Retainment/retention on mortgage

B52

We are in the process of purchasing a house.

The survey valued the property 3K less than our agreed price unless we have the following things checked and done:
1) Electrics to be checked
2) Damp and Timber report
3) Replaced a few bricks on the side wall of the house

Under this situation, is it advisable to purchase the house and pay the difference of 3K to the vendor separate. Then do the job needed and get the 3K mortgage from the lender afterwards? (Money will be tight if we do this.)

Or is there any way we can do some work on the house before we purchase so we can get the mortgage we originally asked for? (It seems silly as we are paying towards a house which legally speaking does not belong to us.) The house is vacant at the moment.

The agreed price is 83% of the asking price and we were told the seller is not prepared to drop the price.

Thanks for your advice.

Barney088

Valuers are funny people, (no offence) but the figure of £3000 will be based on worst case scenario, if you have just had a mortgage valuation done then they will be covering their back, in case there is a problem.

THe reports you require can be commissioned for nothing, or for a small cost if you ask around. THey will need to be qualified as per the mortgage offer for them to count. On occasions the work is not needed, just a very cautiious valuer. Other times the work will need to be done and the quote you get will be £1000. The valuer and lender may decide to take a different route.

On more rare occaisions the work may be more than the £3000 set aside, in this case you count your blessings you didn't buy it!

With regard to what to do, I would get the reports and take stock. They will decide your route. It is typical for a lender to retain some money if there is work needed to be done, but also equally common for them to tell you to do the work within 6 months.

See what the reports bring I guess.


Good luck

B52

Thanks very much for your advice.

We were like riding on roller coaster yesterday and in the end the vendor offered 1k in our pocket on the day of completion.

Our mortgage advisor found out that the house we want to buy was with another EA before. It was Sold subject to contract but the sale fell through because of the similar reason: The surveyor valued it at less than their agreed price and also has a retainment (4k). The buyer renegotiated but vendor hesitated. When vendor changed their mind, the buyer has already found another house.

Our mortgage advisor told us we definately have to renegotiate as both surveys come back at the same value(!) but with a retainment for work to be done, if we pay the agreed price that means we are paying for more than it worths.

So in the end the vendor offered 1K on the day of completion and we accepted his proposal.

What a day!