Report & Valuation for Mortgage Purposes

BaysideBlue

Hi all,

Been an avid reader for many years, many tips used, would not normally ask for any advice but have run out of ideas!

The situation is as follows:

Sold house (after 18 months), offered on another property on market at £119,950 offered £115,000 accepted. Have £52k deposit, need to borrow £63k. Had survey done, valuation of £115k in present condition (1930s 3 bed semi, general wear & tear)

He has listed 9 items as being ESSENTIAL repairs:

Treatment of damp and timber defects (none)
Upgrade plumbing (old lead pipes - no leaks)
Polystyrene ceiling tiles (small bedroom - potential not ESSENTIAL)
Roof coverings (original tiles none moved no holes)
Brickwork/Stacks (repointing ?)
Seals to Double Glazing (?)

Estimate £12k

They will not advance any of the 63k until the work is done, yet on the bottom of the survey it states that valuation with work complete will be £117k? and buildings insurance £131k.

To cap it all in the recommendation box it says "taking into account all the above do you believe the property to be a suitable mortgage risk. he's put YES!!

From my point of thinking, if they lend us all the money (63k) we then move in, don't get anything done, house gets repossessed in lets say 6 months goes on the market at £115k sells for £103k (less 12k repairs?) they get back their £63k pluas an extra £40k.

Can somebody please enlighten me on where to go with this?

Apologies for the length, first post.

Cannon_Fodder

Negotiate. Talk to the vendor. See what reduction you can get. See what work can be carried out by them in advance. They will hit the same problem with other potential buyers, so its in their interests to tackle the issues.

Of course its a suitable mortgage risk, in principle, it just needs some work beforehand. If he said NO, you'd be complaining that they would never lend the money.

£117k less £12k repairs, £103k, is best case scenario. They perhaps anticipate further price drops in the market over the winter. And they don't set out assuming its going to be a repo. It takes months, and the Govt require all sorts of hoops to be jumped through, at the moment.

Of course, it could just be the lender being picky as they have run out of funds and are looking for easy ways to avoid lending.

G_M

Seems very strange. So thgere is no damp, the plumbing works, there are some old-fashioned (cosmetic) tiles that may be to your taste or may not, the roof tiles are fine. Correct?

And there is no statement as to the condition of the brickwork and double glazing. ("?"). Correct?

So I don't understand what work they want done. And on top of that the surveyor says the property is a suitable risk.

I would go back to the mortgage company to seek clarification.

BaysideBlue

The property has the orginal cast iron downpipes/guttering. The house it joins to has new upvc soffits, facias, bargeboards, gutters, downpipes which makes this property look tired.

Strangely i'm not interested in haggling the price, like the house, want to move in, minimum fuss (property is vacant vendor lives 100 milles away), could understand if surveyor said house leaning on next door (across 8ft drive!, but it isnt.

Believe the surveyor is being overly fussy.

jhe

hi. we had 2 valuations completed on the same property. both came back entirely different. different possible problems and different value of the house!

Thrugelmir

Polystyrene ceiling tiles

A fire risk so should be removed and replaced.

More to the point what are they covering up?

Thrugelmir

BaysideBlue wrote: »

The property has the orginal cast iron downpipes/guttering.

Are you sure that they are cast iron. A lot of 1930's houses have an asbestos/concrete mix for guttering and pipes. So require specialist disposal.

natman

Hi,

Your situation is annoying.
Unfortunatley this is the stress of buying houses - I hate it.

Several years ago we had valuation etc.
The house was at 145k, We wanted to borrow 39k, yeah we were lucky to have 106k deposit
The valuation came in at 144k due to some pointing that needed doing. I was happy with this and would get it done, but.......................... The mortgage company said hey would only lend 38k and not the 39k i needed. I had no spare money to cover this and the house fell through!!! What a joke.
The mortgage company was Britannia Building society, they are real sticklers for things being spot on nearly perfect!!!

Your situation sounds similar, but also a bit more serious. you mention that they wont advance any money you want??? That is a pain.

I see two options -
Discuss this with Mortgage company and see if they can see a solution.
Discuss with estate agent / seller mention that you cant get a mortgage on the house due to the things picked up in the survey.....

It really maddens me, even more so these days that a massive chunk of UK houses have some issues from a bit of pointing, to guttering to much more serious jobs.
Mortgage companies do lend for renovation projects, so maybe a different lender may be an option who is happy with the valuation to lend you 63k of a house thats worth 115k. Who were you trying to get a mortgae with?

BaysideBlue

Hi Natman,

Mortgage was with Lloyds (C&G), have mortgage advisor trying to sort. Even though the property is empty and believe the funds are not being used for vendors next purchase cannot see them acccepting a revised offer £12k below or even half that amount or getting the work done themselves. We have no funds to sort the defects? apart from having a third party loan.

Whats more annoying, and i accept times have changed, when we bought present house, all monies were forwarded on condition of the following work being done and checked.

New living room floor - packed up bearer wall myself
Re-wire - completed before we moved in
Lintel above front door - done 4 months ago!

Have lived here since '95 and never had a visit.

Fire_Fox

BaysideBlue wrote: »

He has listed 9 items as being ESSENTIAL repairs:

Treatment of damp and timber defects (none)
Upgrade plumbing (old lead pipes - no leaks)
Polystyrene ceiling tiles (small bedroom - potential not ESSENTIAL)
Roof coverings (original tiles none moved no holes)
Brickwork/Stacks (repointing ?)
Seals to Double Glazing (?)

Estimate £12k

They will not advance any of the 63k until the work is done, yet on the bottom of the survey it states that valuation with work complete will be £117k? and buildings insurance £131k.

To cap it all in the recommendation box it says "taking into account all the above do you believe the property to be a suitable mortgage risk. he's put YES!!

What level of survey did you have carried out - mortgage valuation, Homebuyers Report or full structural? Are the brackets after the essential works your personal opinion of the work required, a builder's assessment or the surveyor's comments?

If the bank are not willing to advance any of the £63K then have they said they consider the property unmortgageable? Or are you reading it wrong and they won't advance any of the £12K needed to sort out the house, i.e. a retention?

BaysideBlue

Hi Firefox,

The comments in brackets are my definition of his report, a mortgage valuation by the way. He said there has been historical movement but nothing recent and said a full structual survey would not be required.

My EA said C&G and HSBC were the 2 lenders who are the most problematic in releasing funds. They have said there is no retention of any kind, they will not lend £63k until the work is done. I personally feel like letting the house go but don't want the sale on mine to fall through (reduced by 25% over 18 months) and their is nothing else on the market in our price range that fits our criteria. Our current house was in worse condition structually/cosmetically when bought 14 years ago and never had anything like this.