Vendor Retention Mortgage Question

riverman1

Hi
New here so please bare with me !!

I have a 3 bed semi for sale that needs a total refurbishment, I have agreed in principal an offer subject to valuation. I was told from the EA that it would be a swift sale, and that the buyer was able to raise equity on his own property!! However after the valuer had been to inspect my property, the buyer all of a sudden needed a retention mortgage.

After 8 weeks gone buy I have recieved a letter from my solicitor saying that the buyer needs a retention mortgage and they have proposed to pay, 10% of agreed price as a deposit then after works have been carried out + inspected the lender will release the remaining 90%

Question 1
The length of time given in proposal for works to be carried out was 6 months which seems a long time to me, ok the property needs double glazing, re-wire, kitchen and bathroom? Does 6 mth seem excessive??

Question 2
The property was only on the market for a week in January when I accepted the offer, but no signatures have been made. Should I re-market the property or wait six months for retention mortgage to be paid?


Regards


Riverman1

DVardysShadow

Depends on the state of the place. But I would want at least the value of the building plot up front and a drop dead date for the balance to be paid, after which the property would revert to me. Unlikely to get takers.

Otherwise put it back on the market

Richard_Webster

If it needed that amount of work then it would have been priced for cash buyers and those who could raise money on other property. The buyer said he could raise money that way and that is not what he is doing. I would remarket.

bingibongi

And if the lender inspects the works and is not happy with them - what happens then ?

riverman1

bingibongi wrote: »

And if the lender inspects the works and is not happy with them - what happens then ?

Good Question
Not to sure what would happen if the lender was not satisfied with works that had been carried out?
I guess there needs to be some clauses in the contract prior to work commencing.

Any suggestions welcome

bingibongi

My suggestion is - don't do it - conditional contracts are a disaster waiting to happen. Clauses have to be drafted very very carefully and usually aren't - when it all goes wrong it can be hugely expensive and time consuming to sort out.

G_M

Find a buyer who will buy it as it is. Price it appropriately.