Discount market sale mortgage under valuation

tbo127

If the valuation on a first homes or discount market sale property comes  20% lower than full market value, does it matter if the discount from market value is 20%? 

CSI_Yorkshire

tbo127 said:

If the valuation on a first homes or discount market sale property comes  20% lower than full market value, does it matter if the discount from market value is 20%? 

If the valuation comes 20% lower than "full market value", then perhaps it wasn't the full market value after all.

dunstonh

If you are referring to new builds, then be aware that its a common "marketing" trick to say the value is higher but then say they will sell it cheaper than that as a discount.       The problem is that the house was never valued that high to begin with.   Lots of people get caught out by this when the valuation for the lender comes in lower than what they builder is selling it for.   Less common in a rising market but more common in a stagnant or falling market.

tbo127

  dunstonh said:

If you are referring to new builds, then be aware that it’s a common "marketing" trick to say the value is higher but then say they will sell it cheaper than that as a discount.       The problem is that the house was never valued that high to begin with.   Lots of people get caught out by this when the valuation for the lender comes in lower than what they builder is selling it for.   Less common in a rising market but more common in a stagnant or falling market.

Even if it’s a discount market sale property? 

tbo127

And yes it’s a new build. 

tbo127

Also, I’ve realised the discount market sales isn’t really “affordable housing” anymore since resale values are also going down and by purchasing a resale, I’d be at least £200 better off every month.  Is it worth £200 more per month to live in an “affordable housing” new build? 

RelievedSheff

tbo127 said:

Also, I’ve realised the discount market sales isn’t really “affordable housing” anymore since resale values are also going down and by purchasing a resale, I’d be at least £200 better off every month.  Is it worth £200 more per month to live in an “affordable housing” new build? 

You will find that the specification is lower for the "affordable housing" than it is for the "open market" housing even where the same house type is used for both.

They will remove en-suites for example and use a lower spec kitchen.

You may find that the resale open market housing is a better prospect longer term.

View both properties and have a look for yourself.

tbo127

RelievedSheff said:

tbo127 said:

Also, I’ve realised the discount market sales isn’t really “affordable housing” anymore since resale values are also going down and by purchasing a resale, I’d be at least £200 better off every month.  Is it worth £200 more per month to live in an “affordable housing” new build? 

You will find that the specification is lower for the "affordable housing" than it is for the "open market" housing even where the same house type is used for both.

They will remove en-suites for example and use a lower spec kitchen.

You may find that the resale open market housing is a better prospect longer term.

View both properties and have a look for yourself.

Not many decent properties on the resale market either at the moment though. 

pjread

I'd just ignore any talk of discounts and look at the price.  

Unless you have some specific info not known to the surveyor, the valuation is the best guide you have to the real market value of the property, whatever the seller tells you.

tbo127

pjread said:

I'd just ignore any talk of discounts and look at the price.  

Unless you have some specific info not known to the surveyor, the valuation is the best guide you have to the real market value of the property, whatever the seller tells you.

If that’s the case, do I have reasonable grounds to withdraw from the purchase and not exchange contracts? If there’s essentially no discount as they claimed in their marketing. Especially since I have to pass on the discount in any resale. It would mean I’ve lost money guaranteed just by buying it.