Advice re offer / escrow account

simplymegreg

I'll try and keep this simple.

Thinking of putting in an offer on a leasehold flat. Only issue is apparently the whole terrace of flats are due to have their exterior iron staircases replaced which lead to the flats' respective gardens. The vendor says the leaseholders have been quoted £5k for this per flat and this has been agreed to but payment has yet to be made as works haven't begun yet. The vendor says he'd be happy for an offer to reflect this.

I'd prefer that £5k of the purchase price be held by the solicitor in an escrow account for the purposes of the staircases being replaced as this would help with cashflow from my perspective.

Does this sound like a reasonable thing to ask for as a condition on an offer?

Thanks

tim123456789

So

you want, for example:

to pay 125K for the property with 5K being kept to pay for the works

instead of:

paying 120K for the property and then paying 5K for the works when the bill comes in.

Is that right?

simplymegreg

tim123456789 wrote: »

So

you want, for example:

to pay 125K for the property with 5K being kept to pay for the works

instead of:

paying 120K for the property and then paying 5K for the works when the bill comes in.

Is that right?

That's correct.

tim123456789

I was hoping that my post would prompt someone else to come along with more ideas but:

What advantage do you see from this method?

tim

simplymegreg

tim123456789 wrote: »

I was hoping that my post would prompt someone else to come along with more ideas but:

What advantage do you see from this method?

tim

Liquidity.

In the event that I complete and the bill for £5k becomes payable immediately (worst case scenario) then if the £5k were held as stakeholder by the solicitor then it would be sitting there ready to be used.

If, on the other hand, I reduced the purchase price and had to pay the £5k bill myself then, as I will be taking out a 90% LTV mortgage, finding the £5k from somewhere could be a struggle. The fact that the purchase price has been reduced does not assist me from a liquidity point of view because obviously the amount I can tap the mortgage for is restricted to the value.

Ultimately, £5k is a lot of money and that is basically a good chunk of my 'start up' pot to go on decoration / furnishings!