current market value

I'm a bit confused about what happens if the market value drops. If for example I buy an apartment valued at €400k for €200k I get a 50% discount. If subsequent to buying from the council the market value drops to €300k, the way i understand it I then owe the council €50k in clawback if i have to sell in the first 10 years. But how does this work out, do you have to give them a cheque for €50k? Because as I understand it you wouldn't have built up enough equity in your house to get that amount of cash from a sale. i'm really not good with figures and am obviously a first time buyer, could somebody explain this to me please? Also what happens if the apartment market value actually drops below the original discount price of €200? I'm so confused and the people I call in the council are consistently vague.
 
I don't see how the council can expect you to pay for example 320K for AH property if the same property would only get that price on the open market from any private buyer. AH means Affordable Housing, which in my understanding means the council subsidise the cost by about 10%-20% thereby taking another person off their housing list. To the best of my knowledge the council usually only pay the developer after you have signed a contract, which means if it is now worth 50K less than 6 months ago, the council will pay the developer less also but I could be wrong. Check it out with the council also
 
lollops said:
has anyone had their AH valued themselves before buying?

I'm just concerned that I'm definitly getting it at the current market value. I'm sure the apt's have dropped in value since last year when the newsletter came out?
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Gosh lollipop, im in the same boat. Im afraid i dont trust dcc,s "affordable prices". I have heard frm bank of ireland that people have fought them on the clawback percentage & won by having the home independantly valued. This wouldnt reduce the amount u pay now for yr property but would reduce the clawback percentage due to them when u do sell. I honestly think their pricing is gd for banks & developers not applicants.
 
Had a meeting with the housing officer of my local council about when we would close on the purchase of my AH. I didn't mention anything about a revaluation, and then he said the council would revalue the property again since my offer letter was dated before Xmas and he admitted that the market had changed alot since then. The actual purchase price stays the same, but the clawback % will drop. So for those out there trying to get a revaluation, keep at it!
 
Im in the same boat with Kildare County Council, the valuation on my house was 20k less when it was done by the bank.

I am now fighting the council to reduce the clawback % before I sign the contracts, I wont be signing if the clawback isn't right, I have sent them a letter and also a copy of the valuation report from the bank who valued the house a week and a half ago. If I dont hear anything back I will be getting my solictor to write them a letter about the clawback. Its going to be a long road
 
emilybronte your calculations are incorrect in the example above
you would have to give the council 100k
the clawback in your example is 50%
50% of 300k is 150k but if by giving them 150k you end up with less than you paid(200k) then you only have to give them 100k so that you do not get less than you paid for the property,
not a bad situation in that the price of the property has fallen by 25% but you don't take a hit on what you paid for it.
 
Carrieann

Could you please keep us posted about how you get on with Kildare Co Co?

They're not the best of county councils......keep copies of all letters sent, dates, times of phone calls etc.

Hopefully the new valuation will be the one that's used, but as I say, do let us know.
 
emilbronte said:
I'm a bit confused about what happens if the market value drops. If for example I buy an apartment valued at €400k for €200k I get a 50% discount. If subsequent to buying from the council the market value drops to €300k, the way i understand it I then owe the council €50k in clawback if i have to sell in the first 10 years. But how does this work out, do you have to give them a cheque for €50k? Because as I understand it you wouldn't have built up enough equity in your house to get that amount of cash from a sale. i'm really not good with figures and am obviously a first time buyer, could somebody explain this to me please? Also what happens if the apartment market value actually drops below the original discount price of €200? I'm so confused and the people I call in the council are consistently vague.
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You're protected from negativity equity in this case. The council's clawback will be reduced so that you don't make a loss. For you to lose money the price would have to fall below what you actually paid for it.
 
Hi Homeboy,

Story so far,just after getting off the phone to the council, there issueing new letters today with the clawback % reduced, the girl said that there was alot of people on about the valuations for the estate we bought our house, so they have had to reduce them,she said the letters are going in the post today, Ill let you know if I get the letter, the girl I speak to is very helpful, is better when your ringing to have a name to contact
 
Got an email from my local council (Dundalk Town) this morning with a new valuation. It is now €200,000! Down from €240,000! Purchase price is still €182,000. If my calculations are right, that reduces the clawback from 24% to just 9%. Is this a record low for a clawback percentage?

This raises another question? Is the AH scheme under threat as subsidised and actual values begin to merge?
 
I think the Affordable Housing Scheme, could be in trouble, if the clawback % are going down, mine was 20% but the council are after reducing it to 15% because of the valuation reports

I cant believe yours is only 9%, I work with a girl and hers is 35% and she only bought Jan 07
 
January 2007 though was only after the market peaked, and that 35% clawback sounds about right for then. It's an eternity away now if you consider the current market. My original offer letter was in December 2007, which illustrates the change in 7 months.
 
Another idea people might consider now with the clawback percentage coming down steeply is to buy the council out altogether and be free of any of the usual AH restraints. My own own clawback percentage being 9%, it would cost me €18,000 plus legal fees I think.
 
You could probably re mortgage and buy them out with it only being €18,000, you can re mortgage cant you, purchasing under the affordable housing scheme
 
Artois said:
I got Empire Consulting to do a valuation on my affordable home. They are based on Morehampton Road, Donnybrook. They seem to be property market analysts and their valuation report was very effective, clear and concise. I forwarded their valuation to DL RD Co Co and I believe their valuation report helped push the council into putting a realistic valuation on the property.

Banks valuers are under an obligation inflate valuations to allow the bank lend money and are seldom objective and their valuations rarely correct. I have been told by auctioneers than they generally ask what the last property in the development sold for and put that price down as the valuation.

I have no connection with Empire Consulting.
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Empire Consulting closed down about a year ago. The website empire.ie is down as is the phones. They guy I know left go back to accounting about 18 months ago.
 
We are in the same boat. The market value of our house, according to the council, is 235,000 so we got an independent valuation done and that came back at 220,000 which is the same as the affordable price !! We asked the council if we could send in our valuation report but they said to hang onto it that they wouldn't be reducing the affordable price.
 
lollops said:
DCC's valuation of my apt is 370,000. I think thats way too high!

anyway...I was onto the bank where I'm getting my mortgage and one of the things I've to send them is a draft for 130 euro, and thats for their valuer to go and value the apt. So it'll be interesting to see the results...and even more interesting to see if it makes a blind bit of difference.
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absolutely. when we signed for our AH (should complete soon) the council and their selling agents said that they will not drop the price of the house no matter what.
 
Dun Laoghaire Rathdown have recently dropped their sale prices because the affordable price was now greater than the market value.
 
Dundalk Town Council had a large ad in the local paper about 3 weeks ago advertising AH in my estate. What I paid €182,000 to them last year for, is now for sale for €162,000. (2 bed apt). I think the actual market value is around €180,000.
 
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