Help! Price reduction and mortgage

TrixA

lk92k wrote: »

What about the works to be carried out between exchange and completion? We did this and instead of the typical 1 week between exchange and completion, we had 3 weeks so that the work wasn't as rushed and we were able to inspect everything before we completed on the sale. Our solicitor advised this rather than waiting until after completion.

Presumably that would only work if the vendors were going to cover the full cost of the works? I think it's likely we'll ask them to pay a proportion of the costs, say £5-6k. Given we're going to be living in the house it's also important to us to make sure they were done to a satisfactory quality.

TrixA

blues wrote: »

We just did the same thing. We reduced our offer due to work which needed doing. Our mortgage company advised we kept the purchase price the same and our solicitor kept back the 5k we negotiated off and gave it back to us an "allowance for works." This worked out fine. Just be aware though that you pay stamp duty on the original purchase price.

Thanks, that sounds like exactly the situation we're in - it's reassuring to have it confirmed that it's not out of the ordinary. I realise we'll have to pay SDLT on the original purchase price but the difference is only a few hundred pounds.

lk92k

TrixA wrote: »

Presumably that would only work if the vendors were going to cover the full cost of the works? I think it's likely we'll ask them to pay a proportion of the costs, say £5-6k. Given we're going to be living in the house it's also important to us to make sure they were done to a satisfactory quality.

We did a 50/50 split. Good luck with your purchase

TrixA

So we asked for a £6.5k allowance for works (effectively a price reduction), and the vendor came back with a 'best offer' of £1.5k. The agent says that the vendor and her partner (who she's now moved in with) have now found their "dream house" but she needs the full sale price so they can buy it. This seems bonkers to me, since if we walk away she'll have to find a new buyer and the dream house will be in jeopardy anyway. We've offered to meet her in the middle at £4k, but the agent did not seem hopeful.

The sums we're talking about are less than 2% of the total sale price, For us as FTBs it's money we'll have to find up front on top of deposit, stamp duty, lawyers' fees etc, whereas the vendor is pocketing a massive windfall on a house that has quadrupled in value since she bought it 15 years ago. Surely the discussion should be about a fair price for this house, not whether she has sufficient to fund her dream house?

Mattygroves2

Part of your problem is going to be that the bank think the house is fairly valued now with no reduction for the works that are needed so your vendor should be able to get full asking price from someone else.

Both of you can choose to walk away and the argument that it is only a small proportion applies to you as well as them - why risk your dream house where you'll live for the rest of your lives for £3k? It depends on how much you want the house. We've walked away from two prospective purchases in the past because the vendor wanted too much.

There will be another house out there if this isn't your forever house (and maybe even if it is).

TrixA

It's definitely not our dream house, but we're already had one purchase fall through (which was much closer to our dream house, incidentally) and I don't know if I can face having to go back to square one again

Mattygroves2

TrixA wrote: »

It's definitely not our dream house, but we're already had one purchase fall through (which was much closer to our dream house, incidentally) and I don't know if I can face having to go back to square one again

It's been third time lucky for us twice so far ! At least you found out about the problems before buying the place.