Help - how do I buy this house?

typeractive · 24 June 2009 at 9:48PM

Hi mse’rs

I’m after some help and advice. Usually my posts are long winded and I’m sure some people get bored so I’ll try and keep the points brief!

Basically, I’m interested in a property. I reached an agreement with the vendor on a price. I have to back this up with an agreement in principle. Visited my new mortgage advisor (whom I feel comfortable with – seems a good guy). We discussed the scenario:

House has failed to sell two times now. Initially due to the property having no kitchen (though it does have a sink unit plumbed to a cold water supply) I am informed. The house also does not have a working boiler. Having told my advisor this and supplied him with pictures it turns out that most lenders will not loan on the house being ‘uninhabitable’ as it has not hot water and central heating. Handy to hear this prior to survey costs of course. Some lenders will but with 2k fees and 6% rates – not what I want.

Here’s the thing. My advisor states that any work would need to be done prior to survey. Apparently surveyors will not revisit – is this the case?

I have negotiated to carry out certain works to the house (financed by myself) between contract exchange and completion, though of course the survey is usually carried out well before this.

I am puzzled what to do. I am willing to carry out certain work to the house to gain a habitable status with a lender, but when can I do this work? I’d need to get a corgi registered chap to come and quote / look at the job – obviously I do not have the keys. The vendor is not willing to do any work to the property.

I also need a good solicitor to help me, as it is a complex scenario. Where do I start there? What fees would I be looking to pay? Of course on the completion of any work I can do to the house – it could fail on another feature.

I’m excited about the opportunity and think it will make a great home and investment and don’t want to miss out.

It’s a bizarre situation I know, but really could do with some help guys.

Cheers

:beer:

G_M · 24 June 2009 at 10:47PM

Don't spend any £ on the house till Exchange of Contracts at the earliest. By which time of course the mortgage must be in place and valuation completed.
If the vendor wants to sell, most buyers (except cash buyers/developers who will offer less anyway) will have the same prob as you - so it's really up to the vendor to get it habitable before selling, or restrict himself to low offers from developers.

typeractive · 24 June 2009 at 10:58PM

The problem I'm going to have though is the house will fail at survey which obviously comes before exchange of contracts. I know what you're saying though I don't want to lose money on a survey for nothing. I'm prepared to do the work and pay for it. How can I get this sorted if the vendor won't help out here? :S It's like catch 22!

bitsandpieces · 24 June 2009 at 11:00PM

Won't you want to get a survey (homebuyers or structural, depending what you think it needs) before exchanging, to give you a sense of any other problems with the place? If needs-be, you can get a valuation survey for mortgage purposes after the work is done - an extra cost, but less risky than exchanging before the survey is in place.

You can exchange before you have a formal mortgage offer in place (I did, though in my case there were just a couple of forms held up, and I did have other - expensive, but manageable - finance I could have fallen back on). It's always a risk, though - especially if you *need* to have major works completed, successfully, and the place valued, before you can get a mortgage together. Could you get an offer from one of the expensive lenders in place, as a fallback, and then plan to get the works done in time to get a cheaper mortgage approved before completion?

Obviously, there would be risks involved, though. Definitely get proper advice before doing any of this - don't trust a stranger on the Internet... Can your solicitor advise at all on the risks? Is the house a good enough deal to be worth the risks and hassle?

typeractive · 24 June 2009 at 11:11PM

bitsandpieces wrote: »

Won't you want to get a survey (homebuyers or structural, depending what you think it needs) before exchanging, to give you a sense of any other problems with the place?

Yes- I'd want to know of other problems. The vendor told me other surveys showed a beelte infestation and risisng damp (though their solicitors hold certification of this work being carried out in 1999 - I have asked for specific areas - if it's teh kithen then I was already prepared for this).

If needs-be, you can get a valuation survey for mortgage purposes after the work is done - an extra cost, but less risky than exchanging before the survey is in place.

Right. So I could geta survey. Even if it fails I could do the work and then draft in another person to check it over to get the mortgage? Effectively what I was hoping for in a sense - a cehck up on the work that has been done.

Could you get an offer from one of the expensive lenders in place, as a fallback, and then plan to get the works done in time to get a cheaper mortgage approved before completion?

Right - I wonder if I can do this.Risky indeed, as I'd be hoping a second survey would deem the property as habitable.

Obviously, there would be risks involved, though. Definitely get proper advice before doing any of this - don't trust a stranger on the Internet... Can your solicitor advise at all on the risks? Is the house a good enough deal to be worth the risks and hassle?

I think the house is well worth it overall. I see these problems (at the moment...indeed I may very well change my opinions a few months down the line) as teething problems. The house has great potential - all of this work at the moment is fiddly and frustrating. I don't have a solicitor at the moment. My advisor has recommended me one, though I'm not sure what is deemed as expensive and what is fair yet! :S It's never straight forward is it? :S

bitsandpieces · 25 June 2009 at 12:04AM

I don't know of a reason why you couldn't get a structural survey now - sounds like you'll need one - and a survey to value the place for mortgage purposes later. Make sure you check, though - I've never tried to do this. Come to think of it, not sure how a bank/building society would be about arranging a mortgage after exchange.

It sounds like quite a risk - lots of work to do to have the place in good enough nick to get a mortgage on, with significant costs if things aren't completed on time (and these things often run into problems). It's a question of whether the return is worthwhile...I'd be having sleepless nights, but others may be less risk averse!

gizmo111 · 25 June 2009 at 12:08AM

Surely it would all depend on the amount of LTV and the cash you have available - and the mortgage co would put a retention on the works?

franklee · 25 June 2009 at 12:20AM

karenthemummy79 has just been through this type of problem but with a repo, see her posts here:

http://forums.moneysavingexpert.com/showthread.html?p=22000501#post22000501

typeractive · 25 June 2009 at 10:09AM

gizmo111 wrote: »

Surely it would all depend on the amount of LTV and the cash you have available - and the mortgage co would put a retention on the works?

My deposit would be around 20 - 25%. The vendor is not interested in working on a retention deal with me.

typeractive · 25 June 2009 at 10:15AM

My mortgage advisor has came back to me with another option. He has spoken to a lender who may be willing to offer me a 'bridging' deal.

This would be the process:

It would involve him lending me the money + your deposit - but no survey

So it would pan out like this..

1) exchange and complete in the normal way
2) he has a legal charge over my house (in the same way a lender would)
3) I carry out the works
4) I remortgage and pay him off

The cost for this would be approx £700 and work hopefully completed to pass the survey in 2 months (intially). There would be legal costs involved also, though my mortgage advisor doesn't seem to think this would be too much.

Any opinions? Indeed a risk. It's obvious the property is more geared towards cash buyers at the minute.

typeractive · 25 June 2009 at 11:44AM

...anyone?

Help - how do I buy this house?

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