Who to trust?

avisccs

Hi I'm a first time buyer and have very few people helping me on buying a house. I think I have 'stupid' written all over my face, I feel people keep lying to me and I don't know which is lies or the truth. So, please help me to find out.

1. My mortage advicer (not independent) said because I'm getting a mortgage I have to use the surveyor that the lender askes. Is it true? They are charging double the price!
2. I put an offer on a house and I did 2 surveys on it, 1 basic survey and a Homebuyer survey. The basic survey is with the surveyor that the lendor askes for and the home buyer survery was done by an independent surveyor. Home buyer survery comes back with roofs, eletrics and gas problems. Basic survey found out nothing. The difference on the valuation between them are 5,000 pounds. Are the both report reliable? I heard of the term 'overvalue for mortgage purpose'. Would this happen here?
3. I have failed to negotiate for a lower price and the owner doesn't want to pay for the repire and tests. I have already told the agent that I'm giving up on it. Is it a wise decision?
4. I'm interested in another house and I asked the independent surveyor to give me an estimate of that house, just according to what I told him. He comes back with a price which is a lot less than the price I offered. I feel I got rip off again. What should I do?
5. Is there any way to avoid the mistake I made on the first house? I paid near 1000 pounds for nothing.

Thank you very much in advance.

Hailstorm

Hi and welcome.

I will try and help with some questions.

1) For the valuation yes, this is for the lender's benefit, not yours. On some mortgages they will still charge you for the valuation on others the lender will pay it. For a homebuyers or full structural survey you are free to go with the lender's surveyor or choose your own. I am a bit suprised the lender's surveyor is a lot more expensive. For me they turned out to be considerably cheaper as the same surveyor did my survey and the lender's valuation in one visit to the property.

2) A basic survey won't uncover the issues your homebuyers report found. All a basic survey does is value the property and point out any very obvious issues. It wouldn't have involved a close look at the roof, electrics or gas so would not have noted those issues.

The difference in value is down to different surveyor's opinion. There are no hard and fast rules for valuing a property, it is subjective. I have never heard of the term overvalue for mortgage purposes.

3) This is just down to how you and the vendors want to play it. You are perfectly entitled to try and renegotiate the price after the survey. The seller is equally entitled to refuse. Both of you are also equally entitled to walk away if you do not get what you want. It all comes down to how much you and your sellers want to buy or sell the property.

4) Again the valuation is just down to opinion but if there is a big difference then it might be the sellers are asking too much. It is quite common at the moment for people to think their property is still worth 2007 peak prices. There is nothing to stop you making an offer that is a lot less then the asking price though.

5) It is a bit of a catch 22 as there is no way of knowing the survey will raise problems until you have the survey done.

A few points to consider regarding surveys. They will always list a number of potential issues because you have comeback to claim against the surveyor if they miss anything that turns out to be a problem. They therefore list a lot of things as potential problems just to cover their own rear end. Trying to decipher what is a real problem from covering their proverbial seems like a black art.

I notice you say you haven't got anyone to ask for advice. Has your solicitor seen a copy of the survey? Ask them if there is anything that concerns them. You could also post the issues raised in your survey here and someone might be able to advise you if it is something you should be worried about or not.

avisccs

About point 4) my offer has already been accepted before I found out the estimate price is a lot lower. Can I walk out and start all over again? Or should I have the survey done on it before I negotiate further? I never know whether or not they would lower the price then. Any other suggestion?

About point 1) the surveyor of the lender are charging 450 pounds for a home buyer report, but the independent surveyor only charge 270 pounds.

Hailstorm

On point 4 it all comes down to the negotiation game, you can reduce your offer if you want. Don't expect your seller to be happy about it though. Have your had your lender's valuation for the property yet?

Your lender's valuation has further implications then one you have done off your own back. The amont the lender is prepared to let you borrow is dependent on their valuation, not the price you have offered. For example, say you are buying a property for £200,000 and the lender is prepared to lend up to 90% of the property's value. If the valuation comes saying the property is only worth £180,000 the lender will only lend up to £162,000, not the £180,000 you were expecting. For the sale to go ahead you would then either have to find another £18,000 yourself or renegotiate the price.

If one mortgage lender gives a lower valuation then the chances are others will also. The seller should then realise that if they do not drop the price it is likely to be difficult for them to sell so they should be more open to negotiation.

tek-monkey

In order of preference, I'd believe:

1) Your solicitor
You pay them, they get paid regardless, they don't get any commission or kickbacks (unless you've gone with an 'EA recommended' one that is!). They work for you, unless you've chosen an idiot their best interests are your best interests.

2) The lender
They don't care about anything other than lending you money they can't get back. They have nothing else to gain, they want to lend you the money but only if the property is worth it.

3) The surveyor
Again, nothing to gain whether you buy the property or not. They get paid, their report doesn't usually grant any further monetary gain for them. Therefore they tend to be honest, although I hear some dodgy ones will try to suggest work and people they know to do it.

4) Their solicitor
They do not have your interests at heart, but can't really lie as such because it has repercussions. Your solicitor should deal with them anyway, you never should.

5) The EA
They want you to buy the house, at all costs. Their salary depends on it, expect them to react as such.

I can't put the vendor anywhere really, they obviously still have their own interests at heart but some will play fair all the way while others will pick the peanuts from your poo given half the chance. Easier to maintain your distance and let the solicitor do their job. Although I'm actually in contact with mine, as its speeding things up. Any decisions we reach go to my solicitor to verify legally though, and then to theirs to get it agreed properly.

This is just my feelings, I'm a FTB who is feeling a little lost in the whole process. I'm also over a grand down at present, and there may be more to come.

FraudBuster

I feel people keep lying to me and I don't know which is lies or the truth.

"Gut" feelings are usually correct.

avisccs

Thank you all for your advice.

I start thinking the question what my solicitor can do for me. I thought she is just a person who deals with the paper work. I took your advice asking my solicitor what she thinks about the results of the 2 survey reports and she told me to ask the surveyor. Am I asking the wrong question?

O, btw, the urgent repairs are:
1. The built up felt flat roof over the porch and garage has failed and is leaking ...
2. Have a qualified electrician carry out a full test of the electrical system to appraise you as to the likely cost liability of upgrading the wiring to ....
3. Have gas appliances serviced if .....

I feel these are reasonable requests for the vendor to at least sort the roof out and carry out the tests. As I said before, EA said vendor is not willing to negotiate and I have told them that I am not going to buy this house. I wonder if the EA is testing me. Would they come back to me with a lower price? I somehow think my mortage advicor, who works in the same office, told them that I can afford 5k more.

Another question, is it wise to ask the EA whether or not the vendor of the second house is likely to accept lowering the price if the survey report results turn out bad. I really don't like to pay more than what it worths and I would not want to pay 1000 pounds every time to find this out.

Bufger

Your best bet in that case is to do your homework on the housing you're looking at. You should have seen the flat roof and immediately thought of leaks. Its something that should spring to mind straight away. To check i would have waited until the viewing of upstairs has started and then looked out of the bedroom window to see the state of the cladding.

If the property has bay windows and a sofa is convieniently placed infront of it then check behind that as this is a common place to find damp. I always check the boiler too as thats a big bit of work but its hard to check the electrics short of going round and turning everything on/off.

Your solicitor is right. She cant comment on the results of a survey because thats not her special area. She may well agree that the work needs to be done. Its a decision you need to make now. Are you willing to walk away if no comprimise can be made or are you willing to pay the difference out of any savings or current money you have.

Its not wise to ask an EA (before even making an offer) if a vendor is willing to reduce the price if.... Basically it looks like the EA knows everything about you. You have used their broker who has likely given you a terrible mortgage deal. You have shown them all of your cards and they know exactly how to play the game to beat you.

If i were you i would walk away. Do some research into common problems with housing. Research the areas you like in your city/town. Research good mortgage deals direct with banks and NOT through brokers. Fill out a statement of affairs to make sure you can afford to live once you have bought a house.

You need to be prepared for all of this or you risk losing your house. That wont be fun so its worth doing the work up front :-)

avisccs

Thank you Bufger. It's a useful and constructive piece. It has told me what I've done wrong and I can improve from that.

I have 1 more question:
If I have a mortgage directly through a bank, is the EA sent the survey report automatically? Do they have right to see the survey report?

PasturesNew

avisccs wrote: »

I have 1 more question:
If I have a mortgage directly through a bank, is the EA sent the survey report automatically? Do they have right to see the survey report?

No, that is yours and private to you. They will not see it unless you give them a copy... which isn't something most people do. They might ask, but you don't have to give it to them, or you can just photocopy a paragraph or two if they are asking because of one item that comes up.

You paid for it, it's yours. Private. Remember, they work for "the other side" and giving them sight of it might work against you. There's being reasonable/professional ... and there's showing your hand.

avisccs

PasturesNew wrote: »

You paid for it, it's yours. Private. Remember, they work for "the other side" and giving them sight of it might work against you. There's being reasonable/professional ... and there's showing your hand.

But my mortgage advicer gave a copy to them without my permission. :mad: