Browse Forums Building A New House 1 Nov 10, 2014 7:37 pm my daughter and her Boyfriend bought a block of land at mandalay Beveridge vic. it was off the plan,they wanted contract subject to finance.Land Rep said developers don't do that.and all you need is pre approval.they got pre approval.Six months later land was titled,had land valved came back $35000 less than what they agreed to pay. they can't fine the extra $35,000.What can they do.they were told when they raised their concerns about not having subject to finance.Quote: in email you will be fine you have pre approval.They are two hard working people,this seems to be happening often.Hope someone can help Re: land undervalued by Bank 2Nov 10, 2014 7:56 pm Wow, that's hard but I don't know why they were told pre approval was enough Do they have a broker or a conveyancer who can help them? For my land I put down a holding deposit, then signed contracts with a finance clause of 21 days that my conveyancer and finance broker told me to have put in the contract (though the land sales office told me it was unnecessary a few times), once the bank valued the land and approved, then I paid the 5% deposit (this happened within the 21 days). Hopefully they can sort it out, but I'd say they need professional help ASAP. Re: land undervalued by Bank 3Nov 10, 2014 8:06 pm Thanks for your reply. Have both broker and conveyancer.As l said they had concerns,and were told not to worry.Was your land titled,it's a bit different with untitled land as banks don't give finance approval aprox three months out settlement.That is my understanding. Re: land undervalued by Bank 4Nov 10, 2014 8:33 pm Hi Pattycake, Most land vendors won't accept a "subject to finance clause". Can you get a sales list of what is currently for sale in the same development for the same lot size and has the price gone up? If it has, can you get this to the valuer (via the broker?) Here's what I would do, get that sales list and confirm there are no special promotions built in (like buy a block get $x rebate) and that the prices are definitely at least what they paid or higher - then get it back to the current lender/valuer, and if need be order another valuation from another lender. Worst case you have to start the process again but you're not scrabbling around for $35,000. Best case the valuer comes to the party and all is sweet. Your broker is going to have to do some convincing but it's not impossible. Good luck! Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: land undervalued by Bank 6Nov 11, 2014 4:52 pm Oh wow. I didn't know land sales people could not allow finance clauses in the contract. My land is untitled, it titles in June 2015, but I was still able to get my bank's approval now. I had preapproval, then found the land, then got the full approval. Gosh, good luck I hope everything works out. Re: land undervalued by Bank 8Nov 12, 2014 2:10 pm Hi jillybug,thank you for info.Mandalay told them they would find it near impossible to get that condition.could you tell me when and where that was. Re: land undervalued by Bank 9Nov 12, 2014 2:14 pm Thad unfortunate... My developers wouldn't accept a finance clause or accept pre approvals. Which is fair enough given demand for land. I had to have unconditional approval (which for an untitled block of land was effectively approval subject to the title being unissued). Sounds like the gripe is more with the bank than the developer of they signed the contract already. Hope they can resolve it somehow. Re: land undervalued by Bank 10Nov 12, 2014 2:31 pm Hi Beazley77,l have since learnt that a lot of Mandalay blocks untitled are been undervalued by banks average $30,000. Mandalay control price by a strict release of lots.l haven't spoken to them yet,hope to do so soon. Re: land undervalued by Bank 11Nov 12, 2014 5:12 pm Wow! So either the bank is valuing low or the developer is making way too much? That's such a tough one. Hopefully they can sort something out. I can't believe the developers won't allow preapprovals and such, what's the point of selling land to someone who may not be able to finance it in the end anyway? Re: land undervalued by Bank 12Nov 12, 2014 5:50 pm They allow pre approval,that means nothing.If conditions change ,market drops then banks valuation will be lower. That's why developers don't want you to have in contract subject to finance.If you can't make up the short fall,they keep your deposit. Re: land undervalued by Bank 14Nov 13, 2014 8:27 pm We had land undervalued as well. A key point for them to remember is everytime you apply for a bank to value the land, it adds an entry to their credit history. I would advice to involve a broker, a lot of brokers can help you with ordering an upfront valuation without actually applying for the loan with the bank. This saves your credit history hits. Good luck, hope they can get this sorted. Re: land undervalued by Bank 16Nov 17, 2014 1:14 pm Update,land revalued at price they bought it for.Again thanks for replies. How much are you ahead in payments compared to where the build is at? Have you fully drawn down the loan? 5 11916 Yeah I don't know why I came to a forum. Place is full of wierdos/pedos thought internet may help but I suppose I'll try my luck with someone in person. Cheers. I tried… 0 6441 Need advice on the backyard plan above. 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