Urgent advice required - FTB

Homersimpson

Hi,

I put an offer in on a house that needs total refurbishement (including roof which is not leaking but has seen better days). I knew that the property would require the usual such as rewiring, new heating, double glazing etc. and offered a price 12.5% less than the asking price which the vendor accepted straight away.

I'm a FTB but am very practical and have done similar jobs on my parents house, new kitchen, bathroom, wiring, plumbing etc. I work in the constuction industry and know how much work goes into these things but thought that the price I offered was reasonable.

I've had a homebuyers report done which has raised a whole load more problems such as render bridging the damp proof course, possible problems with suspended timber floors etc. The surveyor said in the report that the house is at the upper end of its valuation. I rang him up and had a good long chat with him, he was of the opinion that the correct price for the property in its current state is 25% less than the original price which is a further 12.5% from what I have offered.

I don't want to upset the vendor or have them think that i'm a timewaster but the survey is damning and I can't afford to proceed at the current price with the work that I now know needs doing.

I've arranged to have another look at it tommorrow and really could use some advice on what to do and how to approach the agents. I guess the bottom line is that if they don't reduce the price I can't afford to buy it. The only reason I can get a mortage is that my deposit is sufficently large to enable the bank to reposess, sell it and pay off their costs so the fact that its not worth my offer does not bother them, my deposit is 28% of the value of the house and I have taken 10 long years to save up for this so obviously don't want to squander my money.

Do I tell them that I intend to pull out of is that too hardline or do I ask them to speak with the vendor to consider a reduction?

The vendor inherited the house and i'm a FTB with a morgage offer and we can both proceed, he's had a couple of offers fall through already (one from a builder according to a neighbour and the other from a private individual whose chain collapsed).

I feel bad about this but theres no point in me buying it and doing all that work and spending more on it than its worth (i'm not taking into account future house price falls or rises as this is unpredicable and I will be in the same boat whatever I buy.

Any advice would be greatly appreciated from buyers and sellers - how would you feel if you were the vendor?

lincroft1710

You see a car for sale by a genuine private vendor at £6K, it needs work and you agree £5K subject to AA/RAC inspection. Inspector's report comes back, says even more work needs doing, car only worth £4K in current condition. Are you still going to buy car for £5K?

No, of course you're not. It's the same with a house, you have a professional's opinion of value plus evidence to support this. Negotiate downwards or walk away. If you buy at currently agreed price and something untoward happens in near future and you need to sell, you've lost a whole load of money.

Homersimpson

Thanks lincroft1710, I guess I know that I can't pay the previously agreed price. Any opinions on what the vendor is likely to say?

lincroft1710

If the vendor is firng on all cylinders they should realise that any other prospective buyer's survey will say more or less the same - price needs to come down even more!

Having said this, I would be surprised if the vendor agrees to a price reduction straight away. Therefore go back to EA, explain situation - survey says more work needed and you need price reduced to £x or no sale and will he explain this to the vendor. If he instantly says "Oh, I don't think they'll accept £x", you politely reply "That is my offer, no doubt you will communicate it to them. I await to hear back from you". Listen to anything he says further but be totally non commital and stand your ground. If the EA is any good at his job, he'll realise this could be a problem house to sell except at a very, very cheap price and will hopefully advise his client that under the circumstances your offer is fair.

Then be patient and just wait.

Homersimpson

As i've now had the mortgage offer will I still have to pay the mortgage fee even if the sale falls through?

princeofpounds

Don't even begin to feel emotional about this. Tell them the survey came back with far more faults than you had originally suspected. Tell them the price you are willing to accept and see if they can do the deal.

The EAs often try to waste time and confuse the issue by asking for copies of the survey to discuss or whatever. Don't get into this, just tell them the big problems, let them have sight of it if you are there in person, and that it will cost x more than you had anticipated to fix them. End of story.

There is either a deal or not. You are not a timewaster for negotiating after a survey result, it's very common and one reason you get a survey.

Homersimpson

I have spoken to the bank and they have confirmed that I would incur the mortgage fee of £999 which is a bit of a pain but hey its better than loosing 15k by buying a house thats not worth the money I surpose!

Cannon_Fodder

Use the survey to negotiate the price down, you might get the deal you want.

bmunky7

The promptness of the vendors acceptance of your original offer suggests he thought your offer was a great deal and could well be open to offers. Don't worry about what the EA or vendor say or think, you got the survey for a reason, now let it work to your advantage. Good luck.

laughingcow81

The mortgage fee shouldn't be a waste, as you should be able to use it towards another property?

Homersimpson

Your right, i've checked again with the bank and they have said that as long as I have the same deal then I don't need to pay the application fee again, just the survey costs which sounds fair to me!