Re negotiation advice post damp survey - moral dilemma or is it just business ?

lottie54321

Hi Everyone ,

We are struggling with a dilemma and would really appreciate any thoughts and advice on how you would progress the situation forward.

As everyone on here can relate with, buying a house often becomes a dilemma between the head and the heart, but ours is further complicated by how hard should we push to take advantage of our situation. We seem to be constantly asking ourselves is this fair or is this just business?

The facts - We are in the process of buying a small 2 bed terrace house in Leeds. Agreed sale at asking price of £164K no extras included. Great house, beautiful spec, close to both our works (halving both commutes), Mortgage is £88 less than current rent, but too small to be a forever family home but will be great home for next 3-5 years.

Everyone so far was happy until, yes you guessed it the Survey came back. Property was down valued and £4000 retention placed on it due to damp and timber problems. We therefore arrange new damp and timber survey and were told it would cost approx £3000 to do the work. However bank have stated retention of £4000 will stay in place until work is done.

We were given the report back on Thursday and asked for the weekend to think over how we want to progress forward. But we are confused as to what would be best.

Our situation -
1) No Chain
2) No furniture to store
3) Week by week lease on our current flat
4) £600 cost have been spent so far on Searches, Homebuyers report etc...
5) We have the money to pay the extra but no money to do the work or buy furniture,
6) Bank have already stated if asking price is reduced retention will still be imposed.
7) We bought the house as it had been fully refurbished to a high spec and hence dont want the inconvenience really of having the finish in all the downstairs rooms ripped out and replaced.
8) We can afford and have been approved for mortgage for much bigger houses but dont feel ready for that yet.
9) No way to add major value as property has no space for extension and roof is very low pitch, so as it has been refurbished to high spec we would only really be reliant on increases in the market to make any profit/increase our equity to move up the ladder in the future.

Their situation (that we are aware of) -

1) Have been very pushy and i mean very pushy in securing exchange date (daily emails towards the start of the process checking our mortgage approval etc) - exchange is set for 18 days time.
2) They need to relocate 250 miles away to start new jobs starting in 1 months time
3) They are in a chain and we have been told their seller will pull out if dont exchange in 18 days
4) They bought house they are selling as repossession for 110 K, 6 years ago, so we know they have equity, obviously we dont know the price of the house they have bought
5) We have met sellers face to face when viewing house, they seamed lovely, the owner explained they were currently in a chain and enthusiastically told us that they have found their "dream rural property" - we tried to take advantage of this when putting in initial offer but they said the would not move from the asking price.

So what should we do, what options do we have ? The Retention is fixed and will remain at £4000 - which the bank will give us back when we do the work. The Damp work will cost around £3000

Any advice on how you would approach this would be greatly appreciated

Thanks

Lottie

PixelPound

You have three options
- get the work done before, maybe you could show the report to the vendor as it could be a negotiation point. One option would be to lower the offer (though that wouldn't help you in your situation) or see if they would contribute to the cost of the work.
- get the work done after, when you can pay the £3K and then get the £4k back
- don't get it done and forget the £4k retention. Your mortgage will be for whatever they gave you i.e. excluding the £4K.

Immers7

Renegotiate the cost if you want the house. If they don't agree pull out.
It's just business like the way they purchased the property as a repossession. Huge increase in valuation in six years too.

Unsure what their dream rural house has got to do with it.

lottie54321

Although we haven't asked I dont think the vendor doing the work before completion will be an option, as they are super keen to complete ASAP. This has been clear all the way through and they have been constantly pushing for completion.

What level of re negotiation would you start with. Should we push hard and take advantage of their need to move asap in order to protect their chain and secure their onward "dream" property, as well as their need to move for new jobs etc.

The work cost £3K but would £10K off be too hard and create too much bad feeling. Their estate agent organised the damp survey so they are aware of the problems etc, they haven't showed their hand yet, so we dont know how open they will be.

We were buying the house as it has been refurbished to high standard but this will be ruined in order to repair the damp so this needs to be taken into consideration.

Can you ask for the cash to cover the work post completion ?

We dont have the cash to pay the retention and do the work that is needed - we will more than likely move on within 5 years or so, so don't want to be lumbered with these problems when we sell. Furthermore, when we sell we will not be in the same position we are in now, we wont be chain free. Also the property wont increase that much in value, as explained before, as its has recently been modernised and refurbished and their is no scope for extension/loft extension etc.

agrinnall

They would have to be desperate to sell to accept an reduction of £10K when the repair work costs only £3K, if they aren't that desperate then you would well find the property back on the market and you out of the running to buy it whatever you offer - neither side likes it when the other side tries to take unfair advantage.

I would be honest and reduce your offer by the £3K but be prepared to either negotiate or walk away.

Whatever you decide don't go for the option of getting the vendors to make the repair, they have no incentive to choose anything other than the cheapest possible work.

nomoneytoday

As you will get the benefit of the fix, i'd say ask for £3k, and then meet in the middle somewhere

steve_camberrr

Hey were in a similar situation with a retention for roofing works on a recently refurbished house.

Retention 8K with works costing 5K

We knew the sellers had to complete ASAP as they were relocating for new jobs ad they were also in chain.

We asked for the asking price to be reduced by 8K saying that we would walk away if they didn't accept, stating that the extra money was to cover any unexpected costs and the inconvenience of having the work done.

They huffed and puffed but we held our nerve and they caved in.

We were lucky and could afford to pay for the retention but this has wiped out all of our savings and we dont have any idea how we will fund the repairs. As although they took the 8K off the offer, in real terms this only saved us £800 in deposit contributions - we still have to find £4200 from somewhere to do the works. In hindsight i only wished we had pushed harder asking for more off but as this is a longer term home we were happy with this compromise.

You dont want to be stuck with a problem other people will try to rinse you for later when you sell. So push hard now.

Steve

kingstreet

So, likely "free" inspection and report by T&D contractor results in timber & damp work being needed.

Quelle surprise!

EAs should be smarter in ensuring they don't do this, as it's likely to cost their vendor a lot more than a £250 report by an independent T&D surveyor from somewhere like this;-

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

as it's more likely an objective inspection would have identified the cause of the problems such as leaky rainwater goods, moisture bridging damp course as soil level too high etc.

Chanes

Ask for a reduction for the price of the work plus something to compensate the disruption of having done and having to live with the mess of it. Our was 'move in' condition, at the last count we are £8k of fixes! And it isn't the cost that hurts as much as the disruption of the works!

lottie54321

Chanes wrote: »

Ask for a reduction for the price of the work plus something to compensate the disruption of having done and having to live with the mess of it. Our was 'move in' condition, at the last count we are £8k of fixes! And it isn't the cost that hurts as much as the disruption of the works!

Hi,

Thanks for the advice. Did you also have a retention as well?

If so would you rather ask for money off the purchase price or a cheque towards the repairs?

Thanks

Chanes

lottie54321 wrote: »

Hi,

Thanks for the advice. Did you also have a retention as well?

If so would you rather ask for money off the purchase price or a cheque towards the repairs?

Thanks

No, no retentions but we've had them on a previous property when they wanted the wall ties renewed. The truly annoying things about that was the surveyor who came to check the work said he didn't see any signs they needed doing anyway. that was £1500. in 1995 on a £40k house!

We asked for the money off the asking price, they agreed it.