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100% Retention Of Mortgage Funds


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#1 6538

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Posted 15 May 2008 - 09:58 AM

Just had a call from my mortgage person regarding a flat I'm buying. The lender had their survey done last week which reccomended a 2K retention for some improvement works to be carried out.

The lender, however, has said that they will only proceed on the basis of a 100% retention!!!

From my point of view this is a very good thing.

Firstly; I can use it as a barganing tool to hammer the price down significantly - not a bad thing in todays market.

Secondly; it means that I can get all the work sorted - the entire renovation - between exchange and completion and get the place back on the market before I have to stump up a single penny in deposit or finance expenses.

Jittery times have their advantages, it seems.

#2 Guest_DissipatedYouthIsValuable_*

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Posted 15 May 2008 - 10:12 AM

Just had a call from my mortgage person regarding a flat I'm buying. The lender had their survey done last week which reccomended a 2K retention for some improvement works to be carried out.

The lender, however, has said that they will only proceed on the basis of a 100% retention!!!

From my point of view this is a very good thing.

Firstly; I can use it as a barganing tool to hammer the price down significantly - not a bad thing in todays market.

Secondly; it means that I can get all the work sorted - the entire renovation - between exchange and completion and get the place back on the market before I have to stump up a single penny in deposit or finance expenses.

Jittery times have their advantages, it seems.


You'd still be a plonker to buy a depreciating asset with leverage though.

#3 thecrashingisles

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Posted 15 May 2008 - 10:16 AM

Secondly; it means that I can get all the work sorted - the entire renovation - between exchange and completion and get the place back on the market before I have to stump up a single penny in deposit or finance expenses.


Are you mad?

#4 Chimpy

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Posted 15 May 2008 - 10:18 AM

Are you mad?



This person has to be crazy !!
What goes up, must come down !!


#5 6538

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Posted 15 May 2008 - 10:21 AM

You'd still be a plonker to buy a depreciating asset with leverage though.


Depends what I'm paying for it though.

#6 Guest_DissipatedYouthIsValuable_*

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Posted 15 May 2008 - 10:34 AM

Depends what I'm paying for it though.


It's probably still too much.

#7 laurejon

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Posted 15 May 2008 - 10:35 AM

Just had a call from my mortgage person regarding a flat I'm buying. The lender had their survey done last week which reccomended a 2K retention for some improvement works to be carried out.

The lender, however, has said that they will only proceed on the basis of a 100% retention!!!

From my point of view this is a very good thing.

Firstly; I can use it as a barganing tool to hammer the price down significantly - not a bad thing in todays market.

Secondly; it means that I can get all the work sorted - the entire renovation - between exchange and completion and get the place back on the market before I have to stump up a single penny in deposit or finance expenses.

Jittery times have their advantages, it seems.



#8 laurejon

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Posted 15 May 2008 - 10:36 AM

Do you honestly think a vendor is going to allow access to a builder before any money has changed hands ?

#9 6538

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Posted 15 May 2008 - 10:39 AM

It's probably still too much.


A big assumption on your part.

#10 6538

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Posted 15 May 2008 - 10:43 AM

Do you honestly think a vendor is going to allow access to a builder before any money has changed hands ?


Of course they will. It happens all the time; I've done it before with stuff I've both bought and sold.

You weren't paying attention to the detail of my original post. I said that the work would be done "between exchange and completion" . If we have exchanged then the seller is protected because I can be forced to complete. Even if I don't, what's the worst case scenario for the vendor? He gets his old and dated flat renovated for free and still has the opportunity to sue me if my builders f*ck things up.

Edited by 6538, 15 May 2008 - 10:45 AM.


#11 Guest_DissipatedYouthIsValuable_*

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Posted 15 May 2008 - 10:48 AM

A big assumption on your part.


Give us some numbers, details and locations then.

#12 laurejon

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Posted 15 May 2008 - 10:54 AM

Of course they will. It happens all the time; I've done it before with stuff I've both bought and sold.

You weren't paying attention to the detail of my original post. I said that the work would be done "between exchange and completion" . If we have exchanged then the seller is protected because I can be forced to complete. Even if I don't, what's the worst case scenario for the vendor? He gets his old and dated flat renovated for free and still has the opportunity to sue me if my builders f*ck things up.



You have possession and have not paid a bean, he in the meantime is commited to purchase elsewhere and has no funds to complete the purchase.

I have been asked many times if access can be had prior to completion to carry out work and I have always said no, show me the colour of your money.

If you can get away with it I would be suprised, his current lender would whip his ars3 if he handed over possession without any money changing hands.

#13 6538

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Posted 15 May 2008 - 11:09 AM

You have possession and have not paid a bean, he in the meantime is commited to purchase elsewhere and has no funds to complete the purchase.

I have been asked many times if access can be had prior to completion to carry out work and I have always said no, show me the colour of your money.

If you can get away with it I would be suprised, his current lender would whip his ars3 if he handed over possession without any money changing hands.


Assumptions, assumptions, assumptions. People on here are good at that.

How do you know the vendor is comitted to a purchase elsewhere? How do you know there is a current lender involved? Besides, if there were, how do you know his current lender hasn't agreed, especially if the property is in such a bad condition as to be unsaleable/unmortgageable.

As for being in possession without having paid anything - so what? You are under contract and a completion date is specified in said contract. If you don't complete you can be quite easily forced to by the seller, regardless of how badly you may have shagged up his property. Alternatively, you can be sued by him. That's the whole point of being under contract.

As I've said already, this is not so unusual and I have done it several times before, both selling and buying. A common reason would be that a property has no bathroom or kitchen, or mains services, so cannot be mortgaged.

#14 The Conveyancer

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Posted 15 May 2008 - 11:49 AM

Assumptions, assumptions, assumptions. People on here are good at that.

How do you know the vendor is comitted to a purchase elsewhere? How do you know there is a current lender involved? Besides, if there were, how do you know his current lender hasn't agreed, especially if the property is in such a bad condition as to be unsaleable/unmortgageable.

As for being in possession without having paid anything - so what? You are under contract and a completion date is specified in said contract. If you don't complete you can be quite easily forced to by the seller, regardless of how badly you may have shagged up his property. Alternatively, you can be sued by him. That's the whole point of being under contract.

As I've said already, this is not so unusual and I have done it several times before, both selling and buying. A common reason would be that a property has no bathroom or kitchen, or mains services, so cannot be mortgaged.



YEP - Access undertaking - not that rare at all.

#15 Telometer

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Posted 15 May 2008 - 11:53 AM

If you don't complete you can be quite easily forced to by the seller, regardless of how badly you may have shagged up his property. Alternatively, you can be sued by him. That's the whole point of being under contract.


All these things are true, but are only any good if you have any assets. Otherwise, he is stuck with the 10% deposit you have paid, and maybe a flat with no roof.

I think I'd want more than 10% deposit were I vendor. But of course it depends on how desperate V is.




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