Exchanged on New Build - Now prices reduced by 20%

fuzzipeg

Could we not consider that the contract had been frustrated, due to the significant changes (lack of mortgage, length of time between exchange and completion, bottom falling out of market etc.) which render the contract now a different one from that which was originally agreed?

Rabiddog_2

Might be worth checking to see if the Builder (or yourself) is covered by some sort of insurance, possibly paid for with part of the deposit, that covers this eventuality. They would probably still press for the full original valuation, or as close to it as they can get. Are you telling the whole truth or just wanting to back out after seeing the reductions in prices? *

* I am willing to fight a duel with Pistols if you think I am impugning your Honour (that's water pistols of course)

poppysarah

You've not got an independent solicitor and I suspect you need one urgently

ceestar

Ian_Griffiths_Halifax wrote: »

Before jumping into complaining about the Solicitors actions, I'd suggest a meeting with your Solicitors as, despite the fact that they are being paid by the developer, they are ACTING for you.

There may be a clause within the contracts that allows you to back out and only lose your initial booking fee if you cannot obtain a mortgage. I did see a clause once where it allowed the clients to back out if they couldn't get a buyer or if they lose a buyer for their house due to the long time between exchange and completion, but that's not the case with you.

Normally the developer expects you to exchange contracts within around 28 days of booking the property. If they know it's going to take 12 months to build and complete, then there is a lot that can go wrong in that time, as you have witnessed, and so I wouldn't be surprised if you could get out of it under some 'unfair contracts' law if there isn't a clause already.

I will speak to my solictor about this and see what they propose. I am simply covering my back, at this point it's all pure speculation until next month. We may get the mortgage again and the valuation may come in at the original asking price, which would mean that we don't have a problem.

ceestar

Rabiddog wrote: »

Might be worth checking to see if the Builder (or yourself) is covered by some sort of insurance, possibly paid for with part of the deposit, that covers this eventuality. They would probably still press for the full original valuation, or as close to it as they can get. Are you telling the whole truth or just wanting to back out after seeing the reductions in prices? *

* I am willing to fight a duel with Pistols if you think I am impugning your Honour (that's water pistols of course)

We were aware of the risks when we originally commited and treat this as a long term investment of 5-10 years. So am I not ecstatic about the price drops but appreciate the position we are facing. The main problem is if we cannot obtain the money required the purchase the property if the valuation drops then that's a serious problem. a) we can't afford to put in any additional funds b) we lose our deposit and may incur other losses.

This all seems unfair, as it's not our fault if the bank decide that we cannot lend the required money in order to purchase.

sdooley

silvercar wrote: »

This is going to be the next public outcry. Solicitors, valuers and mortgage brokers all in cahoots with the builders. Inflated valuations signed off by professionals, screwing the public with over inflated prices.

Whether or not the solicitor came from the builders, they are acting for you. They should not have put you in the position of exchanging on a contract with a mortgage offer expiring before the building was likely to be completed.

I would start shouting loudly at the solicitor. Hopefully he will go back to "his mate" the builder and sort out a reduced price that "his mate" the surveyor can value the property at.

:rolleyes: Solicitors can be blamed for many things but signing off on valuations is not one of them. Solicitors are not valuers and are not required to have any knowledge of valuation principles.

Waiving through "gifted deposits" on the other hand....:mad:

Conrad

ceestar wrote: »

the valuation may come in at the original asking price, which would mean that we don't have a problem.

You think so, in this market:eek:

ceestar

Conrad wrote: »

You think so, in this market:eek:

Probably not!

Well they will just have to sue us or drop the price then - Simple! Obviously forfeiting the deposit

Or perhaps we can pull the plug due to certain clauses within the contract. Surely, it will be better for them to keep the business rather than let us walk. We don't have any assets to sue for...

Incisor

sdooley wrote: »

:rolleyes: Solicitors can be blamed for many things but signing off on valuations is not one of them. Solicitors are not valuers and are not required to have any knowledge of valuation principles. ...

That's not the issue here. This is about the solicitor not advising the client of the risks of signing a contract which was open ended as to completion date, while only having a mortgage offer with a definite end date. Being paid by the builder, there is a definite conflict of interest here, since the mistake is in the builder's favour.

clutton_2

new build contracts quite often have open ended completion dates - builders cannot give precise finishing dates as so many things can go wrong en route during the build

i am sorry that you are in this dilemma - but you are one of many thousands who were caught out in the New Build Scam

You can bet your boots that the Developer has produced a water tight contract - he will have done this many times before - you really only have two choices -

pay a higher deposit (no one can pre-judge the property market and you can get your boots there are numerous "property can go up as well as down" clauses hither and thither)

or walk away and lose your deposit.

whether the solicitor was negligent or not - you have still signed a contract which is legally binding with the developer and you have contracted to buy the property -

i would suggest using all your energies initially in personally negotiating with the developers to see if you can get a price reduction and IF you get a solution then talk to the solicitor about negligence - attacking him now is not going to keep on "on-side" and you need his help in the short term - attack him later if you think it worth it