House sale crumbling!

1sttimer2008

We currently buying a house and we are almost at completion stage(we were on way to solicitors today!) The house we're buying was on the market for £119950 but we had an offere excepted of £93000. It required alot of worker so we budgeted for £5000 deposit and £2500 for rewiring and minor things just to get us in and then we'd do it up slowly. Survey arrived back at weekend and was awful loads need doing before we move in Chimey stack repointing, damp proofing, some movement in past has caused crack that needs doing asap, lead piping needs to be changed to copper and so on. Plus was only valued at 93000. Realising we needed every penny of the £5000 dep we went to estate agents to ask them to approach vendor and ask them if they would be willing to do vendors gift and pay the dep, although there is no mortgage on this property they wouldn't actually be paying anything but for the benfit of not having to redo mortgage offer and of freeing up dep funds for needed repairs it seemed like the easiest option! Thought they would have no problem with this as property has been on market for a year with no interest other than ours but they've refused!!! what should we do now? are they just calling our bluff?

ginvzt

The valuation came at what you offered - I am yet to hear of the valuation to come higher than the offer accepted!

Besides, if you get 'gifted deposit', don't you have to pay taxes on it? I am not sure, someone will be here soon to explain all this.

lethal0r

I have read elsewhere on this forum that the survey always values the house at the accepted offer price.

leave your offer on the table and wait a month, im sure they'll be in touch.

Premier_2

The property had been on the market for a year you say?

Eventually, you agreed to pay £93k and the vendor agreed to sell at £93k

The property was therefore valued at £93k

Why should the lender be mis-led into believing it is worth any more than £93k?
Clearly no one is willing to pay any more than £93k so it can't possibly be worth anymore than £93k.

1sttimer2008

Update they came back to us willing to meet over halfway...we give £2k and he'll waiver the other £3k but does any1 know how it works. We can't adjust our mortgage because mortgage company will only lend 95% so estate agent said we could leave it as if we're paying £93k so is it a case of we'll pay £2k and the vendor will appear to pay on paper £3k?

silvercar

You need to phrase it right and declare to te solicitors and lender what you are doing. Ideally this should have been done before valuation.

So you want price 98k, vendor gifted deposit 5k. You then get a 95% mortgage of £93,100, pocketting £100 and the vendor gets their money. All perfectly legal if declared openly.

The other way of doing it, particularly post valuation, is for the vendor to agree to contribute to the cost of repairs. So you then tell the lender that the vendor has agreed to pay £3k towards the cost of the repairs and you feel this will increase the value of the property. You then say the property will be worth 98k, you are seeking a 95% mortgage, so £93k and you have to pay 2k. The lender may agree outright, or they may agree subject to your solicitor with holding some money until the repairs are carried out.

Everything needs to be declared to the lender and your solicitor to be happy that this has been done above board. Some lenders are happy with this arrangement, others won't accept vendor deposits.

moneysavinmonkey

silvercar wrote: »

So you want price 98k, vendor gifted deposit 5k. You then get a 95% mortgage of £93,100, pocketting £100 and the vendor gets their money. All perfectly legal if declared openly.

the OP can't get 95% mortgage on valuation of £98k as the lender has valued it at £93


You get 95% mortgage on £93100 = £88,445
you pay additional 5k cash
vender gives you 3k to do repairs


Sounds fine, my sister did something similar as the roof in her house needed replacing so they agreed to split the cost with the vendors.

All fine, but make sure declared to solicitors + lenders etc.


OP probably doesn't want to hear it but 95% mortgage is not the best move in the current climate. I don't know your personal circumstances of course so feel free to ignore me.

.

badm88n

1sttimer2008 wrote: »

some movement in past has caused crack that needs doing asap

Personally I would not proceed any further without first getting a professional opinion on the movement that has already taken place. If the house is still moving or likely to move in the future it could turn out to be VERY expensive for you.

You may have problems insuring the property as you will have to declare the movement that has taken place and what if anything has been doe to rectify it.

I'm playing devils advocate but this is a major point you cannot ignore.

1sttimer2008

I'm so confused where did £98k come from? I don't think I've explained it very well, our mortgage is for £88k so we're were paying a 5.5% deposit £5k (broker rounded figure off as it was easier that 88350 and 4650) making it £93 all in and the vendor has been left the property after a bereavement so there is no mortgage on there side. Now we want to split the dep so wouldn't it just easy for the vendor to appear to be paying himself? Oh this is turning so confusing I'm completely lost and scared to ring solicitor just in case I say something wrong and spoil it. I'm off to ring broker and get some advice. Thanks for the advice

Microstar_2

I don't know your area, obviously, but this house would have to be one helluva bargain for me to buy it. Do you really want to deal with possible movement and damp issues? These are difficult at the best of times, never really go away, and there will be issues with insuring and future sale. I wouldn't buy it.

Jumping_Bean

Microstar wrote: »

I don't know your area, obviously, but this house would have to be one helluva bargain for me to buy it. Do you really want to deal with possible movement and damp issues? These are difficult at the best of times, never really go away, and there will be issues with insuring and future sale. I wouldn't buy it.

All of that on top of the fact that house prices are dropping rapidly. I wouldn't but it
if I was you either. This little hick up may actually save you a LOT of money in the long run.