Selling House Over Market Value

foxy-stoat

So you have £37,000 cash in the bank already?  You will find that the house your buying will be over priced by £40,000, why would the builder buy your current house only to make a £40,000 loss?

Thrugelmir

time-4-a-new-start said:

Ozzuk said:

I would suggest a little caution - make sure you get a solid valuation on the one you are buying as you don't want to compound your negative equity problem (i.e. 40k from old house becomes 60k on new house).  

Yes the new house we are buying has been properly valued by both the estate agent and also the new mortgage company. 

I wouldn't rely on the opinion of an estate agent. 

Thrugelmir

foxy-stoat said:

So you have £37,000 cash in the bank already?  You will find that the house your buying will be over priced by £40,000, why would the builder buy your current house only to make a £40,000 loss?

Selling price has been inflated (or not discounted). Shows amount of mark up in new builds. 

time-4-a-new-start

The builder picked up the house from the banks repossession with no mortgage. I know the value of the houses in the area so know its valued correctly at 370k. 

Yes we are are looking at a mortgage of 333k with 37k deposit in the bank. The question of what is in it for the builder?

They have not been able to sell the house until now. Hence why I negotiated my house into the sale. So rather than me offer 40k under his price and then have to find 40k to clear my negative equity, its pay the full price and he over pays on mine. So its the same total of my buying it at 330k and selling mine to him at 140k.

The benefit of this way means I dont need to find 40k to pay the negative equity plus a further 33k for a deposit. And as mentioned, porting my current mortgage wont work as my current lender doesnt offer new mortgages. 

Jono111

Why haven't they been able to sell the house, is it overpriced, possible build issues or just no market.
I think it is odd for the builder to drop the price by 10% in one go.

GDB2222

Is the builder aware they are paying over the odds for your house? Won’t they need to get a valuation?

markin

As long as your happy that your new house will be in negative equity, How many more homes has the builder still got to sell?

time-4-a-new-start

The builder is buying my house with no mortgage, so the valuation doesnt impact him. 

Also the new house wont be in negative equity. It is currently valued at 370k and when we finish inside our estate agents valuation for it is 420k

foxy-stoat

time-4-a-new-start said:

The builder is buying my house with no mortgage, so the valuation doesnt impact him. 

Also the new house wont be in negative equity. It is currently valued at 370k and when we finish inside our estate agents valuation for it is 420k

Sorry what....
Your in -£40,000 with your current property.
You have £37,000 cash in the bank.
You plan on increasing the value of the new build by £50,000 by "finishing the inside".
The builder ( who is in the business of making money ) bought the house cash to turn a profit, I do not see how over paying £40,000 for your place and letting their new build sell for £50,000 less than an Estate Agents valuation after "finishing it" makes any sense.

I am out.

phillw

time-4-a-new-start said:

The builder is buying my house with no mortgage, so the valuation doesnt impact him. 

It might not affect his ability to buy, but it will affect his bank balance.
You may have found the mythical altruistic builder, but if he's taking a £40,000 hit on the property it's because he thinks either your existing property is worth more or the new property is worth less.
It would depend on why you're moving of course, I know someone who did something similar so they could relocate for a job and the increase in wages once they stopped having to commute meant it was a good idea moving forward.
Have you done all the searches? Plans for a waste processing plant or near HS2?