Indemnity Policy, Unadopted Road

horny_kez

Thanks for your replies, I think I did get the two mixed up slightly, my solicitor listed both on the same letter which I think lost me a little.
She has written to the valuer to make sure that the fact the road is not yet adopted will not reduce the value & we are awaiting their reply.
With regard to the insolvency act, I don't see why this is relevant? The house was on the market for £105000, we offered £100000 with 5% vendor gifted deposit so our mortgage will be for the remaining £95000. The valuation we had valued the house at £100000 which is exactly what we had offered and had accepted so surely it's not being sold for less than the market value is it?

MX5huggy

With those figures I would count my blessing the solicitor was slow and had found a reason not to proceed! Tell the vedor that you will only proceed if they drop the price by 20k and provide the insurance your solicitor recomends.

horny_kez

One Hundred Thousand is cheap in this day & age, why would they reduce it by 20%??

Richard_Webster

£100000 with 5% vendor gifted deposit so our mortgage will be for the remaining £95000. The valuation we had valued the house at £100000 which is exactly what we had offered and had accepted so surely it's not being sold for less than the market value is it?

I would say that the market value is £95K because that is what you are actually paying.
No seller would do this "gifted deposit" stuff if he could sell it for £100K without a gifted deposit - so property actually worth £95K in my book.

However, taken literally your solicitor is saying as property is allegedly worth £100K seller is "giving" you £5K therefore if he goes bankrupt, his creditors might say that he was defrauding them to that extent. I don't see the logic there, because it could quite reasonably be said that to sell it in the open market he had to offer this inducement - he wasn't doing you special favours because you were his big mate or anything like that etc.

gauly

I thought mortgage companies now take the value of the house to be either the value from the valuation (£100K) or the price paid (£95K) whichever is the lowest. So £95K in your case. That would mean that you will need a 100% mortgage to get the house? Do they even exist any more?

horny_kez

It's a 95% mortgage, the valuation is £100k, the sale price is £100k (in theory).

Fire_Fox

horny_kez wrote: »

Thanks for your replies, I think I did get the two mixed up slightly, my solicitor listed both on the same letter which I think lost me a little.
She has written to the valuer to make sure that the fact the road is not yet adopted will not reduce the value & we are awaiting their reply.
With regard to the insolvency act, I don't see why this is relevant?

You don't see why it's relevant. Your solicitor clearly does, with his/ her qualifications and years of experience. You think you will override her. Are you mad?? Either sit down and get your solicitor to explain why this is necessary or just let them do their job. If anything goes wrong it could make your investment unsaleable in the future. If it's your solicitor's fault you can take them to court. If you have overridden their professional judgement you will have done yourself up the proverbial.

horny_kez

I understand why they are used but I'm not buying for less than the market value. I am nowhere near as qualified as a solicitor to know what is best but the solicitor is also running a business and might just be trying to get even more money out of me :rolleyes:

silvercar

Richard Webster's explaination makes sense. Your solicitor is just covering you in case the seller goes bankrupt and the official receiver thinks he should have been giving the £5,000 to his creditors not to you.