Another thread about foam insulation

SnowWhiterThanWhite

My Son is a FTB & found a 2 bed semi bungalow, his deposit is approx 20% of the property price.

The seller has already advised the loft has spray foam insulation, this was already in situ when they purchased the property 20+ years ago & they have no paperwork pertaining to the insulation.

I gather that a mortgage is not possible due to the foam. The seller, so I've been told, is not in a position to have the foam removed.

From research I've done, the cost of removal is around 5k however, until a survey has been done, we don't know if any further damage has occurred, obviously, worse case scenario is a new roof.

I have 2 thoughts,

1. I keep hearing that lenders may just do a desk top or drive-by valuation, if this is the case, the insulation won't be flagged & hopefully, the mortgage will be agreed. How likely is this?
2. We are considering a cash purchase, the idea being, we put the cash up, the property will be in Sons name, solicitor to draw up a private loan agreement, we will remove the foam, get the required certificates & son will then apply for a mortgage to repay us.

Either way, we will ask for a reduction in the sale price, even though the property has already been 'priced accordingly '

The property is approx 35 years old & being marketed as a cash only sale (due to the foam issue) i dont know as yet if the foam is open or closed cell.

Does anyone have any advice or been in a similar position?

eddddy

SnowWhiterThanWhite said

The seller, so I've been told, is not in a position to have the foam removed.

Have you been told why?

Or, for example, does the seller mean a foam removal contractor has looked at the job and said there are problems.

Based on what you say, I'd have thought a 'rational' seller would spend £5k getting the foam removed, to make the house mortgageable, and achieve a much higher selling price.

FWIW, I know somebody who was in a similar position. As in your option 1, they actually got a mortgage offer. (They never found out whether it was because it was a desk-top valuation, or a drive-by valuation, or the mortgage valuer failed to look in the roof space.)

It was a separate RICS surveyor who alerted the buyer. The buyer told their mortgage lender, who immediately withdrew the mortgage offer.

I pretty sure that failing to tell the mortgage lender would have been a breach of the terms of the mortgage - the borrower would have signed an agreement promising to disclose this type of information.

(Actually applying for a mortgage knowing this type of info, and not disclosing it, might even cross the line into mortgage fraud.)

Jemma01

How far down is it compared to a mortgageable property? If more than 5k, I wouldn't feel easy about the purchase. There might be more damage than the seller is willing to share.

WIAWSNB

https://forums.moneysavingexpert.com/discussion/6678399/another-thread-about-foam-insulation

'The house is priced accordingly'. Is it? A property advertised as 'cash only' or 'unmortgageable' should be notably cheaper, so how does this one compare with others in the 'hood? By that I mean it should be discounted more than just the cost of making it mortgageable again. Many folk baulk at the thought of having their roof stripped, so have ruled themselves out of the buying this place from the off. And, of course, needing cash will also have excluded a significant number of folk.

So, assuming there is a bargain to be had - I mean notably beyond the ~£5k discount for having the foam removed - then proceeding with 'your' cash purchase would be the correct option of these two.

Worth doing? After a bit of due diligence, you'll hopefully know.

Asking price? 'Unaffected' asking price? Likelihood of them dropping the price further? Write these figures down.

And then get actual ballpark figures from roofing companies for both simple and more 'involved' foam removal. Ie - simple quote for stripping the roof, new felt and battens, and replacing tiles? That figure should be easy to quote with very good accuracy (I presume that's where the £5k figure came from?)

Once a co has provided the above simple quote, it should be easy for them to modify these for the event that they find X number of rotted rafters. £1k extra. £2k. Whatevs. Ie, ballparks, but still very easy to estimate for. You could even go silly - how much for a complete new roof?!

Ie - know how much this will (min), and could (max), cost.

And then add the wee bonus that the roof will then be effectively new, and have a 50+ year lifespan - always nice to know.

Any potential for a loft conversion? If so, there is likely 'no' cost for initial foam removal, so the 'discount' was all 'saving'.

And, there is no rush for doing this job, provided you are not wanting your cash loan back before then. Chances are that the roof will be perfectly fine for another decade, certainly for 5 years, and possibly forever! The quoting roofers will be able to tell if the rafters have obvious rot, and if they (as is likely) do not, then the worst case is that some roofing battens will weaken and some tiles will be lost in a storm - in which case you bring forward the roof replacement you've already budgeted for. So, if so thinks a lift conversion would be a possibility a few years down theine, then hold off until then - provided a roofer doesn't point out it's about to collapse.

Perhaps this is also a good opportunity for you/your son to knock on the neighbouring door and introduce yourselves? Explain the situation, and ask if they've also had foam carried out, and does it concern them? If they have, and would welcome the opportunity to have theirs cleared at the same time, I bet you could knock £1k off each hoodie. And your son will have a very good idea of what his new neighb is like...

sheenas

Any competent diyer would be able to remove the foam. It’s a messy job in tight conditions but not complex. PPE and a quality mask needed Thu. Once you have done that you can get the loft inspected. While you up there put some standard insulation down. Insulation these days is expensive but to costs down use a standard fibre glass type. It not itchy these days by the way.

WIAWSNB

https://forums.moneysavingexpert.com/discussion/comment/82088894#Comment_82088894

It would be interesting to know the 'removal' method quoted for. I understand it's usually by stripping off the roof covering - tiles or slates - and refelting & battening.

That effectively gives a 'new' roof, so the new owner would be better off than they were previously, even without the foam issue.

I suspect tho' - but do not know - that a mortgage co would require that level of removal?

But, yes, the main concern is to the rafters, as these are the structural parts which are vulnerable to trapped moisture and are no longer being fully ventilated. I pointed out a good while ago (DIY forum) that a 'simple' DIY method could be to slice down tight against the rafter sides using a blunt-tipped blade until the felt is reached - but not going through it. And then angled cuts to the same point from a few inches in - remove the triangular foam fillets, and the rafters should be exposed again, and happy.

sheenas

https://forums.moneysavingexpert.com/discussion/comment/82088909#Comment_82088909

The mortgage issue relates to the inability to inspect the timbers and an expensive approach would be to replace the roof on the off chance there was damaged beams. I would expect the roof replacement option to be significantly more than £5k depending on roof. Scaffolding would be required and it would put it out of the scope of a diyer. Roger bisby is a trust worthy guy who has a YouTube on this subject. He is also very approachable and help me with a few projects with advice.

SnowWhiterThanWhite

https://forums.moneysavingexpert.com/discussion/comment/82088811#Comment_82088811

Thanks. I assume the seller doesn't have funds to do this work upfront, I'm meeting the agent later this week so will add to my growing list of queries.

Who requested the RICS survey? Was it the lender or the buyer?

SnowWhiterThanWhite

@Jemma01 I would say around 15k below average for the area, there isnt a comparable property on the market in the same road but looking at sold prices on Zoopla

SnowWhiterThanWhite

@WIAWSNB Thanks for this. A company has been recommended by a friend who will undertake a free survey/quote. I'm meeting with the agent this week so will check seller is happy for me to go ahead & book this. If theres any sort of reluctance, obviously we'll walk away.

Ideally, will need the funds back sooner rather than later due to retirement, I dont think Son will be bothered about a loft conversion but good question/idea & we will look into costs etc.

SnowWhiterThanWhite

Thanks, i did see some threads on DIY removal which would be fine if there not a mortgage but, I understand that as soon as a lender gets wind that there was previously foam applied, they will need to see evidence that it was removed correctly with the necessary certificates etc