Valuation and Mortgage advice

Parafira

Hi guys,

I have a bit complicated question, if anybody knows a possible solution, could you please help me. Would love to hear from people working for Nationwide or a professional Surveyor (if they ever come to this forum :-)

I am buying a house (mortgage with Nationwide), Home Buyers Survey (done by Countrywide) has been done and the surveyor requested a structural engineer’s report. Structural engineer’s report recommended rebuilding one non load bearing wall (minor work, £1000 at most). Report was sent back to surveyor and the surveyor responded with the following:

“With respect to this we would consider that the property is adequate security for mortgage and we would recommend a retention of £5,000 be made till receipt of all local authority consents and confirmation that the works contained therein have been carried out. Therefore we would confirm our present condition value as £235,000.”

I have renegotiated the price to go down to 235,000 (initially it was 240) and reported this back to Nationwide. Nationwide reduced the loan amount by £5000 (which is fine with me) and asked the Surveyor to amend his report, to remove the retention (as the price went down) and sign off on this house as an adequate security for 235,000. According to Nationwide, the surveyor is still insisting on the wall being rebuilt before I get the mortgage offer, despite of the £5000 discount which is more than enough to cover the wall rebuilding. Nationwide says that the surveyor would not write some “Key Statement” acceptable by Nationwide.

It feels like Nationwide is not being honest and is hiding something from me. Surveyor said in his initial response that the house is adequate security and the current condition value is 235,000. Feels like somebody at Nationwide screwed something up and is trying to blame Countrywide. I cannot get to the bottom of this as Nationwide keeps saying that they cannot show me the internal valuation report sent to them by Countrywide.

Does anybody know what could possibly be done, some complaints, appeals, anything? It is ridiculous to lose a good house because of one minor wall which can be rebuilt in one day.

Thanks for your help,

Parafira

anybody? or is it too long to read? :-)

Bluebell1000

Could you ask the current owners to carry out the work before completion, and agree a price of, say, £236k, to cover the amount they'd have spent on the work?

Fire_Fox

Are you sure you have understood correctly? Normally a retention means you get the mortgage of, say, £230K and the other £5K is only released after you complete the work. So you have to find another £5K now. This is not to ensure that you can afford the work but that you DO the work. Have you asked what key statement? Have you spoken to the surveyor or asked your structural engineer if he will?

Maybe they feel this is too serious to wait, anything is worth a price it does not mean that it meets Nationwide's lending criteria. A load bearing wall is not really minor, it's supporting part of the property.

Parafira

Bluebell1000 wrote: »

Could you ask the current owners to carry out the work before completion, and agree a price of, say, £236k, to cover the amount they'd have spent on the work?

Hi is a pensioner in his late 60s, he has no money to do the work, that is why he gave me a discount of £5000.

Parafira

Fire_Fox wrote: »

Are you sure you have understood correctly? Normally a retention means you get the mortgage of, say, £230K and the other £5K is only released after you complete the work. So you have to find another £5K now. This is not to ensure that you can afford the work but that you DO the work. Have you asked what key statement? Have you spoken to the surveyor or asked your structural engineer if he will?

Maybe they feel this is too serious to wait, anything is worth a price it does not mean that it meets Nationwide's lending criteria. A load bearing wall is not really minor, it's supporting part of the property.

The retention was done when the price was 240, now the price is 235. Here is what Nationwide said about retention; "As discussed I can confirm if you reduce the purchase price by £5,000 the surveyor will remove his £5000 retention." I will DO the work, but only when the house is mine, Now I can do nothing. And the wall is non load bearing and has no structural impact whatsoever.

kingstreet

You have to increase your deposit by the £5,000 retention. Then you get the work done and use the retention money to pay for it.

A price reduction does not mean the retention will be lifted. An essential repair remains an essential repair. I would be surprised if the surveyor is prepared to remove the retention, regardless of what Nationwide say.

Fire_Fox

Parafira wrote: »

The retention was done when the price was 240, now the price is 235. Here is what Nationwide said about retention; "As discussed I can confirm if you reduce the purchase price by £5,000 the surveyor will remove his £5000 retention." I will DO the work, but only when the house is mine, Now I can do nothing. And the wall is non load bearing and has no structural impact whatsoever.

Is that the key statement? Retentions generally stand regardless of whether you reduce the purchase price, you usually complete the work once you move in, send your lender the documentation and the additional funds are released a couple of months after you complete on the property.

As I said "Normally a retention means you get the mortgage of, say, £230K and the other £5K is only released after you complete the work. So you have to find another £5K now. This is not to ensure that you can afford the work but that you DO the work."

Are you saying they will not give you a mortgage offer at all, or they will not offer you the full amount you want/ need to borrow?

Parafira

kingstreet wrote: »

You have to increase your deposit by the £5,000 retention. Then you get the work done and use the retention money to pay for it.

A price reduction does not mean the retention will be lifted. An essential repair remains an essential repair. I would be surprised if the surveyor is prepared to remove the retention, regardless of what Nationwide say.

Thanks, this makes sense, but the only problem in this case is that I cannot increase my deposit by £5000. I have offered Nationwide to sign a document binding me to rebuild the wall within 3 months from the completion, but they refuse.

Parafira

Fire_Fox wrote: »

Is that the key statement? Retentions generally stand regardless of whether you reduce the purchase price, you usually complete the work once you move in, send your lender the documentation and the additional funds are released a couple of months after you complete on the property.

As I said "Normally a retention means you get the mortgage of, say, £230K and the other £5K is only released after you complete the work. So you have to find another £5K now. This is not to ensure that you can afford the work but that you DO the work."

Are you saying they will not give you a mortgage offer at all, or they will not offer you the full amount you want/ need to borrow?

Initially the were saying about retention, now, after the price reduction, they are saying they will not lend unless the wall is done. You mentioned they will release the money a couple of months later, but I do not think the seller will be happy to wait a couple of months for his 5K.

kingstreet

Parafira wrote: »

Thanks, this makes sense, but the only problem in this case is that I cannot increase my deposit by £5000. I have offered Nationwide to sign a document binding me to rebuild the wall within 3 months from the completion, but they refuse.

That's why a price reduction doesn't deal with a retention. The only way to avoid it is for the vendor to get the work done and then sell to you at the "value after completion of any essential repairs."