Retention question - when valuation matches sale price.

rlove

Hi

A question about retention when the valuation's current market value is the full asking price we paid for the property.

We offered the full asking price of £215k for the property which was accepted. £80k deposit, £135k mortage, agreed subject to valuation. Lender's valuation report received today.

It says under 'Essential repairs required for mortgage purposes' - "Repair slate roof and chimney flashing'.

Market valuation:

Present condition = £215k (i.e. price we paid)
With essential repairs completed = £216k (£1k more than price paid)
Is retention recommended = Yes
Is reinspection recommended = No
Amount of retention = £1,000

So, I understand a retention if the present valuation is less than the sale price, and therefore the basis for the mortage agreement. But, if the valuation in present condition is the same as the sale price, and doing the repairs takes it to more than the sale price, why recommend a retention?

Main question is, is this likely to mean they withhold £1k of the mortgage until those repairs are made, even if current valuation matches mortgage + deposit. If they do, do they give you that £1k after you've done the repairs, maintaining the £135k mortgage, or do they reduce it to a £134k mortgage? (I appreciate I'd have to come up with another £1k deposit, which isn't hugely problematic, just a bit irritating!)

Thanks for any help.

dc197

Does sound odd. Could it be a simple error, the valuer was daydreaming then he wrote down the numbers and put 215 instead of 214? I'm sure your lender can explain.

rlove

Thanks DC. Possible, but he would had to have made two mistakes, the current valuation and valuation after work carried out.

I called the lender, HSBC, to see if they could shed any light, but they said I'd need to speak to the valuers (Countrywide(!)), so called Countrywide and they said I'd need to speak with the lender!

I've emailed my solicitor to ask his opinion, but I'm not sure how much it is his area.

Anyone know how retention issues make progress? Should I be expecting a call from my lender at some stage?

sam2015_2

Is that on your mortgage offer? or just on the valuation report?

My recent purchase was by countrywide, the surveyor recommended some work needs to be done asap. My mortgage offer had a special condition that those works needs to be carried out soon after completion but no mention of retention.

rlove

Thanks Sam.

I shall have a look though my mortgage offer again when i get home. The details I've given were just on the valuation report. I know the mortgage is subject to valuation, so there will presumably be some mention of retention on the mortgage report, albeit they would not have know if retention was recommended or the amount of it when the mortgage offer was drawn up.

Just because the valuers suggest a retention, I wonder if this always means the lender do what they suggest.

ThePants999

You had a mortgage offer that was subject to valuation? That's odd, I thought lenders only provided offers after valuation.

rlove

Thanks ThePants 999.

My first time, so it's all new to me. Will be looking through the mortgage offer docs when I get home. I'm pretty sure that's what it says, but my memory isn't always reliable.

dc197

ThePants999 wrote: »

You had a mortgage offer that was subject to valuation? That's odd, I thought lenders only provided offers after valuation.

I also got such an offer.
It arrived a few days before the valuation and had words to the effect of "once your valuation is done....".
It had some typos so I asked for a re-issue. When that came, after the valuation, is still said "once your valuation is done..." I queried this and was told it was boiler plate and could be ignored.

dc197

rlove wrote: »

Thanks DC. Possible, but he would had to have made two mistakes, the current valuation and valuation after work carried out.

I called the lender, HSBC, to see if they could shed any light, but they said I'd need to speak to the valuers (Countrywide(!)), so called Countrywide and they said I'd need to speak with the lender!

I've emailed my solicitor to ask his opinion, but I'm not sure how much it is his area.

Anyone know how retention issues make progress? Should I be expecting a call from my lender at some stage?

True, but it could also have been an extension of the original mistake.

rlove

Spoke with lender today. They advised valuation was fine and they wouldn't be doing a retention despite the surveyor's recommendation.