Help to Buy Undervalued

LittleFawn

Okay so to clarify:
I want the builder to take off the incentive pack, and for the valuer to disregard the incentive pack to bring the asking price up a little bit.
The valuer is taking the price of the incentive pack and everything else like the carpet off the purchase price.

need_an_answer

What was included in the incentive pack?

I doubt very much if that would have been taken into account when the valuation was done.

The way I see it is that there is a £10k shortfall in the sums and if you wish to continue with the purchase then my guess is that it up to you to raise that capital or negotiate the difference with the developer.

Its not additional incentives you need its a reduction in the purchase price.

LittleFawn

The incentive pack includes a TV, toaster, kettle, furniture voucher for £2000. Like I said it would be nice but I didn’t really want it.
The valuer did take into account the incentive pack and actually made the builders angry becuase they asked the price of every single item from the pack and took it off the price.
I will negotiate with the builder but I don’t know if they will drop that far. I’m on the verge of getting another valuation done. This one told me they would be back in 48 hours, took a week and half in real time and took the price of the incentive pack and other things off the price of the flat.

kingstreet

The HTB agent will require the agreed price, valuation etc to match.

The options are;-

builder reduces price (unlikely)

lender allows valuation appeal or another valuation

change lenders and hope the valuation matches the agreed price.

Builders have usually had their prices agreed in advance with the large corporate surveyors, so normally it's only the first one or two on a development which may cause that to be reset since market movements since the block/plan valuations.

If there have been several sales at the same price, the builder should be able to provide comparables (evidence of exchanges/completions) to back up their pricing of your property.

Finally, lenders aren't usually that bothered about non-cash incentives such as white goods. Their limitations usually apply to cash incentives such as SDLT, legal fees, builder deposits etc which would be limited to 5% or less.

kingstreet

LittleFawn wrote: »

The incentive pack includes a TV, toaster, kettle, furniture voucher for £2000. Like I said it would be nice but I didn’t really want it.
The valuer did take into account the incentive pack and actually made the builders angry becuase they asked the price of every single item from the pack and took it off the price.
I will negotiate with the builder but I don’t know if they will drop that far. I’m on the verge of getting another valuation done. This one told me they would be back in 48 hours, took a week and half in real time and took the price of the incentive pack and other things off the price of the flat.

Which lender was the valuation done for? Platform and Post Office/BoI are new to HTB where there may be early issues and Santander has a problem with soft furnishings as incentives for some odd reason.

LittleFawn

kingstreet wrote: »

The HTB agent will require the agreed price, valuation etc to match.

The options are;-

builder reduces price (unlikely)

lender allows valuation appeal or another valuation

change lenders and hope the valuation matches the agreed price.

Builders have usually had their prices agreed in advance with the large corporate surveyors, so normally it's only the first one or two on a development which may cause that to be reset since market movements since the block/plan valuations.

If there have been several sales at the same price, the builder should be able to provide comparables (evidence of exchanges/completions) to back up their pricing of your property.

Finally, lenders aren't usually that bothered about non-cash incentives such as white goods. Their limitations usually apply to cash incentives such as SDLT, legal fees, builder deposits etc which would be limited to 5% or less.

Thanks for the detail.
So my lender is Halifax, said they havn't had this much of an issue with a surveyor before.
I contacted my broker and he said that he will initially ask the surveyor if waiving the incentives pack would make much of a difference.
In the mean time he told me to get info from the builder Barratt, to get evidence of the similar style of property that has sold for their asking price.
I asked them for that today and the said they can't provide it because of Data protection act and that they will contact their head office on Tuesday (bank hols)
I also spoke with them about the news yesterday and she said "well we havn't had one come back that under" so I'm assuming that they are over priced and are aware of it.

They havn't said they wont reduce the price sssoooo, fingers crossed?

csgohan4

Tiglet2 wrote: »

My daughter is having this exact problem with HTB new build and a 5% deposit. Apparently us/in laws gifting an additional £10k to fill the gap is not sufficient. The lender has to value the property at the asking price. My daughter is now anxiously waiting for the outcome on her third lender's valuation. If this doesn't work, then she will have to find another cheaper "older" property without the HTB element. My heart bleeds for you - it seems that this so-called government help is no help whatsoever.

I disagree, the government doesn’t set the house prices, it’s the developers and their over priced flats/ houses that are the problem, not to mention the lease issues historically with ground rent etc. It’s not all the governments fault.

The developers also has to take some of the flak for land banking and waiting for house prices to go up for housing .

kingstreet

LittleFawn wrote: »

I am using the HTB scheme and 5% deposi

In which case, Halifax limits cash incentives to 1% of the purchase price (or valuation) so there's the issue for you with them.

LittleFawn

It’s not a cash incentive though. It’s goods incentive.
I got a letter from the surveyor today and he says that he came to his decision for the incentive I mentioned (worth £3k of stuff), flooring incentive, bedroom upgrades, bathroom upgrades, flooring upgrades, kitchen upgrade and hallway upgrade.
I literally didn’t enter into any other upgrade. I have no idea how the bedrooms or the hallways have been upgraded becuase there is nothing in them to upgrade! Barratt didn’t do any upgrades for me becuase it was too late into the build. I have no idea how he can state this.

ValiantSon

LittleFawn wrote: »

I asked them for that today and the said they can't provide it because of Data protection act and that they will contact their head office on Tuesday (bank hols)

What a load of tosh. These people clearly don't understand the DPA. Sale prices are a matter of public record. There is a delay between the sale completing and the Land Registry updating the public data, but there are no DPA issues.