I need advise again please

redapple1

So we got aip (Halifax) back in aug. found a house, offer accepted, mortgage offer through, bad survey = we pulled out. Found another house. 4k more but about 45/50k below aip.
Offer accepted, survey done and its been down valued. And the valuer had given a list of reasons and work needed as long as your arm.
I spoke with Halifax yesterday about what happens next.
They said I need to wait for survey to arrive (not had our copy yet) get quotes for work and go back to vendor to discuss. I presume if they agree a new price I'd inform Halifax. The guy said the case needed to go to senior underwriters (I think he said b1 sign off but not 100%) sure.
So what is the process? The guy said there are a number of options the underwriters might take a-no offer b-retention (I think that's the word he used, sorry I was struggling to understand) c-we put more money in.
From what Halifax have told me the work doesn't sound like major structural. We still want the house. New roof. Parapet wall failure. Cavity wall tie failure. Boundary wall unstable. I think they're the major ones but need to see survey. Colliers panelled it out to countrywide who told me last night they have 7 working days to write report so might be another week before I get it.
Anyone have any experience of this?

kingstreet

You need to wait for the written report to arrive.

Once you get that, you then need to have each issue investigated by a relevant specialist, such as a structural engineer, independent timber & damp surveyor etc.

The estate agent may try to take this away from you, but you have to question the objectivity of someone getting work from EAs like this. Pay for reports, as the "free" ones normally end up with a higher bill for any work needed.

Once you know what's required, post back and you'll get further help. On receipt, the reports should be sent to the surveyor for a final decision to be made on the valuation now, the valuation after essential repairs and any retention.

The lender will normally work from the surveyor's figures in establishing how it wishes to proceed.

The question is, could you cope with a retention? This would mean the lender holding back a sum equivalent to the cost of the repairs until after they are done. This means you have to increase your deposit by that amount to allow the purchase to proceed, then once the repairs are done, you draw down the money they have held back, using that to pay for them.

If you don't have enough to do this, you should consider purchasing a property which is readily habitable. Doer-uppers are really for those subsequent purchasers with equity and savings which can meet such needs.

redapple1

Thank you very much for taking the time to reply. Much appreciated.

They have valued it in its current condition 5K under what we've offered. The Halfiax guy did say yesterday that the valuer has written it would be worth offer price with work completed. If the vendors lower the price by 5K (or even more depending on quotes) are the underqriters likely to be happy with that?
The parapet wall I believe is a flat roof extension wall - we were planning a large extension in 2 years (less depending on savings) so it would be knocked down and rebuilt then, so would seem a shame to have to rebuild it now.
If they put a retention on our mortgage we'd probably have to take a loan to cover costs of work - how would the bank respond to that? If it isnt too expensive family may help. Best scenario I guess is to have the vendors do some and maybe meet us half way on others, my fear is they wont and again we'll have to walk away. Really dont want to as we love the house and this is the 2nd time we've been in this situation (last time work was too much and vendors wouldn't budge).

kingstreet

redapple1 wrote: »

If the vendors lower the price by 5K (or even more depending on quotes) are the underwriters likely to be happy with that?

No. Essential repairs are exactly that.

A reduction in price will be met by an equivalent reduction in the amount you can borrow if you're up against a LTV barrier. Remember, it's always purchase price or valuation, whichever is the lower.

If they put a retention on our mortgage we'd probably have to take a loan to cover costs of work - how would the bank respond to that?

It would depend on the overall affordability of the case.

redapple1

I don't even know if they are saying they're all essential repairs. I think I need to call them again on Monday to clarify.

kingstreet

Only essential repairs are dealt with by retention. There may be other non-essential issues on the report, but a retention would not be used to deal with them.

They are normally dealt with by undertaking to rectify them within a short time after completion.

redapple1

Ok thank you.
Would the valuer have told the bank what they felt were essential repairs? Some of the thinks the guy from Halifax read out over the phone do not seem like urgent essential repairs - such as repair to boundary wall. _ the boundary is all fenced however there is a tiny small wall with a gate attached at the the side of the house which is obviously run down. Ive had someone look at it who says its not afected the house - its about a metre high so I cant see why the valuer has writted this in his report. I wonder if I can phone the surveyor for clarification on things once we've seen the report.
We'll just get on and do what Halifax have asked - get quotes and discuss new price with vendor and keep our fingers crossed. (Again)

kingstreet

The report will contain;-

- essential repairs considered to affect the security/value
- non-essentials
- general comments/remarks.

TBH if I were your vendor, I wouldn't be prepared to consider a price reduction without sight of your valuer's report and the reports and estimates which back-up your claim. Once you have the valuer's report you shouldn't need to talk to the surveyor as what they require should be self-explanatory.

The report is unlikely to show the surveyor's details if you've only had the basic mortgage report and valuation as this is for the lender's use only.