New build developer wants more money after accepting my offer

[OatsandMilk]

Hello, first post on this forum, but I've been following and learning for a while now.

I'm a FTB and I made an offer on a flat 3 weeks ago, paid the reservation fee and I've started the mortgage application process AND instructed my solicitors.

Yesterday evening, I got a call from the developer saying they just realized they undersold and gave me too much of a discount, so they are either happy to refund my reservation fee or I'll have to increase my offer by 10-20k. Is this even possible after they've signed the reservation fee and agreed to my initial offer?

The mortgage valuation hasn't come back yet, so not sure if I can even agree to this increase yet as I'm close to my max.

Looking for advice or if there's anyone here who has been in a similar situation.

Cheeky of them….my only interaction with developers was when I had paid the reservation fee and my bank instructed a valuation and it was valued at 30k less than than they were selling. I didn’t have a spare £30k and the back wouldnt lend it given the valuation. Developer wouldn’t budge so I withdrew (and ended up buying a much better flat elsewhere so in hindsight I’m delighted how it worked out but was gutted at the time!). They did end up selling it for the price they wanted but it took them nearly a year. And then of course house prices tanked (2009).

They must think they can sell easily at the higher price hence their dodgy behaviour…there is no way I’m buying that it was a mistake.

Worth pushing back but it would out a bad taste in my mouth and I’d almost be tempted to pull out due to their terrible behaviour.

Developers can, and often do, do what they like. Take your money and walk away - this is an alarm that they are going to be either dishonest/inept in everything they do.

You're in a no win situation. If you stick to your guns and they acquiesce you won't be able to trust they aren't cutting corners in your property to claw it back, developers aren't famous for their upstanding ethics. If you over-stretch yourself to find the money you could end up in a mess at worst and/or possible negative equity.
Horrible though it is, I'd take the refund and go.

@LoveItOrListIt yup I think you're right, just saw it relisted on Rightmove at 50k more. Not sure what games they are playing... It's just hard to start the whole house search process again, absolutely nothing out there that ticks my boxes

@Thesunrising yes I think they are being shady, will be hard to trust that they will keep to their word or even fix things in the future, etc..

@TopCatsTopHat You're right, thanks for the advice!

Will see what they say on Monday- but I've already started checking again on Rightmove :(

Get reservation fee back and look elsewhere. They are not to be trusted. Btw they put it on RM so would see it. Unlikely they could sell for £50k more.

Wow, that's shady as F*!
Can you name these reprehensible characters?

Get your reservation fee back AND any solicitors fees you've already incurred.

Is it Redrow
I heard they are notorious for this.
I would steer clear.

@Somanyquestions1984 that happened to us with Redrow. Upped the price by £10k one the plot was released.

Yes, they sound dodgy, ask for your solicitor and any other fees too.

@majorquimby
yes for us they added 40-50k within 4 weeks despite not selling any of the particular style.

This is worth a go, especially since they appear to have said in writing that this is their mistake.

Wow, i would be raging in your position. I can understand it to a certain extent if its off plan and there is a considerable period of time whilst they are building the property and material costs rise. But if you sign a contract to sell something that is already built etc and they raise the price because they think they can get more. Thats low.

We purchased a property about 16mths ago that was in the process of being built. Thankfully we traded in because the house we purchased, by the time we moved in, the equivelant houses they were building had shot up £30k. I think because we were trading in and they had sold our own house for profit (Within 24hrs) they stood by everything in the deal. I did wonder if they were going to play games when the saleswoman started pointing out how much more they were selling for.

Thanks everyone for replying.

Quick update - they indeed came back (after 2 weeks!!) and settled at an extra 20k, however they still haven't instructed their solicitor or sent through a formal notification of sale after 4 weeks, so it feels a bit like they are stringing me along. As a FTB it's a bit confusing, as it seems I don't really have any legal rights here even though they agreed to the sale (and confirmed over email). I guess I'll have to start house hunting again. 🙃

Developer is Peabody and Mulalley.

Pretty shoddy practice isn't it. Not pleasant being taken for a ride and know you're being squeezed like an orange unless a better orange comes along. 🙄