HELP - my mortgage is falling through week 15

evosy1978

hello all

im very stressed out at the moment.:mad:

Ive purchased an empty house on feb 2nd for £100,000.

The owner has died and the seller is hes son.

A week or two into the process the mortgage lender (accord mortgages) said after their avaluation, that we needed to get a damp and timber survey done. I done this and it highlighted lots of damp problems. The lender said we want all these problems sorted but to be honest its me that wants them sorted aswell.

I met up up with the seller and he aggreed to pay £10,000 for the work. He offered to pay once the money had cleared in hes bank but i said no. I said I want to tell my solicitor and he agreed to do the same.

I told my solicitor about this £10,000 10 weeks ago. He informed that i would get the money on complettion.

15th week and the solicitor is at the stage where he raises enquires (e.g the £10000 for repairs) . He decides to inform the lender of the £10,000.
They say NO WAY. They said they are now giving me a new mortgage offer of £100,000 - thats minus the £10,000.

So yes i still get the £10,000 but not in cash to pay for the repairs which they highlighted in the first place.

The solictor said he had to tell them about the £10,000.

Any way theres no way we can buy the house AND pay £10,000 for the repairs.

I would like advice as to what i can do know.

Im prepared to fone the solicitor tomorrow and tell him to forget bout the £10,000 and ill sort that out with the seller. Are we allowed to do this.

Also the solicitor, should he have known that the lender would do this. I told him bout the £10,000 10 weeks ago, every fone call Ive had with him, ive stressed that im not moving into the house with out that money for the repairs, he ses yes you will get it.

Any advice gratefull.

thanks

lic

Why not re- negociate the price dowards by £10k. That way the seller is effectively paying for the repairs as agreed.
I would never buy a property were the repairs would be paid for on completion by the seller. As he may well be sticking it to you.
If he is agreeable you both win, as he makes the sale and you get the property and the repairs are paid for by the vendor.

Hope it all goes well, and if not, maybe it was not meant to be. There must be other properties!!!!!

MortgageMamma

It should have been your mortgage adviser you were speaking to about that £10,000 from the seller as he would know more about accords policy on these things than the solicitor.

Has your mortgage adviser told you the reason accord are refusing to allow you the extra 10k?

evosy1978

hello lic,

i didnt quite understand what you meant. The lender is now lowering the price by £10,000 automatically now they know about the money. If the price is lowered as you say, affectively yes he does pay for the repairs but that doesnt put £10, 000 in my pocket as agreed to do the repairs.

hello Mortgage Mamma

well guess what, my FA phoned me yesterday to say he had a phone call from the lender, and to tell me what my solicitor had already told.

Now you might call me naive for this next comment, but, after the FA had sorted this mortgage for us 15 weeks ago, and I paid him hes £150, I honestly thought that was my relationship with him finished, move onto mr solicitor. (and to be honest as ive just consulted my girfriend he made out to me it was the end of our relationship with him, not once did he tell me to keep him informed of any progress etc)) Had I knew what you just said about telling my FA not solictor i may not be here now.

He did give me a reason, something to do with if it gets repossed, cant really remember.
this was 6pm last nite, we finished the phone call with him saying he was going to speak to a solicitor friend on my situation and would ring me back. Guess what he never rang back and when i foned him today hes got the day off.

I would like to know if the solictor should of known 10 weeks ago that this was going to be a problem.

thanks folks

homer_j_3

So have I got my head around this correctly.

You are buying a house and have agreed a price for 100k. You agreed this price on the basis that there were no major works to be done. Your survey has come back and following comments made surrounding the damp, you have had specialist reports done. Am I understanding this correctly so far?

If so what did the reports say? Did they say there were 10k worth of work to be done?

Did the valuation recommend that the lender withold or retain any money until the works are completed?

If so, the correct course of action would have been to speak to the EA to discuss the valuers comments and ask for the seller to either reduce in price or pay for the work to be done and you pay the asking price.

If not then the valuer has confirmed that the house is worth what you have paid the right price. You would then need to work out whether its feasible to proceed and pay for the work yourself.

I think that the solicitor has acted correctly in telling the lender the financial arrangement because he has a responsibility to protect the lenders interest too!

Without fully understanding the issue/what was said on the survey and what they recommended to the lender, i cannot explain what the solution is. If you could maybe be a bit clearer on this part I will see what help I can be.

Lipstick_2

Hello. As I see it the damp problem costs were identified after a specialist was brought in and the cost of remedial work was to be £10,000.

The OP then went into negotiation with the vendor to overcome the cost of the work. The vendor being a canny person agreed to fund the cost of this out of the full cost of the property after completion.

Normal practice, if you can get away with it!

The solicitor has protected his own back by staying in the middle and divulged everything to the lender as expected.

The unfortunate part of this is that there does not seem to be a mortgage adviser involved to help the OP out of the mire.

OP, get to the vendor and tell him to knock £10,000 off the price or the deal is off and stop being stressed my dear.

Luv

Lipstick

evosy1978

hey homer

""" You are buying a house and have agreed a price for 100k. You agreed this price on the basis that there were no major works to be done. Your survey has come back and following comments made surrounding the damp, you have had specialist reports done. Am I understanding this correctly so far? """

yep


""" Did they say there were 10k worth of work to be done?

Did the valuation recommend that the lender withold or retain any money until the works are completed?

If so, the correct course of action would have been to speak to the EA to discuss the valuers comments and ask for the seller to either reduce in price or pay for the work to be done and you pay the asking price."""

yep, retention yep £10000.

I spoke to EA who put me in touch with seller, we then arranged i pay asking price, he pay for works,.! I would get the money upon completion. all above board via both solicitors etc. I was assured over and over by my solicitor that i would get this money upon completion.


"""I think that the solicitor has acted correctly in telling the lender the financial arrangement because he has a responsibility to protect the lenders interest too!"""

I know that he has acted correctly, what im saying is why now and not when i told him about 10 weeks ago. and why keep saying i would get the money.

Thanks homer j.
let me know if you need any more info..



Hey Lipstick

"""if you can get away with it!"""

sorry lipstick I did not understand this comment. what is he trying to get away with?


"""OP, get to the vendor and tell him to knock £10,000 off the price or the deal is off and stop being stressed my dear."""

As Ive said twice in my previous posts if you had read them?, the lender is taking £10,000 of the price instead of letting me have the £10,000 in cash for the works.!!!

As for the deal is off bit - I know!!.

An for your last comment hmmm a tad inappropriate at this moment in time.

JoeK_3

Evosy, this calls for a strong person to negotiate.

What you are experiencing is unfortunately standard practice in the house buying process in England.

Contact the vendor and tell him your problem.

JoeK

MarkyMarkD

I really don't see the problem here.

The lender is retaining £10k from the property valuation until the works are done.

So get the works done post-completion and get the lender to pay the builders/whoever the £10k. End of story.

The proposal to get the lender to advance the full amount, but for the seller to sort out the repairs post-completion, was a complete non-runner. You are asking a lender to advance more than the current value of the property, on the basis of a rather dodgy undertaking from the vendor.

JoeK_3

Mark, the problem is the £10,000.

The OP does not have it and as a consequence can not proceed unless the price of the property is dropped.

JoeK

MarkyMarkD

Sorry, JoeK, but I still don't get it. So long as the £10k reduction in the mortgage offer is only a retention, and I can't see any reason why it should be anything else, the OP doesn't need the £10k.

The seller gets £10k less. The mortgage advance is £10k less. The retention pays out when the work is done.

If the point is that the seller won't accept a lower asking price but wants to pay the £10k over in some dubious way post-completion, then the seller is an idiot and there's no good reason for him to want to do it in this manner.