How to pay for work after bad survey when getting mortgage??

Itsokaytonotbeokay

Hi. This is my first time posting, but read this forum a lot - just really struggling to find anything about this other than one single web page which doesn’t really talk about this explicitly.

We’re buying our first house. We absolutely love it, however it definitely needs a lot of work but will be doing most of this one room at a time and bit by bit as we get the money.

After making our offer (ended up paying the asking price after our lower offer was not accepted), we have been told by the vendor that the boiler doesn’t work and have also found from our electrical survey that the whole house will need rewiring and upgrading. Our full building survey has been put on hold whilst we and the vendor get quotes for this (as we asked if they would be willing to renegotiate on price taking into consideration the work that needs doing before we could move in - they haven’t officially said yes but have asked us to get quotes so we’re hopeful...).

My main question is; whatever the amount is for the work that needs doing (this is likely to be a minimum of 5k but may end up in excess of 10k thinking about what the building survey might bring up and also thinking that the central heating system might need more than just the boiler replacing)... how does this work normally get paid for when someone is house buying with a mortgage? Is it the case that you can only move into a house that needs work if you already have enough additional money to pay for it all? The only thing I can find online regarding this suggests that if we renegotiate the price, our mortgage offer will be reduced accordingly to reflect the new value and thus we still would not have the cash to pay for the work (we’d just get a bit of extra in terms of the reduction we’d get in the deposit - nowhere near the amount we’d need).

I realise one option is getting the vendor to do the works and keeping the offer as is, however, we would much prefer to be able to sort this ourselves as then we’d have some ownership over the work. We are willing to pay for some, and want this to be where we both give a little, we just need to figure out how we could make that work financially as we don’t fully understand.

Hope I’ve explained myself well enough, sorry if it’s just waffle.

This is feeling very scary for both of us as we do really want the house, but at the same time, we can’t buy it if we need to spend all of our money just making it habitable (and even that probably wouldn’t cover it! It’s old and has been empty for a few years and we suspect there will be further issues that will come up, especially with damp and maybe some with the roof 😫).

Thank you for your time. I look forward to hearing back from anyone who can help shed some light on this. We know this must happen a lot!

Thanks again,

Jo

macman

No vendor is going to rewire and replace the boiler in the hope that you still want to buy it when the work is done. Just negotiate the price accordingly.
You obviously need a working boiler, but a rewire doesn't need to be done immediately unless it's dangerous. All it needs to do is comply with the regs at the date of install-they're not retrospective.Many homes need a new CU and additional sockets after a couple of decades.
When you become a homeowner, you really need to have an emergency fund of say £1,000 minimum to cover things like boiler breakdowns and other inevitable maintenance issues. Other improvements you can do as time and income permits. No house you purchase will be fault and maintenance free-that's the difference to renting. £5-10K is a small budget for what you describe. The boiler and rewire alone will cost c. £5K, and a rewire also means redecoration throughout, unless you DIY it.

Sibz

Rewiring is a massive job. Replacing a boiler isn't a small one either.

You could look into the Energy Savings Trust - you may qualify for help with a new boiler, they also do interest free loans so you can pay it up over a few years.

Speak to a financial advisor for advice re mortgage and funds for home improvements. There are usually a few options. The building survey will give you a clearer idea of what needs doing and how critical it is. That's where you'd start your negotiation - as from that you can figure out roughly what you''ll need to spend to live in it.

Itsokaytonotbeokay

Thank you for your time and response! So are you saying our only option is to renegotiate as they wouldn’t pay for any work that needs doing? (We wouldn’t expect them to pay the whole costs, just share it as it’s a big cost and was not known when we made the offer). I guess we’re both just speculating and don’t know what they’d be willing to do. The question is if they do just renegotiate, is there a way this can come from the mortgage amount we are borrowing or would we have to use our own additional cash?

The wiring is dangerous unfortunately and had been messed with. I’m not sure what your reference is to regarding the emergency funding? We are buying our first home and are looking to do a lot of work. We do have some money for this to get started and will be keeping 6 months wages aside just in case. Our question isn’t about finances in itself, it’s about how people generally pay for work after a renegotiation as now we would be getting less money from the bank, the seller will have reduced accordingly yet we wouldn’t have that cash. If this is in excess of 10k, we will have used most of the money we were planning to use on getting the house into a livable state. Have you experienced a similar situation?

Thanks again, really appreciate your time!

Itsokaytonotbeokay

Thanks (sorry I’m new to this and not sure if I’m responding to posts like I’m trying to!).

Sounds like I’ll just have to be patient and wait until Monday when we can speak to our mortgage broker who should know what we do in this situation. I’m just being impatient! Really helpful advice, thank you. Have you ever experienced a lender working something out like this with regards to urgent works needing doing?

Thank you, really appreciate your time and help

Itsokaytonotbeokay

*By 6 months wages I didn’t actually mean our wages for 6 months >.< But enough money to cover us for 6 months if worst came to worst and we both ended up unemployed! I should go to bed... lol

anselld

Itsokaytonotbeokay wrote: »

Our question isn’t about finances in itself, it’s about how people generally pay for work after a renegotiation as now we would be getting less money from the bank, the seller will have reduced accordingly yet we wouldn’t have that cash. If this is in excess of 10k, we will have used most of the money we were planning to use on getting the house into a livable state. Have you experienced a similar situation?

This is why people on a limited budget cannot generally afford a "fixer-upper", or if they do then they will do rennovations gradually over time as funds permit.

It must already be habitable; a mortgage would not be granted at all if it was uninhabitable. You need to look very carefully at the survey and look beyond the normal surveyor doom-mongering and make a plan to do only the essentials immediately.

AdrianC

Itsokaytonotbeokay wrote: »

After making our offer (ended up paying the asking price after our lower offer was not accepted), we have been told by the vendor that the boiler doesn’t work

Worst case - a couple of grand to replace it. The "big names" are expensive, but offer finance.


You can probably get by for a while - there's a myriad of ways of heating water, even if there's no hot water cylinder with an immersion. Heating's easy so long as there's electricity, and the weather will be well on the way to warming up before you move in anyway. It might be inconvenient, it might not be cheap.

and have also found from our electrical survey that the whole house will need rewiring and upgrading.

NEED? Or simply doesn't meet current building regs?

how does this work normally get paid for when someone is house buying with a mortgage?

You pay for it. Whether you do the work now, or you limp through a year or two saving up, is another question. How you pay for it is another question.

Is it the case that you can only move into a house that needs work if you already have enough additional money to pay for it all?

So long as the lender don't believe the house unmortgageable because it's not habitable, so are willing to lend you the money, you can move in.

It’s old and has been empty for a few years and we suspect there will be further issues that will come up

You knew this when you viewed it and placed the offer, right...? So the chances of the vendor accepting renegotiation are slim.

You buy a "fixer-upper", you expect to have to fix things. Fixing things on houses costs money.

Hectors_House

It’s to be assumed the seller hasn’t done the works you mention (boiler, rewire) because they either can’t afford it or inherited the place and are looking to sell it on.

I bought my house knowing it had been trashed by the previous owner (it was a repossession) so went in hard when we negotiated and knocked the price down significantly. The kitchen had been ripped out and holes smashed through walls big enough to walk through but the survey came back saying the essentials like the roof and windows had been replaced recently so we went ahead.

It was six months before we could move in and we had to forego buying the furniture we had wanted to put a new central heating system in.

Rewiring and boiler replacement are to be expected in an older property to be fair. It’s the issues with the roof that would be the sticking point for me.

If your survey comes back saying the roof needs work that would be my point for negotiating down the price (I walked away from one house when the surveyor estimated £25,000 worth of work needed doing on the roof and the seller wouldn’t lower their price).

Good luck with it and I hope you manage to get it at a price that reflects the condition of it.