Mortage comopany place Retention after valuation

FTBuyer2013

Hi folks

So all was going so well, FTB trying to buy a repossession, Virgin money sent out valuer yesterday who come back with the property has a damp problem and placed a rentention of £5k.

What does all this mean? Someone else who is going to check it out tomorrow, i think maybe someone that knows more about damp and the extent of problem, not quite sure who arranged this as all i paid for was a basic valuation.

My question is as this is a repossession where do i stand as the vendor is not likely to fix the problem.

Thanks

bris

The 5k is held back until the problem is resolved by the vendor, once complete they get the 5k. If the vendor doesn't fix the problem then the 5k is used to fix it.

Even with a basic valuation, obvious problems are pointed out, it doesn't take a full structural survey to spot a huge wet patch in a room.

The problem is repossessions are usually sold as seen and they may refuse the offer because of the 5k retention.

Ciderarmy1987

bris wrote: »

The 5k is held back until the problem is resolved by the vendor, once complete they get the 5k. If the vendor doesn't fix the problem then the 5k is used to fix it.

Even with a basic valuation, obvious problems are pointed out, it doesn't take a full structural survey to spot a huge wet patch in a room.

The problem is repossessions are usually sold as seen and they may refuse the offer because of the 5k retention.

This is not correct! A retention is held back until the BUYER sorts out the problem and then the money will be released to the BUYER. You will need to put up the extra 5k to be able to buy the house and then get it back when you have completed the work on the house.

Your best bet is to try an negotiate the price down.

Hope that helpss

kingstreet

So far, what you have is a suggested retention.

Presumably, the surveyor has requested a timber and damp report. Once the results of the inspection and report are known, the retention might be reduced, or lifted altogether if the work is slight, or none is required.

You should obtain a report from an independent damp surveyor. Estate agents tend to use contractors who do not charge for the report, but as they have an interest in doing any required repairs, you may be putting a rat in charge of the cheese store.

You should find an independent surveyor who has no interest in quoting for unnecessary work and have him inspect the property for you;-

http://www.independentdampsurveyors.co.uk/

Hopefully, you will find out that the property is cold as it is unoccupied and there is no real damp problem. There could be leaky rainwater goods, or soil bridging the damp course, none of which will require the type of treatment a contractor would suggest.

If the worst comes to the worst, money will be held back, so you would have to increase your deposit to bridge completion. Once you get any essential repairs done, the retention money can then be released to you.

Do you yet know the current valuation and valuation after essential repairs, as these may also have a bearing on how you proceed?

FTBuyer2013

Yea i guess i will soon find out. Say they do still accept my offer, does that mean its me forking out to fix the damp? And if so does anyone know what way it all works?
Is contracts agreed that i get work done, therefore im not out money for work and still get gazumped.
Probabaly seems an obvious question but not sure how this works.

kingstreet

It's too early to say.

You need to get the inspection done and establish what is actually needed. Don't be surprised if there's no damp at all. All a surveyor does is sticks a meter against the wall. That may indicate only that the property has been unheated for some time.

Once that's done, pass the report to the surveyor. Once has has established what's needed, the retention can be the same, more, or nothing at all.

Until you know the true cost and how the valuations will be affected, you can't really plan further.

Whoever is arranging your mortgage should be doing this. I'd be handling it if you were my client. Who is getting paid and expecting you to do this yourself?

FTBuyer2013

thanks so much, i was typing my last message and didnt see your responses Kingstreet & cider.

No i haven't seen the valuation report as yet. And yes it is a timber/damp survey which is being carried out. I hope it isnt a major job as i dont have a hole heck of alot of contingency money to be doing work up front.