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Can we prepay for the rewire of our property prior to a house sale

dave.wheeler1
Posts: 4 Newbie
Hi,
Our house is currently on the market and some first time buyers are interested. They have advised that they like the house but it is in need of a full rewire. (It is). They are unable to afford the cost of the rewire as they dont have the cash flow so cannot simply deduct the cost of the rewire into an offer.
However, we CAN afford the rewire but are not in a practical position to carry out the work prior to the sale (baby, toddler, life!). We want to be able to form an agreement where we get a quote for the work and either pre pay it or agree to pay for it following the move? Can we include a cash payment or something into the deal for the work to be carried out?
Apologies if this is a standard thing, I can't find any information about it on the internet...
Any advice appreciated
Our house is currently on the market and some first time buyers are interested. They have advised that they like the house but it is in need of a full rewire. (It is). They are unable to afford the cost of the rewire as they dont have the cash flow so cannot simply deduct the cost of the rewire into an offer.
However, we CAN afford the rewire but are not in a practical position to carry out the work prior to the sale (baby, toddler, life!). We want to be able to form an agreement where we get a quote for the work and either pre pay it or agree to pay for it following the move? Can we include a cash payment or something into the deal for the work to be carried out?
Apologies if this is a standard thing, I can't find any information about it on the internet...
Any advice appreciated
0
Comments
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Yes you can offer to do this.
Is the cost of the re-wire less than the deposit they are going to pay you on completion? As, rather than them sending you the deposit and you sending them money back, you could just accept a lower deposit amount (assuming you don't need it for your chain).
Alternatively, you could book an electrician with a date in the future (after completion) and just pay for the works in advance and let the buyer know what date the work will take place on.0 -
The solicitors can arrange a 'retention'.
i.e. The buyer's solicitor keeps back an agreed amount from purchase money, and the solicitor uses it to pay the electricians bill.0 -
Thank you for your prompt response - it is appreciated :beer:
I wasn't aware they would send us a deposit at any point during the sale? At what point do we receive and return that??
If we paid in advance for the electrician would that need to be worked into the sales contract? This seems the easiest option? However, who is the contract with for the electrician work - us as the payers or the new owners as the owner of the property? I don't want to be in the position of chasing up the electrician to complete the work or if it is an unsatisfactory job etc?0 -
Thank you, however I don't quite understand. How do we provide the money for that as the seller?0
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Buyers send you money via the solicitor. the solicitor only gives you the sale price minus the agreed amount.
I would get quotes and agree with the buyers what a reasonable sum would be then get the retention for that amount. if they decide to go over the top with gadgets and other expensive additions you only pay the agreed price and not the increased price.Those who risk nothing, Do nothing, achieve nothing, become nothingMFW #63 £0/£5000 -
I think this makes sense. so they would get the mortgage for example:
We would agree to sell the house for 200K but they would retain 5K of the pament and only transfer 195K.
But, crucially, there mortgage is for the value of 200K, thus they get the 5K cash to use for the work required?
Have I got that right? Would their lender not be able to turn round and say that the deal is for 195K and thus only lend up to that value?
Thank you by the way...0 -
Honestly I don't know but I would think the retention money is held at your solicitors end and not the buyers end. As you're getting 200k but leaving 5k aside for repairs.
I would guess the buyers are FTB's buying on the 90/95% limit of there mortgage so don't have room to drop the deposit amount down to cover the cost themselves even if you reduce the price.Those who risk nothing, Do nothing, achieve nothing, become nothingMFW #63 £0/£5000 -
dave.wheeler1 wrote: »They are unable to afford the cost of the rewire as they dont have the cash flow so cannot simply deduct the cost of the rewire into an offer.0
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Personally I would just find a new buyer. Why don’t you lower the price by 5k and remarket?? Will this be taken off the price if so is this stamp duty avoidance?
Can I sell my house £100k less as I am prepaying my buyer for full renovation?0 -
This sounds to me like a linked contract.
The buyer's lender would need to be informed by their (and the buyer's) solicitor.
It could affect SDLT.
If you pay the sparkie in advance, the contract would be btweteen you and sparkie (not the buyer). What if the sparkie renagued? delayed? Buyer could not enforce so would have to rely on you to chase the sparkie - as a buyer I'd not want that risk.
Retention is possible, but see SDLT and lender agreement above.
Not sure how reducing the (mortgage, not Exchange) deposit would work. It would have to be written into the contract and effectively reduces the purchase price. Again, mortgage lender would have to agree.
Yur solicitor should advise on this, but to me it all sounds too complex to be worth the hassle.....0
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