retention on mortgage - advice/thoughts please

Kimstar_3

Hi all - this is my first time posting although spend my life on these forums and really appreciate all the good advice given.

We have just begun our ftb adventure and all had been going well ... too well perhaps!

Purchase price was 104k after seller took 1k off asking. Property has been on since aug last year and originally up at 115k so we were happy with final price. Mortgage appt with nationwide on 16th june, valuation on 18th june and tx on 20th to say valuation satisfactory. Another tx on Wednesday last week to say mortgage offer on way. We have paid 99 mortgage fee and valuation but added 400 product fee to mortgage.

We have received our mortgage offer from nationwide today but this has been made with a part retention. There are three areas of concern following the valuation - despite us being told originally by the lender that the valuation was completed without issue. The areas are;

1. Obtain a report from a specialist contractor on the condition of wall ties in external cavity walls and carry out repairs as necessary under an insurance backed guarantee
2. PCA registered timber and damp contractors report. Undertake repairs under insurance backed guarantee (vendor did mention that she had a damp proof course done when she moved into the property and this was 3 yrs ago so still under guarantee. Not sure if this would count still or if a new one would be needed)
3. Overhaul all roofs including the flat felt roof, guttering, chimney stacks and flashings ensuring watertight seal

We have told our solicitor and he basically said sounds bad start thinking about pulling out. Told estate agent about retention and they have agreed access to contractors and also offered to get someone to do a quote as well.

The contractor we spoke to guessed the retention amount as 2k when I read the issues out to her and was shocked when I said only 950. We can cover this from savings although obviously had other things wanted get done.

When I went to viewing I asked seller all questions I had seen on here inckuding whether any other buyers who pulled out, any issues known, any other surveys recently and all answers were no.

We wanted to move out quite quickly but we are also put off the property by this. We hadnt even heard of retention before so just spent day looking up others situations and advice is really varied.

Main questions while we wait for the quotes are:

1. Our solicitor said not to disclose the retention amount to estate agent. The agent we are using has a monopoly on pretty much all the properties in the area we want to buy. Would other people disclose?
2. If the surveys come back and say works needed are around the 1k mark would people go ahead or would the risk of costs piling up once work started put people off
3. Would the damp course that vendor had count and if we could prove that still in guarantee would nationwide be likely to accept that or do we need a new view
4. Should we start looking at other properties incl viewing so we have a back up plan or are we panicking too soon - this is more of a what would you do than expecting there to be a right answer
5. If roof says overhaul does that mean it def needs doing or could a survey from someone else say different and we dont need to go ahead?

Probably 100 more questions but won't add them all just yet!!

Again as a newbie I know I probably missed things or info but please let me know. Really appreciate any help or even just a dialogue with someone else who had similar experience. House buying can be a lonely business and feels like everyone else so clued up that dont like asking them all the stupid questions.

Kim

anselld

Is there anything to indicate that the items listed are actually defective in need of repair? If not then I would not bother with the reports which are probably just a*se covering by the Mortgage Co. Just fund the £950 from your savings and forget about it (this reduces your borrowing so you have not spent it).

Okydoky25

Is it defiantly a retention or a suggested one? When I was looking through our mortgage offer/valuation details I noticed a £2k retention for some suggested work but on closer inspection the valuer had suggested it but the mortgage offer did not.

bmunky7

Okydoky25 wrote: »

Is it defiantly a retention or a suggested one? When I was looking through our mortgage offer/valuation details I noticed a £2k retention for some suggested work but on closer inspection the valuer had suggested it but the mortgage offer did not.

Same here on a previous purchase. My thoughts are that the first 2 items are just to get them checked. I would do this then see what the report says, if it suggests a lot of money to fix I'd be inclined to pull out. The roof is likely to cost at least £950 in my experience so if that alone puts you off I'd pull out.

Definitely worth looking for other options - if you have one it strengthens your bargaining position if the reports suggest its expensive to fix these potential problems and you need to renegotiate the price down. Good luck!

kimstar_2

Thanks so much for replies

It is definitely a retention - Nationwide don't let us see the actual valuation so the wording of the retention is lifted from the mortgage offer. It says "special conditions - the attached also apply".

The way I read the conditions it seems like the damp and roof def need doing. Will wait to see what the survey comes back with when its done but the 'undertake repairs' bit on damp and the 'overhaul roofs' are worded different to the 'carry out repairs as necessary' bit in point 1 for the wall ties. May just be me over reading it though!

I had an email from the EA today which said the vendor does have damp proofing guarantees but they have gone to her solicitor. Email then said I would need to contact my solicitor, get him to request the paperwork, contact the contractor and get them to carry out repairs and then pass back to vendor.....I called my solicitor and he said absolutely not to do this because I) The damp proofing only done 3 years ago and problems so soon might mean needs more work - may not be my problem if we don't go ahead ii) this is her contractor not ours and until exchange its her issue iii) he has never heard of 'free work' being done under a guarantee and they will usually point to vendor fault such as decorating too soon after the damp course was done.

All makes sense to me so will be emailing back to EA and asking them to get vendor to speak to her solicitor. Also an issue that her solicitor still hasn't sent any title deeds or contracts through to my solicitor despite us giving them details on 30 May and asking for as fast an application as possible. Its worked in our favour because it means our solicitor hasn't paid out for searches etc.

Spoke to Nationwide and they have said they will refund the £99 but obviously lose the valuation cost. If we do go with another property then we will need full application again which we were expecting really.

kimstar_2

Update - we have found out that the specialists we have asked to carry out the survey for what work needs to be done are the same ones the estate agents use all the time. Typical that out of 20+ companies in the Manchester area we would randomly pick them!

Would anyone else be concerned or ask for another firm to do it on the grounds they may not be independent? Are we being unduly paranoid?

We haven't heard anything else since the update on Tuesday so now not sure if we should be chasing up or if it's not our place to. Any views from others would be gratefully received

Thrugelmir

kimstar wrote: »

Also an issue that her solicitor still hasn't sent any title deeds or contracts through to my solicitor despite us giving them details on 30 May and asking for as fast an application as possible.

Your vendor isn't going to incur any costs until you obtain a mortgage offer.

kimstar_2

Ahh thanks - that helps with our perception that they have been dragging their heels before we got the mortgage offer!

desperate_times

Thrugelmir wrote: »

Your vendor isn't going to incur any costs until you obtain a mortgage offer.

Not always true. If they vendor wants to proceed they will take the risk. Our buyer has not received mortgage offer but all legal matters are completed.

Thrugelmir

desperate_times wrote: »

Our buyer has not received mortgage offer but all legal matters are completed.

That's a personal choice. I've encountered too many time wasters over the years to expend any energy prematurely.

desperate_times

Thrugelmir wrote: »

That's a personal choice. I've encountered too many time wasters over the years to expend any energy prematurely.

True but I would rather waste a bit effort to get things going as quickly as possible. At very least no harm in getting solicitors to prepare and send contracts and information forms so buyers solicitor can review. Worse case not much lost as can use again for next buyer. Could take 4 weeks or more to get formal mortgage offer. If I was a buyer and vendor refused to do anything until then I would be a bit peeved.