Post House Survey Negotiations

Leesy7

We have just had an offer accepted on a home and had a survey commissioned.

The survey has flagged up a few issues that would require rectification, although nothing extreme that would affect the value of the property. We could reduce the amount of money we have offered to allow for repairs but in reality that money would not actually be ours in cash as our deposit would not drastically change.

What is the legalities around completing the sale with an agreement (via our solicitors) that the vendor then returns some of the sale money to allow us to complete repairs? Obviously i understand that this wouldn't work if we were attempting to inflate the property price or something but would it be possible to do this to cover minor repairs (around 5K)?

Any advice or experience with this would be great

Thanks,

housebuyer143

Leesy7 said:

We have just had an offer accepted on a home and had a survey commissioned.

The survey has flagged up a few issues that would require rectification, although nothing extreme that would affect the value of the property. We could reduce the amount of money we have offered to allow for repairs but in reality that money would not actually be ours in cash as our deposit would not drastically change.

What is the legalities around completing the sale with an agreement (via our solicitors) that the vendor then returns some of the sale money to allow us to complete repairs? Obviously i understand that this wouldn't work if we were attempting to inflate the property price or something but would it be possible to do this to cover minor repairs (around 5K)?

Any advice or experience with this would be great

Thanks,

No, a small amount might be able to be paid to your solicitor via the sellers solicitor on completion, but not after the fact and anything like £5k is likely to be flagged as it's basically lowering the price unofficially. 
Do it officially or don't. No lawyer is likely to agree to this..

Leesy7

housebuyer143 said:

Leesy7 said:

We have just had an offer accepted on a home and had a survey commissioned.

The survey has flagged up a few issues that would require rectification, although nothing extreme that would affect the value of the property. We could reduce the amount of money we have offered to allow for repairs but in reality that money would not actually be ours in cash as our deposit would not drastically change.

What is the legalities around completing the sale with an agreement (via our solicitors) that the vendor then returns some of the sale money to allow us to complete repairs? Obviously i understand that this wouldn't work if we were attempting to inflate the property price or something but would it be possible to do this to cover minor repairs (around 5K)?

Any advice or experience with this would be great

Thanks,

No, a small amount might be able to be paid to your solicitor via the sellers solicitor on completion, but not after the fact and anything like £5k is likely to be flagged as it's basically lowering the price unofficially. 
Do it officially or don't. No lawyer is likely to agree to this..

Thank you, that makes sense but I was unsure if there was any sort of mechanism i.e some kind of repair credit

mi-key

If it doesn't effect the value of the property, why are you expecting the seller to pay for it?

If the things that need doing are non urgent, and just normal small things flagged by the survey then it would be more normal for you to pay for these things once you actually own the house. Surveys normally show some things that will need fixing at some point, but they aren't really a reason to reduce the price you have offered.

propertyrental

One aspect of surveys is to flag up major issues that might affect the value of the property, or which might be so vital and urgent as to require immediate unplanned extra costs by the buyer.

But the main purpose of surveys is to educate a buyer into the construction and maintenance of the property, and to perhaps offer a list of jobs the buyer might need or want to do eg

* jobs needed straight away (or wanted)
* jobs to consider within 6 months
* jobs when money time is avalable
* jobs to consider depending on preference

The survey has flagged up a few issues that would require rectification

Like.........?

Noneforit999

Can you note reduce your deposit a little to cover the works needed?

MobileSaver

Leesy7 said:

nothing extreme that would affect the value of the property. We could reduce the amount of money we have offered to allow for repairs

I'm confused, if there's nothing that affects the value of the property then why would you reduce the amount of money you have offered?

Leesy7

MobileSaver said:

Leesy7 said:

nothing extreme that would affect the value of the property. We could reduce the amount of money we have offered to allow for repairs

I'm confused, if there's nothing that affects the value of the property then why would you reduce the amount of money you have offered?

I have worded it badly, there is rectification work that requires completing immediately (some structural, woodworm, chimney work) but the overall costs of repairs won't be extreme. I don't see an issue in reducing the amount offered given this, my question was whether there is a mechanism for the cost of repairs to be sorted via some kind of repair credit rather than reducing the amount offered. It doesn't seem that is possible so that is perfectly fine

warwick2001

Actually, you can do this. Its what's known as an 'allowance' and it's all perfectly legal. And I know this, because I did it with my house sale just under a year ago.

I wrote about it in this thread  Buyer requesting cash to exchange — MoneySavingExpert Forum (end post on page 1, few questions on page 2)

There were some follow up questions, which tbh I didn't notice/answer as I didn't go back to the thread. And I'm not gonna answer them here either, as 1. I don't know the answers, and 2. Its something for you and your solicitor to sort as I have no legal understanding of how they work in regards mortgage lenders etc. 

I am not advising you to do this, all I am saying is that I did, and it worked out fine for me, as the seller. It might not be want you want/what the seller is prepared to do. Speak to your solicitor first if its something that might be possible for your situation.

user1977

It's "legal" (most ways of doing things are, no matter how bizarre!) but only to the extent that your mortgage lender allows - it would be restricted to a relatively modest amount, otherwise they're going to treat it as a reduction in the price, which is effectively what it is.

But surely the first question is whether the seller is willing to agree to it at all?

warwick2001

user1977 said:

It's "legal" (most ways of doing things are, no matter how bizarre!) but only to the extent that your mortgage lender allows - it would be restricted to a relatively modest amount, otherwise they're going to treat it as a reduction in the price, which is effectively what it is.

But surely the first question is whether the seller is willing to agree to it at all?

Yup, its the seller that needs to agree. If he/she doesn't, then its all moot.

In regards the amount, the OP is talking about £5k (the same as what I allowed). I accepted an offer for £120k. So, and I presume my solicitor followed all the guidelines in regards lender limits etc. a 4.16% allowance was acceptable.