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Everything posted by DeadCat

  1. Well, based on the valuation of 160k I submitted a revised offer of 157k with a 86/14% equity split. They rejected this but decided to throw in a free car parking space. I estimate this is worth 5k as the flat is in a town centre location. I rejected this and offered 165k with parking space and flooring (worth 1.8k to me) which they flatly rejected. I went back with 167.5k/parking/flooring which they again rejected but came back with a counter offer of 170k/parking/flooring (original purchase price was 172.5k). I rejected and went back with 168.75k/parking/flooring with a 83/17% equity split which they rejected and said that the 170k/parking space/flooring offer was their final offer. I can only afford a 82/18% equity split based on this. I'm deciding what to do and will let them know tomorrow whether I accept or walk away... This sounds as though they called your bluff?
  2. I know, its ridiculous. I was actually being sarcastic. They essentially want to charge me an extra 12k more than what the property has been valued at. Of course there is absolutely no guarantee that when I sell the property in say 3 years I will get 172k for it. The shared equity loans are interest free but they would get 21% of the equity when I sell. Shared equity is not the same as shared ownership. I think thats where some confusion is arising which I should have made clear. I will own 100% of the property but the developer has a 21% share of the equity. The equity share was originally 85% based on me obtaining a mortgage based on the value of 172k (I have 15% deposit which would mean a 70% LTV). Now that the mortgage is based on 160k in order to fund the difference the developer wants a 21% equity stake which would still mean im paying 172k for the property but the extra amount will only be crystallised when I sell. The 160k valuation was for 100% of the property. I hope I have made this clear.
  3. I should add that my mortgage would be with Nationwide who is only 1 of 2 lenders who lend based on shared equity.
  4. Builder is now offering a new deal whereby they increase their equity stake to 21% from the original 15% allowing me to still buy at the original price of 172k but take a mortgage on the valuation amount of 160k. In effect giving me a loan for the difference which I pay back when I sell. Hmm, sounds tempting... buy now, pay later! I may lose the 1k reservation deposit if I pull out now but at least I wont lose my shirt when I sell the property.
  5. I signed a reservation form. It says that either party can withdraw from the purchase prior to exchange if the sale is not progressing to either party's satisfaction. The deposit is non-refundable. It also says that contracts must be exchanged within 21 days and if not the developer reserves the right to remarket the property. They are happy to extend the exchange date as none of the events which have occurred were within my control. Similarly, the valuation was not in my control. You are spot on with your last paragraph. I personally think it would be unethical for them to pull out and also wrong for them to insist on the £172k original purchase price.
  6. I can understand how that is construed but the valuation has reset the goal posts. If the valuation came in at 172k and I pulled out then fair enough I lose the money. But if the developer insists on 172k they are trying selling me an overpriced flat which I will lose money on when I sell. They are being unreasonable in my eyes and therefore should return the £1k. It is not my fault that the valuation came in at 160k. To reiterate, I do still want to buy the flat, but only at the market value.
  7. I would rather go with the advice of a paid professional rather than my own gut feeling or even worse the developers fantasy island price. No, I can't afford to pull out an extra £12k out of thin air when I am already stumping up a hefty deposit. Who does have this kind of money lying around for this eventually?! How can I be prepared for that or anticipate it coming?! I dont think even the bimbo in the sales office would say what you are saying. If they pull out I'm pretty sure I won't lose the 1k. I'll camp on their doorstep and wee in their flowerbed otherwise.
  8. +1. GB is truly a madman. This might actually be good for HPC when the mini bubble eventually burts and despair sets in again. Maybe GB is a HPC convert who is secretly on our side?
  9. It looks like Labour want to go out on a high so when the mini bubble bursts it will be the nasty Tories who will get blamed. An autumn GE is looking more likely.
  10. I do not intend to pull out and have never said that. My concern was that the developer would pull out. If they do then I expect the £1k back. The reservation deposit is not what I'm worried about though. The flat's been valued at £160k. It is up to the developer to prove it is worth more. The comparables have failed. The only thing they can do now is pay for their own valuations in an attempt to swing my valuers opinion. I don't know why you are suggesting that I pay any more money. It's a good job that I am not an idiot because if I was and had listened to your advice then you would have cost me several hundred pounds. I hope that you are not giving other people the same advice. Flatbread understands my situation. I want to pay the market price, whether thats 160k, 165k, 170k or whatever. If the value is 160k then thats what i want to pay and the developer will have to agree or pull out.
  11. I understand what you're saying but surely it would be unprofessional and against the RICS rules of conduct to deliberately undervalue a property. The developer has supplied comparables but the valuer is still standing by the price. What you are saying now is that you are recommending me to pay money on further valuations in order for me to pay more for the property?! Either you think I am an idiot or you are on a wind-up mission. Edit: Or you are a developer, builder, estate agent or other VI
  12. The lender has employed the valuer to estimate the current market value of the property. This protects the lender as well as me from making a bad investment. I have paid the valuation fee, not the lender, so they are as much working for me as the lender. Maybe you could explain in better detail what it is I don't exactly get as I'm strugging to understand the points you are making.
  13. Thank you for your reply but I can assure you that I do not have a poor understanding of what is going on. I made the offer based on what I thought the property is worth and what they would accept. I had the finance to easily pay the £172.5k with my deposit and mortgage. I was not to know that the flat is worth a lot less than what I offered and what it would be valued at. I don't know if you are winding me up but why would the valuer value it any higher than my offer? He is working for me and the lender to ensure that I dont get ripped off by a developer over valuing their properties. The reality is that I had the finance to complete at £172.5k if it had been valued at that or a bit less (assuming the developer would accept a slightly lower offer). As the value is a lot less the lender will only lend me 70% of the value (I have 30% deposit). I dont have the money to bump the price back up to £172.5. In any case why would I if the flat is worth less than that?!
  14. Why should I lose the £1k if I pay less? The valuer has valued it at 160k and therefore this is what the property is worth on the open market. I dont want to pay more than whats it worth, doing so would be financial suicide. I could afford the £172.5k with a mortgage but if i can only get a mortgage based on £160k that means I would have to make up the difference out of my own funds which I dont have.
  15. Well at least we know what the vendor's favourite colour is..
  16. The flat has been valued at £160k and i'm not going to pay more than that in any circumstance even if I could afford it. The lender will only lend me 70% of the value and I cant afford to make up the difference (not that I want to).
  17. It mentions nothing about the developer being contracted to sell it to me. I guess that's only the case when we exchange contracts. I just wondered if anyone could guess what the developer would be thinking in this situation, i.e. should they pull out in the hope of getting a better offer.
  18. In a reverse scenario to that described in the Telegraph I'm not intending to pull out but I am worried that the Developer might due to the low valuation and my subsequent revised offer. We have not exchanged contracts yet. If I pull out then I lose the £1k reservation deposit which is fair enough. If they pull out then I would expect the £1k to be returned. I'm not worried about the deposit but I'm just wondering if they can or are likely to pull out if they can think they can get a better offer (what with the jobless recovereh, so called upturn, change in sentiment etc. encouraging their delusion).
  19. Thanks speedkelly. I like the house on the link you provided the value at which works out at just over £100k. I wouldnt offer any more than £85k for it though; I mean look at it - people can walk right up to your windows... and its north facing!! Edit: The fence at the back won't keep out intruders either. Overall I think the house is rubbish
  20. I recently offered £172,500 on a new build 1 bedroom flat in Surrey (sale price was £179,950 reduced from £212,000) which was accepted. Ive subsequently found that similar flats in the block have recently sold for £168-£170k and I was planning on gazundering the developer and offering £162k the day before exchange. There is no need for me to do that now as the lenders valuation came in at £160k. The developer was up in arms over this result and contested it immediately but the Surveyor is standing by the valuation. The sales woman in charge is of the opinion that the valuation is ridiculous (she is deluded) and even had the cheek to ask if I would pay the extra to cover the shortfall in the mortgage in order to make up the previously agreed sale price! This flat is one of the last to be sold in a development of 129 flats which were first marketed in 2007. The flat is in a good quality town centre location 4 minutes walk from the train station which has direct access to two central London stations. I have placed a £1,000 reservation deposit on the property. Does anyone know if the Developer can pull out of the sale, say wait 9 months and put it on the market again? Does the reservation deposit mean they contractually have to sell it to me? Thanks
  21. Thank you for that detailed post ChumpusRex. I am about to exchange on a new build 1 bed flat in Surrey which is a development of 129 flats. Im going to be living in the flat but I know that a good proportion of the flats are rented. You have described exactly the situation which I may find myself in within a few years time. Would you happen to know the timescale for when developers look to sell the freehold as I would ideally like to have sold the flat and got out by then. Thanks.
  22. Thanks Kingstonbear. Proximity to the station as well as the other amenities in the town centre, like the Virgin Active gym is very important. Thanks for pointing out the caravan site which I've just seen on aboutmyplace. I wouldn't have known it was there otherwise!
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