Building survey - paying for issues?

virginblue4

Hi all,

My partner and I are looking to purchase our first house together and have a second viewing of a property we like later this week. We are currently dealing with a mortgage advisor and are hoping to have an agreement in principal sorted very soon.

It is a little premature but I have a question regarding the survey and what happens if there are any urgent / immediate issues that need addressing.

So for example, if we undertake a building survey and the surveys picks up an urgent problem, lets say a new roof, I understand I have a couple of options:
1. Renegotiate the selling price of the house
2. Ask the seller to fix the issue before exchanging
3. Fix the issue at our own expense
4. Pull out


Assuming we are able to go for option one, how would the amount that we can borrow be affected?

Some example figures:

Offer accepted on house for £250,000
Deposit we are putting down £25,000 (10%)
Amount we need to borrow £225,000
Cost to repair roof £5,000
Renegotiate offer on house to £245,000

If this were to happen, would the lender still lend us the original £225,000 (90% of the value) or would they now only offer us £220,500 (90% of the new value)? If this is the case, then we would still effectively have to pay the £5,000 repair costs out of our own savings so the preferable option would be for the seller to fix the issue first?

I just want to understand if I am correct in my way of thinking or if I have made a mistake?

Rambosmum

Don't ever go for option 2 unless you can guarantee they will do a good job, usually they'll do the cheapest job possible.

In terms of how it'll affect your borrowing, it'll depend on whether it affects the LTV. If it does, then you may not get the same rate (or offer at all if you are on 90% LTV) if it doesn't effect the LTV then you should be fine.

SmashedAvacado

you could ask the seller for an allowance on completion in respect of the roof - if the lender agrees, this will in effect be like a cash back. It may be below the threshold of even needing reporting but would be my first choice in dealing with this. Or get the solicitor for the seller to hold the money and confirm that they will pay the builder the first 5k of any invoices presented.

foxy-stoat

I would go for option 1 - if no joy there and it was 5 figures then I would go for option 4 - a few hundred or thousand I would choose option 3 if the purchase price was low enough compared to other properties.