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Exchanged on New Build - Now prices reduced by 20%
ceestar
Posts: 22 Forumite
Hi All
I am hoping for any advice on our current dilemma. We have purchased a new build apartment in London back in Dec, which is due for completion in Oct of this year. Until recently, we were satisfied with our purchase.
We have discovered that other unsold plots within the devlopemnt have been reduced by up to £40k. We are first time buyers with obviously very little experience in the market.
The problem we have is that if we fail to complete the mortgage within a six month period from the date of offer - The bank will perform another valuation. If the other plot prices are to form a basis of speculation, it seems that expecting a revision on the original valuation could be on the cards.
The obvious problem is that, if the valuation is reduced, we are forced to pay the difference between the agreed price and the new valuation, which we are unable to pay, as we have strectched to purchase the property in the first place. We have exchanged contracts and understand that we are now bound and will have to face consequences. However, would the developers not yeild to the simple fact that if the bank will not lend us the funds, we simply cannot complete. Would they not simply rather not have the business, without having to attempt to re-sell in the current market? I understand that lenders are not prepared to offer mortgages on new builds unless substantail deposits are being provided. The obvious issues with the credit crunch and even the credit worthy reluctant to purchase because of the overly inflated mortgage products currently available?
The contract has been based on the standard contarct of sale 4th edition, is there anything in this contract, which touches on bank valuations etc?
Anyone in the same position or have managed to re-negotiate thier deals with developers.
Any help would be appreciated.
I am hoping for any advice on our current dilemma. We have purchased a new build apartment in London back in Dec, which is due for completion in Oct of this year. Until recently, we were satisfied with our purchase.
We have discovered that other unsold plots within the devlopemnt have been reduced by up to £40k. We are first time buyers with obviously very little experience in the market.
The problem we have is that if we fail to complete the mortgage within a six month period from the date of offer - The bank will perform another valuation. If the other plot prices are to form a basis of speculation, it seems that expecting a revision on the original valuation could be on the cards.
The obvious problem is that, if the valuation is reduced, we are forced to pay the difference between the agreed price and the new valuation, which we are unable to pay, as we have strectched to purchase the property in the first place. We have exchanged contracts and understand that we are now bound and will have to face consequences. However, would the developers not yeild to the simple fact that if the bank will not lend us the funds, we simply cannot complete. Would they not simply rather not have the business, without having to attempt to re-sell in the current market? I understand that lenders are not prepared to offer mortgages on new builds unless substantail deposits are being provided. The obvious issues with the credit crunch and even the credit worthy reluctant to purchase because of the overly inflated mortgage products currently available?
The contract has been based on the standard contarct of sale 4th edition, is there anything in this contract, which touches on bank valuations etc?
Anyone in the same position or have managed to re-negotiate thier deals with developers.
Any help would be appreciated.
0
Comments
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I dont understand. You must already have had a valuation in order to exchange. So why not just complete and lie in the bed you have made?
Or is it your plan to prevaricate and lose your mortgage in the hope that the builder will accept a lower offer and not just make off with your deposit?
Confused.[FONT=Arial, Helvetica, sans-serif]Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.[/FONT]0 -
If you've exchanged then I don't think there's much you can do? Sorry you did'nt see this coming...0
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The mortgage offer is usually valid only for 6 months. So, if they exchanged last December, their current mortgage offer is just about to expire and they will need to get a new one. Hence - a new valuation...Spring into Spring 2015 - 0.7/12lb0
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Do you still want the property? Does anyone know what the implications are of stopping the process at this stage?0
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I believe we would lose the deposit and possibly incur additional losses of the developer. We would like the property but it seems that we simply do not have much choice, as the we have been advised that it will almost certainly be reduced in value, especially as the other plots within the development have been cut so drastically.0
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There was somebody else posting earlier in the week that said they'd read their contract and if they pulled out they'd be liable for up to £50/day until the developer sold it to somebody else. Although I am not sure of the implications if the developer had to sell it cheaper, whether they'd still demand the difference from the OP.
One of the problems is that once you've exchanged you've promised under law that you will buy it. So pulling out now could incur a lot of charges. On the other hand, if you simply can't get the mortgage then you have no option.
I hope somebody comes up with a solution...0 -
Your position will obviously be much better if you can get the developer to reduce the price. They are not obliged to but may prefer this to not having a sale and attempting to sue you into bankruptcy.
However you would be best placed doing this if your bank's valuation is already in writing and don't be attempted to try and get the valuation lowered too much - all that will happen is the developer will force you to complete.
May also be worth having your contract checked over to see it's legally watertight - have there been any delays by the developer?0 -
obviously being contrite may help:rolleyes:
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PasturesNew wrote: »... One of the problems is that once you've exchanged you've promised under law that you will buy it. So pulling out now could incur a lot of charges. On the other hand, if you simply can't get the mortgage then you have no option.
I hope somebody comes up with a solution...
Buyer's solicitor should have spotted this and taken the time limit from the mortgage offer and put it to the contract to buy the new property. I would have thought?After the uprising of the 17th June The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee Stating that the people
Had forfeited the confidence of the government And could win it back only
By redoubled efforts. Would it not be easier In that case for the government
To dissolve the people
And elect another?0
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