Buyer requesting cash to exchange

diystarter7

It is your choice if to accept in full/part or not at all. It is your property and it is your choice.
Personally, if I was in your position, I let them 200 quid of goodwill and if they were not happy,
I'd resell even if it meant losinng more than the 2.5k they are asking

Have you checked yourself and if there is a problem get a quote and if you wish to base your counteroffer on that but if there is no real problem, tell them no and stick to it

movilogo

Whether to agree on and the amount is your personal choice.

But don't accept any cash exchange. Usually it is normal for some cash refund via solicitor on completion. This is to expedite the process as any formal price reduction means mortgage offer needs to be re-issued which would take weeks. 

saajan_12

Debbie030873 said:

Hello, 

Selling my house, I'm not buying and purchaser renting so no chain. 

Accepted offer 21/7/22
Signed my contract 7/10/22
Buyer has viewed 3 times, one with a builder for works they want to do and a further 2 to look and then measure up. All accompanied by estate agent with my authorisation. Property is empty as previously tenanted but they vacated on offer acceptance. Estate agent allowed a viewing 7 days ago without my knowledge and when queried apologised saying they assumed they could go in as property empty... - what's wrong with them allowing access especially as there's no inconvenience to you. If they had asked, why wouldn't your answer have been "yes of course, whatever is best to progress the sale"? 

Yesterday buyers announced they had found damp patch at last weeks viewing and wanted to visit again with builder today. They have now demanded i pay them direct £2.5k on exchange and before completion for the sale to go through. - so for you its essentially a 2.5k reduction in the purchase price and possibly less cash flow between exchange & completion. Do you want to agree to a reduction? Do you know if there is damp / what it would cost? 

Questions;

Is this legal? - in principle, you can pay money to whoever in whatever form. However the implication of cash is the money won't be declared to other bodies eg taxman, lender, EA, etc. In this direction, you wouldn't really be benefitting from declaring a higher sale price, so any possible penalties are for the buyer. Their lender made an LTV offer based on £X value, and its really being sold for £X - 2.5k. 

Is the estate agent at fault for letting them in without my knowledge? - no, they're trying to progress the sale. This visit might have lead to the damp finding, but without that they might have just pulled out.  

What would you do?  -allow the builder visit, and at the same time try to find out for yourself whether there is damp and what it would cost to remedy (has it caused an issue in the years you've lived there?). Then decide on whether you want to agree to a £2.5k reduction. If no, then refuse and call their bluff. If yes, then suggest they go through solicitors, if they really push back then on your side you could meet in the EA office on exchange day, each speak to your respective solicitors to give the exchange go ahead and hand over the £2.5k at the same time. 

Thanks
Debbie 

Comments in line.. 
1) Forget about the EA giving access, their job is to progress the sale and its reasonable to think that includes giving access to interested buyers especially when it doens't actually inconvenience you. 
2) Decide whether you want to agree to a £2.5k reduction at all (before getting into the details of how it'll work)
3) Only if yes, then there are ways to exchange, and the concerns about it being cash are more for the buyer than you. 

eddddy

warwick2001 said:

This is actually a fairly common and straight forward legal process. It's called an 'Allowance', and as others have stated, it allows the sale to go through with the agreed financial figures (mortgages, deposits etc), but takes into account any re-negotiations during the sale process. 

I did one when I was selling my house last year, I had my solicitor write into the contract that I would give £5k to repair a wall (fit cavity trays and re-render) upon completion. 

Out of interest - did you have to provide evidence to the lender that repairs were required, and/or give an undertaking that you would spend the £5k on repairs?

Also, were you wanting a high LTV mortgage and/or were you at the LTV limit?


It seems a bit too easy to disguise a "vendor gifted deposit" (which a mortgage lender wouldn't allow) as an "allowance".

For example...

I want to buy a property worth about £300k with a 90% mortgage (so that's a £270k mortgage) - but I don't have a £30k deposit. So I do a deal with the vendor that they'll give me a £15k allowance (for imaginary repairs). So now I only need the £15k deposit.

sidneyvic

Would you have refused another viewing, probably not, so why complain.
You have a choice, either cough up or risk losing your seller. Good luck remarketing in todays market, you will get off very lightly with just a 2.5k reduction.

Schwarzwald

warwick2001 said:

This is actually a fairly common and straight forward legal process. It's called an 'Allowance', and as others have stated, it allows the sale to go through with the agreed financial figures (mortgages, deposits etc), but takes into account any re-negotiations during the sale process. 

I did one when I was selling my house last year, I had my solicitor write into the contract that I would give £5k to repair a wall (fit cavity trays and re-render) upon completion. The sale actually fell through (for other reasons), but the actual allowance process is legit. HOWEVER do not do this without involving the solicitors. As others have said, you can be right royally shafted if it's not written into the contracts.

Out of interest, why don’t you have to declare the Allowance to your mortgage lender?
the allowance obv reduces the effective purchase price and if the mortgage lender lends on an LTV basis, they would like to know if the agreed price/value of the property changes as it effectively increases the LTV, potentially beyond the max % LTV rate the lender is willing to lend, dont they?

thanks

Schwarzwald

sidneyvic said:

Would you have refused another viewing, probably not, so why complain.
You have a choice, either cough up or risk losing your seller. Good luck remarketing in todays market, you will get off very lightly with just a 2.5k reduction.

Agree with this. You can be a bit annoyed at the EA and also state in writing to them that they made a mistake and you dont generally consent to viewings without being asked prior, but you are mostly annoyed by the buyer’s request not the fact that the EA granted access…

user1977

Schwarzwald said:

warwick2001 said:

This is actually a fairly common and straight forward legal process. It's called an 'Allowance', and as others have stated, it allows the sale to go through with the agreed financial figures (mortgages, deposits etc), but takes into account any re-negotiations during the sale process. 

I did one when I was selling my house last year, I had my solicitor write into the contract that I would give £5k to repair a wall (fit cavity trays and re-render) upon completion. The sale actually fell through (for other reasons), but the actual allowance process is legit. HOWEVER do not do this without involving the solicitors. As others have said, you can be right royally shafted if it's not written into the contracts.

Out of interest, why don’t you have to declare the Allowance to your mortgage lender?

Generally, you do, but they might specify a de minimus limit under which they don't need notified.