Am i being played by the EA - or paranoid?

wondernick

I'm a FTB and I've been viewing properties for a little while. I've seen somewhere I really like for 150k. It's in need of modernisation (was lived in for 50 years beforehand), but i'm thinking that as a single guy this can be a bit of a project (whether that's a good idea would be a different thread!!!).

A similar house (bit smaller, much better presented, newish kitchen etc) sold for 147 last year.

I don't think this house has been on the market that long, there was an offer agreed but the buyer pulled out because of his finances (this was only a week or two ago).

I went to see the mortgage broker who is based in the EA and got some figures together for a 150k mortgage, and I'm seeing him on Monday to try and get something agreed in principle. He actually rang me on his day off to arrange the meeting, and I made the mistake of telling him that i liked this property.

After this I got a call from the EA saying that a similar property (but worse area) that was previously under offer was back on the market, and that there was an offer on the house I'm interested in, but it was too low and they didn't know if they were going to up their offer.

I've arranged a second viewing on Monday with some friends (one is a surveyor, another has bought and done up a few properties).

I'm quite suspicious about getting a call from the EA so soon after speaking to the broker (who says he's independent). anyway i have a few questions.

1. If i get a mortgage agreed in principle for 150k from the broker, will the EA think that that is my budget and try and screw as much as possible from me? would I be better to get a mortgage in principle for 140k (which is what I would like to purchase the property for).

2. if I make an offer I was thinking of offering 135, but the fact of this other offer has thrown me, and I feel nudged into making a higher offer (say 140k). Should I disregard the other guy offer 135 and see what happens?

3. should I view the other property, even if I'm not really interested, should I pretend to be?

I've been looking through this forum for most of the morning and there's some good people here, I would really appreciate any thoughts or comments!

keithdc

wondernick wrote: »

I went to see the mortgage broker who is based in the EA

That is your first mistake... that does not sound independent to me!!

Is a particular reason why you need a broker (eg odd financial situation) rather than just doing it yourself?

wondernick

i don't have a big deposit (at all!) which is frustrating as a have a good job (work for a uni) and can easily afford the mortgage repayments, should have a decent credit rating, paid off other debts (use cc which i pay off monthly and have a lease car).

i first went to charcoal who were friendly and efficient, and cam up with a decent enough deal, but the broker has *apparently* found somebody willing to lend 95% which is what i need.

suestew

keithdc wrote: »

That is your first mistake... that does not sound independent to me!!QUOTE]

I agree, I would shop around, don't go with first one.

wondernick wrote: »

A similar house (bit smaller, much better presented, newish kitchen etc) sold for 147 last year.QUOTE]

If you are taking friends round who can advise you how much it will cost to modernise then make an offer based on that. I would take with a pinch of salt what the EA is saying, they could be lying about the other offer, stick to your guns and don't offer more than you think it is worth.

thelem

Offer what you think it is worth, and be prepared to lose it if the vendor doesn't agree.

Don't get your mortgage through the EA's broker, it's the easy option so is unlikely to be the best deal. Do go to the meeting, but make your finances look worse than they are so that when the "independent" broker is chatting to his EA mates over lunch they don't get told you can raise your offer. I don't mean lie about hard facts, but you can tell him you have less money to put towards a deposit than you really have, and scatter a few extra pounds per month around your budget.

wondernick

cheers for all your help. I think i know what to do, it's just a different matter actually doing it, so i really appreciate hearing all your sensible advice.

i think i will ask for a mortgage in principle of 140k, citing the level of repayments i'm happy with. if my friends don't think i'm biting off more than i can chew i will make an offer and we'll see what happens!

kingstreet

How much "doing-up" will these properties need?

Do you have the cash to bridge a retention? If you want a 95% mortgage, you might have to concentrate on things ready to live in.

wondernick

kingstreet wrote: »

Do you have the cash to bridge a retention?

i don't know what this means?

Yorkie1

The lender can refuse to release all of the mortgage funds at the time of purchase - retaining them until certain specified works have been done.

kingstreet is asking if you have spare capital in the interim period to make up the amount which may be retained initially from the lender.

wondernick

When i viewed the property the estate agent mentioned that the electrics might need doing and that that could come up in the survey. presumably this is the kind of thing you're talking about? this could even be the reason why the initial interested party backed out i guess.

if that was a grand or two i think i could cover it (on top of all the other costs of moving).

kingstreet

Roof
Timber & Damp
Electrics
Structural

These are the kind of issues which come up on a mortgage report & valuation and can cause a retention.

The cost of the repairs would be calculated and held back from the mortgage until the work is done. You therefore need to "bridge" this by being able to increase your deposit by an equivalent amount.

You would need to be able to pay for the work too, before the mortgage retention is released.