How is best to accept a reduced sale price following survey?

Bizbeth

I am a FTB looking for advice on how best to implement a price reduction offered by the vendor...

Process so far is; offer accepted, mortgage offer received, home buyer's report has brought up some minor issues, vendor has offered me £500 off the price as a "good will gesture". Can I accept this reduction without going back to my mortgage provider?

The estate agent tells me I don't need to go back to my mortgage provider and that my conveyancer can put it through as an "adjustment" or "amendment" (I can't remember what term he used), but my conveyancer says they need to notify my mortgage provider and this may affect my LTV ratio and hence my interest rate.

I don't want to go back to my mortgage provider at this stage, and so am wondering if it is just best to turn down the vendor's offer, or if there is a way I can accept it without changing my mortgage. I'd appreciate advice please!

G_M

mortgage lender needs to know.

Your solicitor will almost certainly be the mortgage lender's solicitor too, so will tell them anyway.

marksoton

£500 indicates you must be right on the threshold of a LTV bracket.

Is that the case?

Bizbeth

Thanks for your replies. So the £500 would come off the house value? And the loan value would remain the same, so the deposit value would decrease? Does this mean essentially re-doing the mortgage approval process again? (credit check, checking with employer etc.?)

Yes, the £500 would take me into the next LTV bracket. Although I do have more deposit available - I didn't realise this might be an issue when I applied for the mortgage... :undecided

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marksoton

Bizbeth wrote: »

Yes, the £500 would take me into the next LTV bracket. Although I do have more deposit available - I didn't realise this might be an issue when I applied for the mortgage... :undecided

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Then you've some sums to do!

BTW Never listen to the EA, they represent the vendor and themselves. Your legal representation you and your lender.

always_sunny

you'd need to tell solicitor and lender too cause more likely the lender will need to resend you a new offer and you will not be able to exchange/complete till then.

Why don't you want to go back? Even if the property you're buying is £50k, £500 is 1%!
Maybe you can wink wink at the seller and get it in cash! Oh dear.

davidmcn

always_sunny wrote: »

Maybe you can wink wink at the seller and get it in cash!

Winks aren't legally enforceable.

eddddy

Bizbeth wrote: »

The estate agent tells me I don't need to go back to my mortgage provider and that my conveyancer can put it through as an "adjustment" or "amendment" (I can't remember what term he used), but my conveyancer says they need to notify my mortgage provider and this may affect my LTV ratio and hence my interest rate.

Was the word "retention"?

That would mean you pay the full agreed price for the property - but your solicitor "retains" £500 of the money that should have gone to the seller, to cover repair costs.

When you get repairs done you don't pay for them, instead the solicitor pays for them - out of the £500.

(So, overall, it has the same effect as the seller reducing their price by £500.)



I believe this is acceptable to most mortgage lenders. It's worrying that your conveyancer couldn't work out what you meant.

Are you using a 'conveyancing factory', perhaps recommended by your EA? They might be shying away, because they don't want the extra hassle of dealing with a "retention".

If you were dealing with a traditional solicitor, I think I would expect them to deal with a retention at no extra charge.

davidmcn

eddddy wrote: »

If you were dealing with a traditional solicitor, I think I would expect them to deal with a retention at no extra charge.

I wouldn't - retentions are a complete pain, required by only a small minority of clients, and tend to end up in limbo for years because everyone forgets about them or never end up doing the required work. Always better to find an alternative solution.