Cashback on completion?

risktaken

Hi, I am currently buying a house for the first time. The house was up for £125,000 and required a fair bit of work. I put an offer in for £110,000 which reflected the work that needed doing. I explained that i had no chain, had money for the deposit and was after a quick sale. I wasn't interested in playing games. I wasn't going to try and barter the price down etc. After 2 days they asked if i would raise the offer, I said no, they accepted. 3 weeks on and amazingly we are ready to exchange contracts but on my last viewing i found some dry rot. The survey confirmed that it needed new roof, new electrics, central heating, new kitchen, bathroom etc and that has all been priced in. However the confirmed rot and the advice that there may well be more rot has meant I have booked a timber and damp survey. Now I have no idea what to do.

If the report says, for example, the work will cost £2,000, should I ask her for half? or to pay for it? or to reduce the price? what I would really prefer would be for the seller to pay around 1/3 in cash (for example £700) on completion and I would sort it myself. Is this even legal? from searching Google I have found in America it is quite common for the seller to pay the buyers completion fees to cover events like this. so while they aren't paying me cash direct, they are freeing up cash immediately. If i can only barter the asking price down then all that will do is slightly reduce my monthly payments but I need the cash now! any help would be greatly appreciated!

movilogo

Houses are sold as seen and don't expect seller to pay anything after the sale.

kingstreet

Vendor gifted deposit and cashback on completion will see the valuation of the property reduced by that amount, so you'll end up back at square one, as you'll have to increase your deposit by that amount to make up the difference.

tigsly

You ask her to meet in the middle - so if its 2k she gives you 1k back,,,

this lowers the price you pay by 1k - and will leave you 1k in profit,,,

so...for example you were paying:

110 = purchase price
10 deposit
100 = mortgage

now you are paying
109 = purchase price
9 = deposit
100 = mortgage
1= 'spare' cash!

If you've had a valuation for the property to say its work 110... the seller might not shift !

mrginge

tigsly wrote: »

You ask her to meet in the middle - so if its 2k she gives you 1k back,,,

this lowers the price you pay by 1k - and will leave you 1k in profit,,,

so...for example you were paying:

110 = purchase price
10 deposit
100 = mortgage

now you are paying
109 = purchase price
9 = deposit
100 = mortgage
1= 'spare' cash!

If you've had a valuation for the property to say its work 110... the seller might not shift !

I'm afraid not.
Apart from the fact that your sums don't add up, your logic would suggest that if the price dropped to 100, the deposit would then be 0.

risktaken

mrginge wrote: »

I'm afraid not.
Apart from the fact that your sums don't add up, your logic would suggest that if the price dropped to 100, the deposit would then be 0.

Thanks for the replies! thats what I thought. If she reduces the price by 1,000 to 109,000 then all that means is my 10% deposit reduces from £11,000 to 10,900 and my mortgage will be £900 +interest less. So how do people usually settle things then when a homebuyers report brings up issues after the price has been agreed? Can I ask her to pay for some of it in a totaly seperate tansaction than the house sale? Like she agrees to pay the first £700 to the company that sorts the dry rot? Or is this not going to happen? Cant really afford an extra £2000 at this stage!

tigsly

Sorry, my bad I didn't realise you had to have the 10% deposit (my LTV - is greater - so theres a bit more 'wiggle room' .. )

I dont think there is a way round it.. sorry

I suspect 'dry rot' is a sever problem tho, and think it often costs more than 2k to get 'rid of' ..

F_Bear

The survey confirmed that it needed new roof, new electrics, central heating, new kitchen, bathroom etc and that has all been priced in

dry rot on top of this bill wont be worth the hassle of annoying the seller if after 3 weeks your ready to exchange. youve already got 15k off what she thought was prob a fair price

risktaken

But say she agreed for example to pay £700 or knock that amount of the asking price, could I do what is apparently very common in the US and ask her to pay £700 of my solicitors fees? This is a good way of getting round problems like this and is legal in america and means basicaly that cash would be freed up for me due to the savings of my solicitors fees. Has anybody heard of this happening this side of the Atlantic?!

tigsly

Last time I bought a house a house - the lady buying had got a keen price from us.. she then went on on to have many surveys and wanted to get more money off our property..

I said NO.. the estate agent swallowed the money from our 'fees'.. theywere selling her flat and our house.. so were getting 'fees' from her and from me.. so they 'really wanted' the sale to go through..

So it could be possible, but the vendor will want to give you the cash, which they might not want to.

cattie

What stands out here is the fact that the vendor accepted your offer on your word that you were not going to try to barter the price down, so you have to be prepared for the answer to be no to any requests to knock more money off.

If it were my house I'd not be willing to negotiate any more as I would consider you somebody completely without honour who didn't stick to their word.

What is legal in USA has no bearing on how things are done here in the Uk, so pointless looking for solutions there.

Regarding a vendor paying your legal fees or part of, this is sticky ground & would need to be fully discussed with a solicitor before even thinking about such a thing.