Unsure what to do next - mortgage arranged, but structural survey issue

bukowski

Hi everyone,

we're first time buyers. The whole process has been going fairly smoothly up until the valuation report for the property we're buying flagged up a requirement for a structural survey.

Our mortgage company want to see a copy of the full survey, which suggests there's about £6k work that needs doing to the property, basically underpinning a bay window + some other work.

We're buying the property for £116k with a £30k deposit in place.

I'm worried that our mortgage company are now going to turn around and refuse to lend us the full amount - the property is at 'market rate' according to the valuation report once the property is 'made good'.

What do we do? Do we just see what the mortgage company says? Do we get our solicitors to try to negotiate a reduction in price? Do we get the vendor to make good the property before we go ahead? Do we pull out?

The latter option is not preferred, we're on a tight budget and the survey and moving costs etc. will soak up our cash reserves. We have no way to pay an extra 5k if the mortgage company requires it, without reducing our deposit. We could easily make the place good once moved in.

We're both really confused - any help would be appreciated!

G_M

Our mortgage company want to see a copy of the full survey,

By this I assume you mean the structural survey?

Well if they want to see it you'll have to show them! Yes, they may either reduce what they'll lend or withold an amount pending works.

Do we get our solicitors to try to negotiate a reduction in price? Do we get the vendor to make good the property before we go ahead? Do we pull out?

You can do any or all of these, or you can take the financial hit.

Start by trying to put the cost onto the vendors (price reduction or making good) and if they refuse, then you'll have to decide how much you want the property.
Was an Estate Agent involved? You could use them to negotiate price though bear in mind they work for the vendor not you, so don't tell them your final fall-back position - just tell them you need (£X knocked off/vendors to repair xyz).

bukowski

G_M wrote: »

By this I assume you mean the structural survey?

Well if they want to see it you'll have to show them! Yes, they may either reduce what they'll lend or withold an amount pending works.

You can do any or all of these, or you can take the financial hit.

Start by trying to put the cost onto the vendors (price reduction or making good) and if they refuse, then you'll have to decide how much you want the property.
Was an Estate Agent involved? You could use them to negotiate price though bear in mind they work for the vendor not you, so don't tell them your final fall-back position - just tell them you need (£X knocked off/vendors to repair xyz).

Thanks G_M - I think I just needed someone else to voice what I thought the situation was. Best crack on with sending the mortgage company the structural survey and see what they say..

Horizon81

If you can't afford the 6K to fix the problem then you'll need to either get the seller to put it right, or get 6K off the price. Unless the work gets done I suspect the lender won't lend you the money.

There are however other factors to consider. You must notify the home insurance company of this underpinning as (although you don't say it) there appears to have been movement/subsidence to the house. This will immediately limit the number of insurers willing to take on the risk. You should eventually find somewhere willing to take on the risk but it will probably come at a price. Then there's the problem of reselling - it may well deter future buyers that the house has suffered historic movement, for fear of it recurring plus the problems in getting insurance.

Personally, i'd have walked away as soon as the valuation for mortgage purposes flagged up the need for a structural survey. It was never going to be good news after that!

clutton_2

i would ask a few other poroperties in the streeet if they have experienced any need for underpinning... if this is a coal mining area and other houses have had the same problems then it will not be as big an issue on re-sale as if you were the only property suffering this

if you are the only property suffering this - it probably means a cowboy builder has done the bay window..... and you will have trouble re-selling

what other works need doing ?

delmar39

Something similar happened to me when I was selling my first house. The buyers survey identified a fairly major problem with the roof, which was going to cost around £3k to put right. My buyer gave me two choices - accept a lower offer or do the work myself or they pull out. I stood my ground at first, but backed down in the end and accepted a lower offer as I really couldn't be bothered to take my roof off whilst living there and the next buyer's survey would have identified the same issue. So, if I were you I'd either ask them to do the work or take it off your original offer - they will have to sort it out either way with whoever they sell it too so why not with you?

If they do the work it'll obviously impact on timescales but can you really be bothered to get it done if you move in? Plus you've got insurance issues as mentioned above. Let us know what you decide.

chappers

Is the house in question by any chance a 30s-50s bay fronted property.
These properties are notorious for bay problems, basically a lot of them had the bays basically built on their own foundations(and not very good ones at that), rather than the foundations being built in as part of the main house's foundations.
As Clutton says is there a history of problems in the area or is there actual signs of subsidance, you may just find that a structural survey/report will state that there isn't any real problem.

bukowski

Horizon81 wrote: »

If you can't afford the 6K to fix the problem then you'll need to either get the seller to put it right, or get 6K off the price. Unless the work gets done I suspect the lender won't lend you the money.

There are however other factors to consider. You must notify the home insurance company of this underpinning as (although you don't say it) there appears to have been movement/subsidence to the house. This will immediately limit the number of insurers willing to take on the risk. You should eventually find somewhere willing to take on the risk but it will probably come at a price. Then there's the problem of reselling - it may well deter future buyers that the house has suffered historic movement, for fear of it recurring plus the problems in getting insurance.

Personally, i'd have walked away as soon as the valuation for mortgage purposes flagged up the need for a structural survey. It was never going to be good news after that!

As it transpires the bank won't lend us the full purchase price of the property anyway, even if we negotiate on price. This leaves us with the option of getting the vendor to do the work.

Thanks for the heads up on the insurance issue, the movement is due to the conversion work that has been done on the property.

I've been agonising for some time what to do about this, walking away is sounding more appealing every day.

bukowski

clutton wrote: »

i would ask a few other poroperties in the streeet if they have experienced any need for underpinning... if this is a coal mining area and other houses have had the same problems then it will not be as big an issue on re-sale as if you were the only property suffering this

if you are the only property suffering this - it probably means a cowboy builder has done the bay window..... and you will have trouble re-selling

what other works need doing ?

Although it is a mining area, the movement is due to the conversion work that has been done to turn it from 2 flats into 1 house. I've been out around the area looking at other similar conversions, and now I can see where the problems lie. No one else has taken this particular route. The bay window needs underpinning, and the stone lintels that were above the bay window (and doors) need to be replaced as I'm pretty sure they're in two pieces, and consequently only now supported in the middle with the UPVC frames.

We're buying the property to live in, with the expectation of staying there some time, I know I should think about resale, but I can only think about sale right now.

Thanks for the advice.

bukowski

delmar39 wrote: »

Something similar happened to me when I was selling my first house. The buyers survey identified a fairly major problem with the roof, which was going to cost around £3k to put right. My buyer gave me two choices - accept a lower offer or do the work myself or they pull out. I stood my ground at first, but backed down in the end and accepted a lower offer as I really couldn't be bothered to take my roof off whilst living there and the next buyer's survey would have identified the same issue. So, if I were you I'd either ask them to do the work or take it off your original offer - they will have to sort it out either way with whoever they sell it too so why not with you?

If they do the work it'll obviously impact on timescales but can you really be bothered to get it done if you move in? Plus you've got insurance issues as mentioned above. Let us know what you decide.

Very interesting to hear it from the vendors side - thanks. The lower offer is no good to us now because of the conditions the bank has placed on the mortgage. We're going to ask them to get the work done. If they refuse, we're going to pull out. Our second choice property is still on the market, and has been substantially reduced in price since we looked at it...

bukowski

chappers wrote: »

Is the house in question by any chance a 30s-50s bay fronted property.
These properties are notorious for bay problems, basically a lot of them had the bays basically built on their own foundations(and not very good ones at that), rather than the foundations being built in as part of the main house's foundations.
As Clutton says is there a history of problems in the area or is there actual signs of subsidance, you may just find that a structural survey/report will state that there isn't any real problem.

No it's an 1890's property, fairly common aound here. They come in a mix of styles. As I've mentioned (now I've come back to the thread!) the work is entirely related to the conversion. If the pillars had been left in the bay window when the double glazing had been done this wouldn't be an issue at all.

thanks