AH Devaluation (esp Marrsfield,Clongriffin) Banks only offer 80% of current valuation

D

dubc123

Guest
I got affordable housing in Marrsfield. Signed last year. Apartments only ready now. The problem is that banks are all saying that value has dropped so much and they'll only give mortgage of up to 80% of current market value which means I don't have enough. Anyone else in this position?
 
Re: Marrsfield

I'm waiting to close the sale, too. What bank is this one that only can lend 80%? How much was the apartment market value?
 
Re: Marrsfield

I'm with IIB. Checked with others and got the same story. Who're you with?
Market value gone from 382,500 (which I've been told was high to begin with) to 300,000. Was borrowing 270,000 but now with 80% rule can only get 240,000. The fact that I'm paying 277,500 when it's only worth 300,000 (and dropping!) means the discount I'm getting is tiny.
I thought everyone would be in the same boat??
 
Re: Marrsfield

Hi Posters

Paying E277,500 for a property valued at E300,000 works out at 7.5% discount........make VERY sure 7.5% is the clawback figure if you complete the purchase.
 
Re: Marrsfield

I'm with EBS, they have not mentioned the 80% limit, borrowing 250k.
 
Re: Marrsfield

Do you know if they've done final valuation on yours yet or are they going to? That's when the problem arose for me.
I was talking to guy in EBS last week and he said they operate 80% limit too. So you'd need to make sure that your apartment has market value of at least €312,500.
 
Re: Marrsfield

I was also offered an apartment in Marrsfield but have not yet been contacted by the council to arrange a viewing. My offer was from the 2008 draw, can't remember the month, March/April maybe? Does your offer relate to this draw or is it from an earlier draw?

I posted a thread at the time I was made the offer and i'm actually glad that the valuer has come back with what i'd consider to be the true value of the properties. AS another poster has said be very sure that your council clawback is based on this value and not an overly inflated value from the peak of the market.

If the banks are insisting on 80% LTV then you may be snookered as to the funds they'll advance unless you can come up with a larger deposit. Alternatively you could investigate whether the developer would be willing to sell at 300k in a straight sale, i.e. not an affordable sale, in this case I don't think the 80% LTV applies. You would of course be paying 22.5k more for the same apartment but you would be free from any clawback issues in the future.
 
Re: Marrsfield

I've also bought an apartment in Marrsfield and am waiting for completion letter which is due next week. I've been looking into possibility of having clawback reduced if the value has dropped. When I rang the selling agent they insisted the market price was still 370+ for 2 beds. The woman i was talking to seemed very cagey when i said i had bought an affordable home and told me she couldn't really talk to me, i should ring the council!!

Does anybody know what the steps are in negotiating a change in clawback with the council?

I've read on other posts that it has been very hard for people to get them to admit the change in value and to renegotiate the clawback. I presume if there are more of us aksing for the same thing they'll have to be look at it.

Advice would be appreciated!
 
Re: Marrsfield

well, i have asked the council about the clawback, as my valuer valued the apt that im getting less than what the council said. i did ask DCC, then they said they could arrange another valuation, but could result long delay, maybe 2 more month?!?!

so i dont think i would bother. as it is about 5% difference and i really want to move into the apt asap, cos the interest rate keeps going up! i just want to ask one more question, how long does that take for DCC to de-snag after u hand out the snag list, then sign the contract?
 
Re: Marrsfield

I've been speaking to AHP and basically they've said that because I've signed contract they can't renegotiate price or clawback. So I've decided I'm going to walk away. I'm assuming I'll lose my deposit but I just think the deal is not worth it now.

From my dealings with AHP it seems that if you haven't signed contracts they will re-negotiate. I think the first thing you need to do is to send written confirmation of lower valuation.

As for the selling agent saying the value is still 370+, must be great to be living in that little bubble were prices haven't dropped at all in the last year!!
 
Re: Marrsfield

dubc123 said:
I've been speaking to AHP and basically they've said that because I've signed contract they can't renegotiate price or clawback. So I've decided I'm going to walk away. I'm assuming I'll lose my deposit but I just think the deal is not worth it now.

From my dealings with AHP it seems that if you haven't signed contracts they will re-negotiate. I think the first thing you need to do is to send written confirmation of lower valuation.

As for the selling agent saying the value is still 370+, must be great to be living in that little bubble were prices haven't dropped at all in the last year!!
Click to expand...

She didn't even sound like she believed it herself, let alone convince me they hadn't dropped!!
 
Re: Marrsfield

Im in the same boat, we bought full price 405k for a 3 bed, approved for a 92% mortgage, but when the mortgage company valuer went out, valued it at 350k, now we dont have the extra to close the deal. Builder solictiors have said they are not reducing the price. Dont know what to do next :(
 
Re: Marrsfield

Found this on the AHP website forum:

Where an affordable home applicant has an issue with the market value of the affordable home, it is best to make contact with the local authority that is offering you the home, in order to determine what their policy is on handling such a query. It is advisable that you have concrete information on the reduced market value of the home, such as an independent valuation where similar comparables have been used to determine the value of the affordable home. Local authorities vary in their policies and procedures across the country taking into account their local area needs, so policies can differ.

Dubc123, does this not mean you should be onto the council and not the AHP?

On the next page I found this:
If the contract to purchase has been signed, then the purchaser

 Has consented to buy with all terms and conditions attached.
 Has received their letter of offer from the local authority which confirms the market value of the property.
 Signs the legal contract to purchase on the basis of this offer.
The Housing (Miscellaneous Provisions) Act 2002, section 9 subsections 1-4 indicates that the clawback is calculated based on the market value of the home at the date of sale to the purchaser. The date of sale is determined as the date of agreement to purchase.
Therefore, the local authority in this instance is not obliged to change their valuation on the affordable home once contracts have been signed by the purchaser.

Are they not two different statements or am I missing something??
 
Re: Marrsfield

Wonka, thanks for that.
Unfortunately it keeps coming back to the fact that I've signed the contract and the price is the market value at that point. I've instructed my solicitor to advise them that I won't be going ahead with it. We'll see if anything comes out of that.

35ivorytower, I'd say there are a few of us in the same boat!
 
Re: Marrsfield

Hey Dubc123,

That is terrible what has happened.

I had an issue with my clawback, a couple of weeks ago, and I sent a copy of the valuation that was done by the bank Im getting my mortgage done, they said it was 20K less, but I was onto AHP they said my sure its right before you sign contracts because they rarely reduce them after that, I did get mine reduced by 5%.

But the position they have put you in, is very unfair.

Best of luck, let us know how you get on.

As my mam says.

Things that are meant for you, wont pass you by.
 
Re: Marrsfield

Thanks for that carrieann.
Yes I'm trying to be philosophical about it. I agree with your mam!
 
Re: Marrsfield

homeboy said:
Hi Posters

Paying E277,500 for a property valued at E300,000 works out at 7.5% discount........make VERY sure 7.5% is the clawback figure if you complete the purchase.
Click to expand...
Very good point here!!! Get this in writing...be it in an email or a letter! This is the most important issue you should be aware of.

Wonka said:
Does anybody know what the steps are in negotiating a change in clawback with the council?
Click to expand...
You need to get an independent valuation done ASAP by a valuer that has nothing to do with the council. You will almost certainly get a valuation lower than what the council is telling you. They are renowned for not budging on their initial valuations as they hope people panic and give in. Dont be fooled!!!!! Unless you sign your contract you cannot lose your deposit so you have room for maneouvering.
dubc123 said:
I've been speaking to AHP and basically they've said that because I've signed contract they can't renegotiate price or clawback. So I've decided I'm going to walk away. I'm assuming I'll lose my deposit but I just think the deal is not worth it now.
Click to expand...
I know of one person who even after signing their contracts still managed to get the correct clawback (at the time) amended. Do not be intimidated by them, trust me, ive been there and bought the t shirt! The only reason they say they wont budge is they will lose more money than they anticipated. Affordable homes are not shifting as quick as they used to due to the drop in the market so dont just give in and walk away..you'll be surprised how tough you can get with them.
 
Re: Marrsfield

I put a deposit and signed a letter saying I was okay with the clawback, however, they have not sent "a contract", or letter of offer. Do you think there is still room for lowering the clawback if the sale is closed in the next six months? Is this initial letter saying asking price/clawback %, what people here refer as the contract?
 
Re: Marrsfield

hi everyone

i am new to this forum and have been doing some research on Marrsfield and found all your comments and advice very interesting and helpful. last year, i was offered a 2-bed apartment in Marrsfield for 275,000 and the market value of it then was 380,000. needless to say i was chuffed! the apartment should be completed and ready to snag in the next few weeks. i didn't put much thought into the clawback factor and have only started researching it now and am quite suprised at what it actually entails!! my plan of action for this week is to ring Pierse Homes and find out what the 2beds are going for now and then ring my valuer back and get his opinion of whether or not the market value has decreased much since the valuation he did a few months ago estimated them at 375,000! if there is a huge drop, i will certainly be contacting Dublin City Council for a reduction in the clawback percentage and then contacting my solicitor!!any help/advice/ideas/thoughts greatly welcome and appreciated!!
 
Re: Marrsfield

we have put our deposit down over a year ago now and have been told spring 09. they havnt even started building the block for starters??gettin worried bout the price situation now aswell. the clawback?? its a joke. affordable housing my This post will be deleted if not edited to remove bad language!!think its time to sort them out. plenty of us in this to get it noticed. i.e newspapers etc. prices are falling the past year yet their saying magicfield is just that, and staying up??could nearly buy a house in the local area for the prices now.
 
You must log in or register to reply here.
Back
Top