How long a delay to process if we need to reduce offer?

KP20

Currently in the process of buying a property, everyone is hoping for completion by end of this month. Short chain.

From the management pack, we have discovered that there's a large expense coming in the next year which will not be fully covered by the existing sinking fund. The vendors did not tell us this during the process to date, despite me asking about upcoming works. The work is not at S20 stage yet, but has been on the cards since 2016. Our solicitor has requested more information a week ago and still waiting for response to that and other final queries. We want to vendors to cover the additional cost, as the price we've offered was for (in our minds) a property in good condition, not needing a few thousand £ of work within 12-24 months. We haven't specifically raised this with them yet although I expect our questions via solicitor should make them think this is where we are headed.

From our perspective, once these final queries are answered, we should be ready to exchange. We have our mortgage in place, draft contracts ready etc. How much would renegotiating a price delay the process, and would it risk pushing it out beyond 30 September, in terms of needing to get things re-drafted? I suspect that the current vendors are delaying and hoping that it gets too late to make the change and we'll suck it up so as not to lose the £6.5K stamp duty, which is likely worth more than the upcoming expected expense. 

Any advice?

csgohan4

Do you have a plan B if the vendor refuses?, if the price is reduced, the mortgage offer will need to be  resubmitted which will take a period of time. 

If the upcoming expense is around 6k, that's not too bad. I was expecting 20k for a new roof which is far bigger

Depends on how much you can swallow. 

No harm in asking. 

KP20

It is a new roof but shared among a lot of flats so individual cost should (!) be less than £6K. Waiting on updated info from mgmt co. or vendors to confirm expected costs.

Plan B? Not sure yet... just frustration at this point to be openly misled and makes you wonder what else may have been 'forgotten' in discussions so far.

csgohan4

KP20 said:

It is a new roof but shared among a lot of flats so individual cost should (!) be less than £6K. Waiting on updated info from mgmt co. or vendors to confirm expected costs.

Plan B? Not sure yet... just frustration at this point to be openly misled and makes you wonder what else may have been 'forgotten' in discussions so far.

Which is why never trust the vendor and do your own due diligence, the vendor is not looking out for your interests. 

Anything else come up on the building survey?

lookstraightahead

Buying a leasehold or share of a freehold can get very expensive - please do your due diligence and factor it into your affordability.

is it an old property? 

KP20

csgohan4 said:

KP20 said:

It is a new roof but shared among a lot of flats so individual cost should (!) be less than £6K. Waiting on updated info from mgmt co. or vendors to confirm expected costs.

Plan B? Not sure yet... just frustration at this point to be openly misled and makes you wonder what else may have been 'forgotten' in discussions so far.

Which is why never trust the vendor and do your own due diligence, the vendor is not looking out for your interests. 

Anything else come up on the building survey?

Nothing else in the survey. Even the roof wasn't picked up, all usual wiggle words used like 'survey conducted on dry day, can't tell if there are leaks, can't access top of building' 

I guess it's let's see what happens next.  

csgohan4

KP20 said:

csgohan4 said:

KP20 said:

It is a new roof but shared among a lot of flats so individual cost should (!) be less than £6K. Waiting on updated info from mgmt co. or vendors to confirm expected costs.

Plan B? Not sure yet... just frustration at this point to be openly misled and makes you wonder what else may have been 'forgotten' in discussions so far.

Which is why never trust the vendor and do your own due diligence, the vendor is not looking out for your interests. 

Anything else come up on the building survey?

Nothing else in the survey. Even the roof wasn't picked up, all usual wiggle words used like 'survey conducted on dry day, can't tell if there are leaks, can't access top of building' 

I guess it's let's see what happens next.  

Which is why it was picked up by your solicitor/you requesting management packs due to diligence.

I doubt the vendor would want to pay for something they would not benefit. Hopefully you will get some discount

AdrianC

Best case: The vendor says "yes" immediately, and the mortgage offer is reissued without delay. Days.

If you're looking at £6,500 SDLT pre-end-Sept, then you're looking at a £380k purchase.

You'd jeopardise that over 1.5%?

KP20

AdrianC said:

Best case: The vendor says "yes" immediately, and the mortgage offer is reissued without delay. Days.

If you're looking at £6,500 SDLT pre-end-Sept, then you're looking at a £380k purchase.

You'd jeopardise that over 1.5%?

I wasn't quite correct with the figure, I'm thinking about the difference between the £125K and £250K threshold for the 5% = £6250

Tiglet2

When you buy a leasehold property, there will always be ongoing maintenance.  At the moment no Section 20 Notices have been issued, so the vendors didn't really need to reveal any upcoming works, because at the moment it is still at the early stages.  The Management Pack would reveal any plans for future major works, as it has done in your case.  This is what you are paying your solicitor for.

The vendor will not get the benefit of this work, but you will.  Yet the vendor has been contributing to the sinking fund.  The sinking fund will cover some/most of the costs for the roof and anything more will be requested from all the leaseholders in the block.  The vendor will not get a refund from the sinking fund on their moving out day, so I'm confused as to why you think they should pay for the works that they will not benefit from.

While you may have offered based on the property being in good condition, you do have to consider that properties are only in good condition when they are being maintained and in a leasehold property it is the job of the management company/freeholder to keep the property in good condition, to collect the service charges to pay for general maintenance and to issue S20 Notices for any major works in the pipeline.  The sinking fund is also a safety net for some of the works, to keep the larger contributions more manageable.  

If you want to complete by the end of the month, a price renegotiation at this stage will most certainly delay matters.  Your mortgage offer will need amending and the contract and transfer will also need amending and sent out for signature.  If a price reduction alters the loan to value, the lender may wish to issue a new mortgage offer.

No harm in asking of course, but be prepared for the vendor to say no.

KP20

Thanks everyone. Looks like no harm in asking the question and wait and see. 

Will update later if I remember to come back to this thread.