House purchasing allowance- any info?

Gillardo

We are in the process of buying a house but the survery has thrown up some urgent work that needs completing on the house including damp proofing and rewiring. We have to get these done but cannot afford to do them as it will cost around £5,000. We considered renogiating but this will only reduce our deposit by around £750 so will not help a great deal.

We are thinking of suggesting to the vendor that they pay us the money back on completion so in effect reducing the price of the house but meaning we can complete the work straight away.

Has anyone come across this type of arrangement before and how exactly would it work ref: contracts and mortages?

tek-monkey

Would the vendor even do that? Is the rewiring needed or recommended? Surveyors advise a lot, and much of it is not needed. Yes you may want a nicely rewired house, but that doesn't mean the vendor must make it so.

Of course if its actually dangerous wiring ignore me!

Gillardo

I was equally wary regarding the survey but got two external experts to look at it who recommened that the work needs doing. The vendors have lived there for 30 years and have not updated it in this period.

BitterAndTwisted

If you can't get the purchase-price reduced by the value of the damp-proofing cost I wouldn't buy. Seeking to reclaim the expense from the vendor after the fact doesn't make any sense to me. You've got to get them to agree to it and then find them later to get them to cough up. What happens if you can't find them or they've moved abroad? Not sensible

bryanb

Essentially you buy a house "As seen" Although it's nice if you can twist the seller's arm to do some work for you.

Gillardo

The allowance payment would obviously go through the solictors and would be done on the exchange or completion date.

I agree you buy a house "as seen" but you cant see if their is any damp or the wiring is not up to scratch and when you do find out do you think it is fair to then reevaluate the value of the property with the new findings?

Richard_Webster

If the contract provides for a refund by the seller on completion then that is an incentive that has to be reported by your solicitor to your mortgage lender and is likely to result in a revised (lower) mortgage offer being made because the effective price of the property has been reduced.

If you get the seller to do the necessary work (and pay for it) between exchange and completion then you can pay the full price on completion and this should not alter the LTV ratio of your mortgage.

Gillardo

Richard thanks very much for the advice it sounds like getting the vendor to do the work is the best option.

p00hsticks

Gillardo wrote: »

The vendors have lived there for 30 years and have not updated it in this period.

So the property is likely to have been priced with that in mind. By all means show your vendors the survey and ask them if they'll help you in some way (by getting the work done themselves or by dropping the price) but don't be surprised if they come back saying that the fact that the property is 'in need of modernisation' determined the asking price in the first place.

Gillardo

pOOhsticks I think you have a good point and I have been scouring net house prices looking at selling prices this year. Hopefully we can come to some form of agreement.