Advice house value dropped by 20% since last year

Hi

I was wondering if anyone can help - we put a deposit down on a house last year - it has taken ages to complete the new build and we had to reapply for a mortgage as the rates were no longer valid. Two independent valuers went out and the value has dropped by at least 20% compared to the asking price
Our mortgage advisor said to get our solicitor to send a letter to the developer - which we have done - has anyone come across this issue before. Do you think it is possible the developers will review the asking price?

Thanks
T

Thandi they might revise the price if you have a get out clause if you don't I wouldn't see them lowering their accepting price. What stage of the sale are you at?

on the 3rd and final snag - contracts have been signed - we have an agreement they will pay our rent because we sold our own property when we were due to close the deal - so the deal was they would deduct what rent we have paid from the final amount - if we don't go ahead with the purchase we loose this - i know we would have been paying rent or a mortgage in the meantime but not as much as we are paying - hope this makes sense its almost 20K on just rent

Think you have done very well out of developer already getting the rent paid for...

Don't think he is going to reduce the selling price for you

Why should he ??
If show on other foot, if house prices had risen in the same time frame do you think it would be fair of him to raise the house price on you ??

no not at all, but then they are insured and will be covered for their loss of income due to the 1 year delay that was not their fault.

Think you will find 1 year's delay was probably developers making.
He doesn't want to have too many houses ready before time as cash flow is tied up so instead they drip feed releases

Have you ever known anyone whose house was ready on time ?
I don't.

IMHO you have done very well to negotiate rent payments.

Presumably the rent will have been cheaper than your new mortgage repayments so you will also have had more time to save

Thanid, is the problem that the bank now will only lend against the new lower property value - rather than the value back when you paid the deposit?

Hi Lobby

Yes it is - the bank will not give us a mortgage for the full asking price.
As we have already signed contracts legally we are bind and could end up in court with the developers - in the contract it states they have 2 years to close the deal.
But surely if we can't get a mortgage no bank will give one to anyone else for the same property at the asking price.

you said developer is to re-imburse you for rents paid - almost €20k
Does this not make an difference to the mortgage required ??

"As we have already signed contracts legally we are bind and could end up in court with the developers - in the contract it states they have 2 years to close the deal.
But surely if we can't get a mortgage no bank will give one to anyone else for the same property at the asking price."

There are two strands here.

1. You agreed a price and signed contracts to purchase at that price. Legally, if builder is not in breach, then you are legally bound to complete unless you can negotiate your way out of the legally binding contract or unless the builder negotiates/voluntarily agrees to sell at a lower price.

2. You cannot borrow as much. This is separate - how you organise the funds is your problem. Someone else may not need to borrow.

mf

MF1 is correct. You have a binding agreement and are obliged to honour that.

However, the obvious route is to attempt to negotiate with the builder. Are they selling homes at the new lower price currently?

If these homes are aimed at FTBs then most other purchasers who bought off plans/significantly before completion will be in the same situation.