Trusting the seller to pay up

Hannimal

Hello friends. I am very close to exchange & completion with my purchase. However, a blip came up in the survey and it'll cost £5000 to fix up based on quote. We agreed with the seller that they'd pay £2000 on completion and I'd cover rest. Happy days. 

I spoke with my mortgage broker on Friday and I've learnt that in any way they gift the £2200 it will have to go through my mortgage lender if goes through the solicitor. My mortgage lender has a massive wait (taking 4-6 weeks atm) when it comes to dealing with this kind of stuff. The seller says they'll withdraw the offer if it takes a month to complete and they'll stay put instead. Further, it would make me ineligible for the mortgage I am going for as I am sitting just at 20% deposit (it's platform if you're wondering, I've spoken with my advisor at length). 

The seller is now suggesting that I just trust them and on completion they'll transfer me £2200. Do I have any rights if they do not live up to their word? They've been a bit awkward about a few things (like I said, they threatened to pull their offer) so I am not 100% comfortable just trusting them. I don't know what other options I've got.

I haven't been able to get through to my solicitor all day today or Friday but I'll try again tomorrow.

davidmcn

Hannimal said:

Do I have any rights if they do not live up to their word?

No. Because it won't be in the contract, which is where it should be. So you'll have to hand over the full price, and they can waltz off into the sunset denying all knowledge about a cashback being agreed.

Would also arguably constitute mortgage fraud if you're choosing not to disclose the true net price to your lender.

greatcrested

No rights and no guarantee.

Your solicitor will tell you to amend your offer.

Tell you what - ask the sellers to transfer the money to me. I'll hold onto it and if the sale falls through, return it to the seller. If the sale Completes, I'll pass it to you.

Deal?

Hannimal

Thanks for your helpful comments but is there any way of actually receiving this help toward the repair costs? Can the builder charge a part of it to the seller directly? Or can the seller pay for the repairs and I pay them in some way? I'd imagine that this is quite a common problem as lots of people go through this.

To be clear, we weren't renegging the price, we agreed to go halfsies with repair costs. This is different. 

greatcrested

Seller could agree to pay builder. Builder may not agree, since if payment is not made, he'll have to chase someone living elswhere who has no vested interest in the job. Plus you'd have no contract with builder, so if anything went wrong you'd have no come-back (and seller would not be interested).

Seller could pay builder up front, but we all know what happens when builders get paid in advance.......

You could ask your solicitor (or seller's solicitor) to hold the money (in the way I tongue-in-cheek suggested above), but I suspect they'd only agree if the purchase price was amended to accurately reflected your payment, which is what you are trying to avoid.

Hannimal

There is a builder that is known to the seller so he might agree - but then he isn't known to me so he might just leg it with the money... although the builder would only be paid less than half of the job upfront so might be keen to complete given how much they rely on reviews. This builder (or roofer actually) has also done the roofs on two adjacent properties and one other one on the street, so sounds like a reliable guy... but then I don't personally know him.

Hannimal

Seriously though, how would it work paying the builder? Could the seller just pay their share toward repairs on said property upfront, and then I'd commission them to do the job later and pay the rest? Why does it all have to be so bloody hard.

My sister had a buyer agree to buy her house last week and their completion date is 21st September, delayed to end of month because my sister is also buying a house. In other countries it's not such a hassle!

NameUnavailable

Speak to your solicitor. I think they can agree with the vendors solicitors to a retention upon completion (at the agreed purchase price) so they effectively hold back £2K rather than paying in full and then the vendor returning £2K.

getmore4less

NameUnavailable said:

Speak to your solicitor. I think they can agree with the vendors solicitors to a retention upon completion (at the agreed purchase price) so they effectively hold back £2K rather than paying in full and then the vendor returning £2K.

maybe you missed this bit.

I spoke with my mortgage broker on Friday and I've learnt that in any way they gift the £2200 it will have to go through my mortgage lender if goes through the solicitor. My mortgage lender has a massive wait (taking 4-6 weeks atm) when it comes to dealing with this kind of stuff. The seller says they'll withdraw the offer if it takes a month to complete and they'll stay put instead.

Scotbot

Ask the seller to pay you directly upfront  before exchange without involving solicitors. Will the seller really pull out of a sale that they have agreed to? If they do they will almost certainly have to pay the agent fees (unless it's an online agency in which case they already have) and they will definitely have to pay solicitor  fees.  Pulling out will cost them more than you at this stage.

This doesn't get round the issue of mortgage fraud but unlikely the lender will find out. 

AdrianC

getmore4less said:

NameUnavailable said:

Speak to your solicitor. I think they can agree with the vendors solicitors to a retention upon completion (at the agreed purchase price) so they effectively hold back £2K rather than paying in full and then the vendor returning £2K.

maybe you missed this bit.

I spoke with my mortgage broker on Friday and I've learnt that in any way they gift the £2200 it will have to go through my mortgage lender if goes through the solicitor. My mortgage lender has a massive wait (taking 4-6 weeks atm) when it comes to dealing with this kind of stuff. The seller says they'll withdraw the offer if it takes a month to complete and they'll stay put instead.

Well, yes.

It's either a formal part of the purchase contract - in which case your solicitor and lender need to be party to it, because the solicitor negotiates the contract and it's fundamental to the lender's lending decision... - or it's just a simple informal cash gift, in which case there's no way of binding anybody to anything.

Trust them or formalise it.