Been gazumped - how does this affect my mortgage fees?

SephirothX

I had an offer accepted on a property a couple of weeks ago for £5k under the asking price and requested it be withdrawn from the market. It was withdrawn, and I proceeded with my mortgage application. I contacted the bank yesterday to see if they'd received my documentation and found out a valuation has been booked in for January 10th.

Today, the estate agent called me to say a previous buyer has returned with an offer of the actual asking price. By previous buyer I mean someone tried to buy it two months ago but the sale fell through as they couldn't sell their own house.

Either the new offer is fake (I hear this does happen!) or the previous buyer really wants the property since they're offering the asking price rather than just out bidding my offer. As such I am unlikely to decide to enter a bidding war by increasing my offer by £5k or more. The property had been on the market since March and at its current price since July so I'm suspicious that a previous buyer would come back right after Christmas right after my valuation is booked!

I am wondering how this affects by mortgage fees. As I am a first time buyer I moved quickly with setting up a mortgage and solicitor. I have paid the mortgage application fee and valuation fee but the solicitor has not taken any money yet.

I understand that the mortgage application fee is non-refundable but can this fee generally be used towards a new property when I find one? Or is that money gone completely when I withdraw my offer?

Also will my valuation fee be refundable since the valuation hasn't happened yet? There is nothing on the bank's website regarding that, only that the fee is non-refundable if the valuation has been carried out - which it hasn't.

kingstreet

Stop the valuation.

The fees situation varies from lender to lender, so no way of saying.

SephirothX

I can't ask them until tomorrow morning now as the office dealing with my application is closed. Looking in my key facts document the valuation survey is listed under non-refundable fees. I don't know how they can justify charging for something that they won't be providing.

csgohan4

SephirothX wrote: »

I can't ask them until tomorrow morning now as the office dealing with my application is closed. Looking in my key facts document the valuation survey is listed under non-refundable fees. I don't know how they can justify charging for something that they won't be providing.

Unfortunately they have, in the T+C, you signed up for. Best to let the EA you will now be looking at other properties. Most of the money you have spent so far is non refundable, such as solicitors unless there is a no buy no fee arrangement for example

SephirothX

csgohan4 wrote: »

Unfortunately they have, in the T+C, you signed up for. Best to let the EA you will now be looking at other properties. Most of the money you have spent so far is non refundable, such as solicitors unless there is a no buy no fee arrangement for example

If that is the case then should I not just let the survey go ahead anyway in case I decide to increase my offer at a later date? This is still a possibility, but I don't want to be rushed into making that decision tonight.

Who gets this money if the bank isn't going to be paying a surveyor company to do a valuation/survey?

Regarding solicitors, I haven't paid anything yet but they aren't no buy no fee - they charge a pro-rated fee for sales that don't complete. They only received my documentation a week ago so I don't think that will be high. Certainly I will have to contact them and ask tomorrow.

ACG

The val fee will get refunded if it has not been carried out - some lenders charge a val fee + val admin fee. The lender may only refund the val fee portion but it is down to the deal you signed up to.

I would make a decision on what you plan to do and then decide whether or not to cancel the application/valuation.

SephirothX

I guess I will only know for sure when I ask them. It does sound strange that the website states "Once a valuation has been carried out, we can't refund the fee even if your mortgage does not go ahead.". You'd think if they won't refund it no matter what then they shouldn't specify "Once a valuation has been carried out".

The thing with the valuation fee is it is a discounted rate. My mortgage company is Chelsea Building Society and they offer a free valuation. I paid the difference of £185 to upgrade to a home buyer's valuation.

I would be willing to increase my offer but to increase by £5k isn't a decision I want to rush into.