the same price as the terrace - unless they are smaller.

New builds are usually priced at a premium compared to similar properties because they are new so you can pay for that.

Luke-ftb

I think that is what we are going to have to do. I asked them to provide an independent valuation but they refused. The only option they are giving us is another lender with a free valuation but that means another hard search for a mortgage on our credit files.

Luke-ftb

And no all the houses are the same size the terraced do have a South facing garden and decking area but that's the only difference..

Mr.Generous

I'd say the builder got it right, The price they valued it someone agreed to pay - That would be YOU! Any other valuation is a bit of a guess.

If no property could ever be valued at more than similar had sold for then how would houses ever increase in value in any given area?

The valuation is a warning to you that you are paying over the odds in their opinion, you can of course still buy it for that price but lenders won't want to advance a high percentage of the sale price. How much negotiation did you do on the sale price?