Survey issues- what would you do?

[Paranormalbouquet]

We are sale agreed on a beautiful Edwardian leasehold flat in London, marketed as newly renovated.

Our home buyers survey has just come back suggesting that there is numerous structural issues including the roof, the water pipes and the newly built extension. It suggests that the property is worth very significantly less than we have offered (£80k less, £140k less than asking).

We have arranged to speak with surveyors and will go back with a builder if the vendors allow but realistically can’t imagine they’ll be in a position to reduce the price so much.

My concern is that a lot of corners may have been cut on the renovation. Has anyone been in this position? Would you renegotiate or cut and run?!

Personally I would run before you start racking up costs and the inevitable happens anyway.

I take it your a cash buyer or would have the funds available to bridge any gap in the valuation?

Not a cash buyer, first time buyers but it’s an expensive flat. I’m just so upset, the market is completely stagnant here, there’s very little on the market and we are pretty tied to the area as children in school here.

Have you seen all the Building Regs certificates?

Solicitor is on the case now.

I would also cut and run - sounds like a mare.

What have they actually said? Surveyors reports can read a bit doom and gloom if you've never read one before, particularly on a older property.

But the drop in value isn't sounding great.

Run away.
There must be a good chance lender will kill this deal anyway.

It’s the drop in value that concerns me the most to be honest. They say that the water system is at the end of its life and requires replacing, that the roof of an older extension needs replacement and that extensive work is required to the back wall of the property and that the new extension is insufficiently weatherproofed. I don’t know if it’s surveyor doom and gloom but the fact that they have said it’s worth significantly less is worrying me. As well as the fact that as a leaseholder the freeholder could charge a large fee for repairs.

I work with surveyors. In giving you prices we go off price books eg: what it should cost to fix. The reality is in some cases it can cost much more.
If it is a flat lease and the problems are external then it's a shared cost between leaseholder therefore you won't have to bear the bulk of it. Internal issues will come down to you. Go back and try negotiate With the vendors - you likely won't get the entire amount off however if you get a portion of your costs off that will still be good, as not all issues will need to be dealt with immediately

That said if you are getting 80k off already then I wouldn't hold my hopes up as to extra discount: that sounds fine as it is and it would sound like you expected a lot of issues with it already.

I would run if it was a house
Being a flat I wouldn't think twice... as you say the works are not in your control, will have hefty kick back charges to the freeholder

Stanski we weren’t anticipating problems, simply that the original price was wildly optimistic. The price bracket here is £800k+ so the offer was less than 8% off asking, which we thought was fair for a newly renovated flat.

A house in the area is not in our price range. And there is very little on the market- we have been searching a long time.

You also consider what the place will be worth if/when you have to sell and it has continued to deteriorate.

If you've had a valuation with the homebuyers then negotiate according to valuation.

I suppose my worries are that the freeholder could refuse to do any repairs, or could charge us a huge amount for any- we would have no control over this and it’s very difficult to get a quote for this.

Back out! Has your mortgage company completed their valuation? They might refuse to lend.

Mortgage company have signed off on it. I know it seems a no brainer, just we really really need a place to move and there’s very little on the market in our price bracket now. I really could cry.

Which is better for you - the temporary disappointment at losing the property, or the ongoing regret of living in a home with serious problems and the worry of ever being able to sell it.
You would never be happy there.

I know, just very upsetting being nearly 40, with children, on a good salary and still renting! Going to speak with surveyor and solicitor later so will have more information then.