Is this doable? Is it even legal?

suzieq

We recently sold our house, but it fell through after the survey came back as it needed about £7k worth of work doing. We offered a £5k reduction on the house price, but the buyers rejected this, saying that as they had a 90% mortgage, it wouldn't actually be cash in their hands to do the work.

Now, as we're on the brink of losing the house we desperately want to buy, I wondered if there was any circumstance in which we could have them pay the original agreed price for the house, but then we give them £5k cash on completion? is there a way of doing this with or without solicitors? Trying to think of any way possible to get this sale through!

HappyMJ

suzieq wrote: »

We recently sold our house, but it fell through after the survey came back as it needed about £7k worth of work doing. We offered a £5k reduction on the house price, but the buyers rejected this, saying that as they had a 90% mortgage, it wouldn't actually be cash in their hands to do the work.

Now, as we're on the brink of losing the house we desperately want to buy, I wondered if there was any circumstance in which we could have them pay the original agreed price for the house, but then we give them £5k cash on completion? is there a way of doing this with or without solicitors? Trying to think of any way possible to get this sale through!

Not very easily. They need £7,000 to do the work not £5,000 so they'll still have a problem if they don't have a spare £2,000 which if they did they'd be using it as a deposit.

benjus

The buyer's mortgage lender would probably have an issue with it - I think they would essentially treat it as if you'd offered the £5k reduction in purchase price.

If you keep it informal and off the record then it would probably amount to mortgage fraud, plus the buyers would have to be very trusting to take your word for it that you'll pay them the £5k.

mrginge

How are they going to fund the 7k difference before you hand them back 5k?

pimento

Have the work done yourself?

ReadingTim

It sounds like the problem is more with your buyers than you, as their size of deposit / LTV means they won't have the spare cash to do the works.

Your choices are either get the works done yourself, which you don't seem to want to do / pay for all of them; or find new buyers and hope they have deeper pockets. However, in addition to the delay this will entail, you risk having the same argument all over again with someone else.

Your choice will be determined by how much you want the place you want to buy, and how much that vendor wants to sell to you - you could see if you could negotiate a £5-£7k reduction in the purchase price of the new place, or you might simply have to take the hit yourself.

suzieq

HappyMJ wrote: »

Not very easily. They need £7,000 to do the work not £5,000 so they'll still have a problem if they don't have a spare £2,000 which if they did they'd be using it as a deposit.

Hmm, yes I guess so. The thing is, the work needing doing plus scaffolding for access comes in at £5k, but they want to do a further £2k worth of cosmetic work 'while they're up there', which I get, but I don't want to pay for.

suzieq

benjus wrote: »

The buyer's mortgage lender would probably have an issue with it - I think they would essentially treat it as if you'd offered the £5k reduction in purchase price.

If you keep it informal and off the record then it would probably amount to mortgage fraud, plus the buyers would have to be very trusting to take your word for it that you'll pay them the £5k.

Yeah I did wonder if it might be classed as fraud or something. We don't know the buyers very well, but our families know each other, so I think they would probably trust us, but I'd be worried about someone getting into trouble!

suzieq

mrginge wrote: »

How are they going to fund the 7k difference before you hand them back 5k?

The lender only required a basic valuation to offer, which agreed with the original purchase price, so they have a formal offer for the whole amount.

suzieq

pimento wrote: »

Have the work done yourself?

If they were to buy the house, they said they wanted to do the work themselves. I guess it's our house & our choice though. We haven't opted to do this so far as we're concerned about how long it'll take to do & losing the house we want to buy.

suzieq

ReadingTim wrote: »

It sounds like the problem is more with your buyers than you, as their size of deposit / LTV means they won't have the spare cash to do the works. correct!

Your choices are either get the works done yourself, which you don't seem to want to do / pay for all of them; or find new buyers and hope they have deeper pockets. However, in addition to the delay this will entail, you risk having the same argument all over again with someone else. This is true. As I said above, they said they had their own builder & wanted to get the works done themselves, so we haven't done that as yet.

Your choice will be determined by how much you want the place you want to buy, and how much that vendor wants to sell to you - you could see if you could negotiate a £5-£7k reduction in the purchase price of the new place, or you might simply have to take the hit yourself.

I don't mind taking the hit for £5k, which is level 3 essential stuff, but I begrudge paying the extra £2k for non-essential cosmetic bits....