When to pay your upfront fees...

shorty2240

Hi, first time buyer here

I've had an offer accepted on a property, great! And the mortgage is all agreed and going ahead.

Now I've reached the point where I have three fees to pay:

1. Mortgage valuation fee from Natwest (~£220)
2. Initial basic search fee with solicitor (£112)
3. Homebuyers survey (£300-450)

The thing is, I'm concerned that I'm not really getting any indication how the vendors search for a property to buy is coming along. I happened to talk to the vendor before I put an offer in and I was concerned because they hadn't really even started looking at properties as they wanted to wait until their place sold.

I don't want to pay these non-recoverable fees if the vendor might end up entering some huge long chain, or heck they might even just change their mind and drop out or something. I'm buying alone and scraping together every penny to put down 10%, if I paid all these fees and then it all falls through, it could seriously dampen my future opportunity to buy.

Online guides, including MSE's own, seem to basically say "get it paid" straight away... and I don't want the process to be held up on my end, but I don't want to throw money away either.

What's everyone's thoughts, can I wait until the vendor has had an offer accepted, or will that just mess things up?

ThePants999

You should talk to the vendors, or their agent, and find out what's going on. I doubt they're being deliberately secretive, and may well give you a straight answer.

You'll definitely want to figure out how serious they are about selling - paying non-recoverable fees only to have the vendor pull out is indeed a risk and does happen. I'd worry less about whether they're going to enter into a chain - chains are unfortunately the norm. Unless you have an issue requiring you to move by a given date - and you're in a tricky situation if you do - you surely wouldn't pull out just on the basis of your purchase being one of a chain. That said, there's a clear difference between a vendor who's thinking "I just want to wait until my sale is in a really good position before I put in an offer somewhere" versus a vendor who's thinking "I'm now going to wait for my perfect property to arrive on the market - sure, it might take all year, but my buyer's a FTB, they can wait". At the end of the day, it's going to be entirely up to you how patient you're willing to be, but talking to the vendor can't hurt.

By the way - have you checked to see whether Natwest will let you upgrade their valuation to a homebuyers report? There are potential downsides to the surveyor not being independent, but it'll likely save you money - the price they'd charge would almost certainly be less than their valuation fee plus a separate survey.

MrJB

Are the vendors stating that they will move into temporary accommodation as they say sold? Or do you mean agreed to be sold? Presumably they will need a mortgage for their new property when they find one? If so you could instruct solicitors and pay valuation fees etc when they've found the property.

shorty2240

Thanks for the feedback guys.

Ok so a little background, the vendors were previously selling with an online-only website service, they'd had the property listed for at least 3-4 months on there and it was going nowhere. When I arranged a viewing back then, it was with the vendor so I spoke to them directly. They'd not had much interest (crap website!) so they'd not looked at anywhere to buy. I believe they said they were waiting until they had accepted an offer.

When they left that website (I wont name names) the vendor found me on facebook and send me a message telling me they'd moved to a proper estate agent - so I do actually have a means of contacting them directly if I wanted....

After they moved to a "proper" estate agent, it got them several serious offers (including mine) within a matter of days (lesson to be learned there...)

By the way - have you checked to see whether Natwest will let you upgrade their valuation to a homebuyers report? There are potential downsides to the surveyor not being independent, but it'll likely save you money - the price they'd charge would almost certainly be less than their valuation fee plus a separate survey.

I've read a few reports that a survey like this will be well under the quality you'd get from an independent surveyor? But it is an idea worth considering... Thanks.

ThePants999

shorty2240 wrote: »

I've read a few reports that a survey like this will be well under the quality you'd get from an independent surveyor? But it is an idea worth considering... Thanks.

Shouldn't be. The main issue to my mind is that the lender will see it, so if there's an issue that wasn't serious enough for a valuation report to say "this isn't suitable security" but is a bit scary, the lender might insist something be done about it.

melstar11

Well unless you have paid for the mortgage valuation and it has been carried out, you won't get a formal mortgage offer as this is a necessary step in the process.

I don't know where you have read that about surveyors, but most are independent and do work for several lenders on a contract basis. They have a professional code of conduct, etc so wouldn't take too kindly to what you have stated. A lot of people seem to think Homebuyer's Reports are full of caveats and back side covering though so if you are buying an older property it may be worth paying an extra couple of hundred pounds for a full survey instead.

I would speak to the agent and find out where the vendors are up to with their own purchase before you commit your money.

melstar11

I didn't think the lender saw anything other than the valuation report section - they haven't instructed a Homebuyer's Report so don't have any right to it.

G_M

shorty2240 wrote: »

....the vendors were previously selling with an online-only website service, they'd had the property listed for at least 3-4 months on there and it was going nowhere. When I arranged a viewing back then, it was with the vendor so I spoke to them directly. They'd not had much interest (crap website!) so they'd not looked at anywhere to buy. I believe they said they were waiting until they had accepted an offer.

When they left that website (I wont name names) the vendor found me on facebook and send me a message telling me they'd moved to a proper estate agent - so I do actually have a means of contacting them directly if I wanted....

After they moved to a "proper" estate agent, it got them several serious offers (including mine) within a matter of days (lesson to be learned there...)

The lesson to be learned is presumably that buyers should make offers at the best time.

Had you made an offer when you originally viewed, the sellers might well have accepted a lower offer, since their agency fees would have been significantly lower.......

shorty2240

G_M wrote: »

The lesson to be learned is presumably that buyers should make offers at the best time.

Had you made an offer when you originally viewed, the sellers might well have accepted a lower offer, since their agency fees would have been significantly lower.......

Ha yes, that is certainly a lesson there, if not the one I meant. But in my defense, I had not looked at many houses at the time, and it was only about 10 days later when I was trying to arrange a second viewing that I found they had moved agents. Actually I would say it was their mistake not waiting a bit for me to get back to them, as I had shown keen interest from the start and mentioned bringing someone with me for a second visit.... Well, that's in the past now anyway, I'm relatively happy with the price I got :-)

AdrianC

Figure your priorities and your risks out.

If your priority is reducing cost, over saving time, then you need to prioritise what order you spend on stuff.

If the risk is the vendor's chain, then do the minimum until that's in place.
If the risk is survey-related, then do that first.
If the risk is mortgage-related, then get that through first.

shorty2240

You are right, I suppose it is often as simple as that, I worry too much about "what they are expecting from me" or "how it is normally done".

I will call the estate agent for an idea on how the vendor's search is going, and if they give a positive indication I will call the bank and ask about paying the extra for a homebuyer survey.