Lender asking for remedial works before offer is made?

hannah2283

Hi,
Wonder if anyone has been in this situation? Am a FTB buying a mid terraced house, my application is with HSBC, LTV 75%. The valuation was done at £0 but if remedial works are carried out, it would be worth what I offered for it. HSBC are saying that they want the remedial works done before the offer is made. Has anyone been in this situation before? In my head my options are a) ask the seller to pay (this surely would come up with any buyer, excluding a cash buyer, so it's in their interests to do it anyway) and up my offer to asking price (only £3k above what I offered), b) meet them halfway on the offer price (so I add half the value of the works on to my offer) c) run away from this purchase d) find another lender that aren't HSBC (my broker doesn't think that this will help).
My worry is whether the work will be to HSBC's standards. HSBC also want a damp and timber report which I'm happy to pay for, but surely this should be done after the work is done to show it's all in good nick?
Any thoughts or experiences would be very welcome.
Thanks

fiision2020

If HSBC want the remedial work to be carried out before an offer is made then I would suggest asking the vendor to get the work carried out. As you said this would likely affect any potential buyer so its in the vendor's interest to get the work done. If they refuse you could offer to meet them half way depending upon how much you want the property. Personally I would not want to pay money to fix someone's else house unless there was an agreement in place that they were not going to sell to someone else. It would have been easier if HSBC had put a retention on the mortgage then you could negotiate a lower price to cover the cost of the work and then got the work done yourself..........to your own property. I would ask HSBC if there any conditions such as who can carry out the work?  

hannah2283

Thanks, that's really helpful. I'll check with the broker whether they have an approved list of people to carry the work out - I hadn't actually thought of that. I've left a message with the agent so hopefully I can get this moving. The work itself probably isn't going to take ages (it's a small house, with a small bit of damp) but it's just a hold up that I'm not keen on!

fiision2020

I understand your frustration. The guy that did my timber and damp report told me the report would be finished by Friday then that was changed to the weekend; Monday at the latest. I called him this afternoon at 4pm and he has not even started it. Its driving me nuts. I still have to forward the report to the lender and wait until they have spoken with the valuer before making a decision. I realise that lenders want to minimise their risk but its potentially £2000-£2500 worth of work. Its equally frustrating when many people are getting offers after just a few weeks of getting an AIP.

hannah2283

fiision2020 said:

I understand your frustration. The guy that did my timber and damp report told me the report would be finished by Friday then that was changed to the weekend; Monday at the latest. I called him this afternoon at 4pm and he has not even started it. Its driving me nuts. I still have to forward the report to the lender and wait until they have spoken with the valuer before making a decision. I realise that lenders want to minimise their risk but its potentially £2000-£2500 worth of work. Its equally frustrating when many people are getting offers after just a few weeks of getting an AIP.

Yeah. I feel your pain. Going to speak to the agent tomorrow and then hopefully get the ball rolling. Good luck. 

hannah2283

spoke to EA. they are sorting the reports for me which I should have back next week. both the surveyor and the EA have said that this is all quite odd of HSBC - normally the reports and quotes for work are enough for the lender, not the whole "get the works done first". am going to speak to the EA broker as well, as my current broker doesn't seem to think there's a way out (have asked about changing lender, had initially said that the HB report would be enough, then the reports would be needed, and now the full works need to be done.)

fiision2020

Have you spoken with the vendor? Are they are aware of your situation? They might be willing to get the work done or meet you half way?

hannah2283

I haven't. EA was adamant that HSBC are being tricksy. Surveyor said the same thing. Seems they think there's a way round it.