Money retained from our mortgage application

nat010904

We are currently going through the process of buying our first house. We have made an offer, been accepted, applied and got the mortgage offer, sorted direct debits for mortgage etc. appointed solicitors and the valuation has been done.
We are now stuck.....the valuation has now said that the house is worth £5,000 less than what we have had an offer accepted at.
The bank have said they will retain the £5,000 until the work has been done (which they have stated on the valuation)

What do we do next?? And how can it be solved?

Thanks in advance

newbutold

Given the valuation, I think you are in a good position to revise your offer.

What work needs doing and were you aware of this at the time of your original offer?

nat010904

The things that the valuation picked up on was things that we were going to have done and checked.
I have been In touch with the estate agents to speak to the vendor about the problem and if they can move on the price.
Don't know how that's going to go...
And what do we do if they don't?

cattie

nat010904 wrote: »

Don't know how that's going to go...
And what do we do if they don't?

Well if they don't agree to drop the price then you have to look for another house. Unless of course family would stump up the £5k shortfall, but in this day and age you'd be pretty silly to pay more for a house than what the valuer has said he feels it is worth.

Dave_Ham

If they do not want to price drop, ask them to do the work and then pay your revaluation fee and have the valuer have another look.

I suspect the answer will be somewhere between the valuation and the previously agreed purchase price.

Conrad

Usualy sellers and buyers seek to find a middle ground. Simply expecting the seller to take a hit is one sided. If that seller made a thread on here now, people would be advising them that the buyer should pay. Forums often engender this sort of wierd bias.

harvey115

Conrad wrote: »

Usualy sellers and buyers seek to find a middle ground. Simply expecting the seller to take a hit is one sided. If that seller made a thread on here now, people would be advising them that the buyer should pay. Forums often engender this sort of wierd bias.

Completely agree with Conrad.

In real life people would expect both parties to meet half way to cover the costs. Although buyer has an upper hand in this process most of the times due to the current financial climate, the seller may also have other obligations to complete with the sale.

The_J

To be fair, if it was known about before making an offer there is an argument that no price reduction should happen.

What's your LTV ratio looking like? Can you still purchase the property?

betmunch

nat010904 wrote: »

We are currently going through the process of buying our first house. We have made an offer, been accepted, applied and got the mortgage offer, sorted direct debits for mortgage etc. appointed solicitors and the valuation has been done.
We are now stuck.....the valuation has now said that the house is worth £5,000 less than what we have had an offer accepted at.
The bank have said they will retain the £5,000 until the work has been done (which they have stated on the valuation)

What do we do next?? And how can it be solved?

Thanks in advance

Wait a minute, are we talking about the valuation being £5k less, or the valuation being correct, but theres a £5k retention on it?

You need to clarify this really.

Dave_Ham

betmunch wrote: »

Wait a minute, are we talking about the valuation being £5k less, or the valuation being correct, but theres a £5k retention on it?

You need to clarify this really.

Good question, I assumed a retention...

betmunch

Dave_Ham wrote: »

Good question, I assumed a retention...

Really? I think its a retention too but I wouldnt drop my price for a retention because that valuation would say the house is worth the purchase price, but it needs a bit of work before the lender releases all the funding.

My thinking assumes the buyers know they are buying something that needs fixing up of course.

Think we also need to know if the retention is due to something the buyer knew about or not really.