Bank not counting parking space in apt valuation for mortgage offer

M

monkeyman

Registered User
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Hi,
I am buying an apt and the bank have come in at the last minute (due to close next week) to inform me that they cannot count count the car parking space which is in the valuation for the loan offer.

Apt Value = 355000
Parking Space = 45000
Total Value = 400000

They are now only going to offer me 80% of the 355000, which leaves me about 30K short.

I would have thought that a car parking space would definitely be included in the valuation of the apt. Would anyone know where I stand here?

MM
 
You stand as a victim of the credit crunch and the bank now knowing that your apartment is NOT worth €400k.

Go back to the developer, tell them you can no longer fund and get a price reduction to it's real value. If they will not reduce the price take the hit on the deposit as you will be buying an apartment for more than its worth.

You are not the only one in this position so it might be worth getting together with others in simular situations and working in numbers.

In the end the developers where taking you for a ride with respect to price, the bank have now decided, due to the credit crunch, they have a risk with your loan v the actual price of the asset and have in effect pulled out. You should do the same unless you can get the price down.

Not nice at all and i feel sorry that you have become a victim. Its dog eat dog so work hard and get what you can
 
Couple of additional items.

The deposit paid was 40K so walking away is not really an option. This was because we negotiated a discount at the start of 20K.

Based on a recent valuation, I have just negotiated another 17.5K off the developer. I'm happy to go ahead with the purchase, but now its going to be a struggle to get the extra 30K.
 
Try another lender?? Might be a slight delay in closing but I am sure the developer would wait another week or so.
 
monkeyman said:
Couple of additional items.

The deposit paid was 40K so walking away is not really an option. This was because we negotiated a discount at the start of 20K.

Based on a recent valuation, I have just negotiated another 17.5K off the developer. I'm happy to go ahead with the purchase, but now its going to be a struggle to get the extra 30K.
Click to expand...

let's look at the facts

you are buying something for 400k that the bank values as being worth 80% of 355k - that's 284 k

difference between 400 and 284 is 116k. That's your negative equity the moment you step in the door. In addition, property is going one way and at increasing speed as the recession deepens.

the 40k is gone, no point in being emotional about it - you can however avoid losing a lot more money by pulling out.
 
"you can however avoid losing a lot more money by pulling out."

KS

Can I suggest that you stop saying this? - you repeatedly say it as if it is a real option for all purchasers. Its not. It may work for some but given the state of the developers, they may have little option but to pursue defaulting purchasers.

People are being sued for attempting to pull out of legally binding contracts.

mf
 
Kemo_Sabe said:
let's look at the facts

you are buying something for 400k that the bank values as being worth 80% of 355k - that's 284 k

difference between 400 and 284 is 116k. That's your negative equity the moment you step in the door. In addition, property is going one way and at increasing speed as the recession deepens.

the 40k is gone, no point in being emotional about it - you can however avoid losing a lot more money by pulling out.
Click to expand...

The 80% is LTV, not what the bank are valuing it at. The valuation is for 400K including the parking space, but the bank will not use the 45K of the car park space as security. So you are saying the parking space is worth nothing and to walk away

If you have nothing constructive to say, then please don't reply to post.
 
Will you actually own the space or will you have exclusive use of it?
 
Kemo_Sabe said:
mf, you keep saying this!

can you please point me to some court reports that corroborate your assertion?
Click to expand...

Not Court reports. But (a) as a solicitor, I do practice in the conveyancing area and therefore have a considerable exposure to what is actually happening and (b) I am aware of my own personal knowledge of one developer in Dublin who is actively pursuing would be defaulters through the Courts.

mf
 
Also as a solicitor, I have 2 separate clients who are currently being threatened with proceedings by developers. Nothing has been instituted in either yet, but I fully expect one (who is one of the bigger developers) to carry out his threat.
If he does I will unhappily post it here.
 
If the OP is happy purchasing without negotiating so be it. It is his money and if there is a contract signed then he will have no choice other than to try and obtain a further discount.
 
Yep, I've tried the other lenders. Shouldn't be a problem getting the money, but the rates I'm being offered are 0.6% above what I have with NIB.

I have a few options now. Draw down the mortgage for the apt only and in March, purchase the parking space (subject to stamp duty). The developer is suggesting this. Until then, I'll have use of a parking space but not a designated one.

I have another property which is about 40% LTV, so I can up that to 50% LTV to draw down the extra 35K I need in March.

Its a bit messy, but I need to be 100% clear on implications so its with my solicitor now.
 
I'd get a contract in place to purchase the parking space in the future just in case the builder would sell it to someone else, I imagine would be purchasers would want a designated parking space and without one a property is harder to sell and of a lower value.
 
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