Buying a house with structural problem

[ryanaw]

Thanks everyone - good advice there.

The property is around the £750k mark, so as someone said - even £50k underpinning is not a huge percentage of the value.

As I see it, there's a few options here:

1. We're upfront with the movement issues - get the current owners to make a claim on their insurance to fix everything. Transfer the policy to us and continue with exchange/completion. Propose a small price reduction to cover the inconvenience and possible issues with resale.

2. Ask for a large reduction - say £50k - get all of the work done when we move in, don't mention anything to the lender or insurance company and hope it doesn't get any worse. If it does, risk the fact that the insurers might not pay out and we'd need to fund repairs ourselves.

3. Walk away and keep looking


Couple of questions:

- Currently our solicitor doesn't know about the survey results - maybe we keep it that way, as am I right in thinking they have a duty to tell the lender?

- If we do negotiate a discount, is there a way of doing it without telling the lender - i.e. get them to forward the full amount and ask the vendor to refund the agreed reduction?

So confusing..

 

[KenGMac]

ryanaw, Hi again.

My gut reaction is to walk away?

From an Insurance aspect, there a Multitude of potential minefields, and despite what joe90 has posted, if at some time in the future there is a total loss, my example was a Gas Explosion, it may be a Gas Explosion in the adjacent property that causes your home to require to be demolished and re-built, for Joe90 there are several other scenarios that can occasion what the insurer call a "total loss"

From an Insurance aspect, going forward, there are several things you should be aware of as regards insurance "background checks"

When you apply for Insurance Cover, the handler punches in your post code and as My previous post this so called "Q" Check will indicate to the original call handler what possibility there is of Subsidence / Flooding, ET-ALL, that information will dictate the premium you have to pay to obtain Insurance?

What will happen in your case depends on your Answers to these type of Questions, your answers are then sent to underwriting and they will start to ask Questions, you will not believe just how risk averse these people are? I know first hand as I work as an Insurance Risk Surveyor.

Going back a bit, in my original post, and above I mentioned "Experian" and "Q" checks, there is yet another face that "Experian" provide, that is, Every insurance Claim intimated. "Registered" with all of the major Insurers is logged with Experian, this to prevent Multiple Insurance Claims for one event [that is another post] The handler or Underwriting will interrogate "Experian" siting your post Code and House Number, this will reveal any and ALL Insurance claims made by the owner of that Exact property, as above this "Function" is in place so that one owner who may have two Insurance Policies in place, with "obviously" two different Insurers can NOT make two Insurance Claims to two different Insurers then taking a so called "Cash Settlement" undertake the repair work with one load of funds and pocket the other? Yes this scenario has occurred historically and is On-Going, by the way if detected will possibly result in a jail term depending on the value obtained Illegally? It is regarded as Fraud!

Even a simple claim for "Storm Damage" to lets say a chimney head? the claimant is stating the 70+ MPH Gale that happened 4 Days ago has removed an area of Roughcast render from My Chimney. Fine, on the face of it a possible "Storm Insurance Claim" Historically I have seen hundreds of such claims, I get back to the office / home, I work from home, and I go on-to Google, Street View? why because when I locate the property lo-and -behold the same damage as I have a digital image of was present up to 3/4/5 years ago? in such scenarios the claim is declined.

What I am banging on about here is a simple fact, DO NOT MESS WITH YOUR INSURER" If it comes to a "Total Loss" and the Insurer does an in-depth Investigation, and for whatever reason can void the claim, especially a large loss, they will void the claim, you are not paid out, you are on your own

As previously, this is the way all insurers operate, BUT it at times, depending on which Insurer we are discussing it gets vastly more complex, one policy Issued by a Company will cover something a different Policy issued by the same company will not cover an Identical Incident.

Welcome to the world of Insurance [you still here Joe90? care to Advise?]

Ken

 

[SJRSJR]

A lovely but rundown detached house next to me came on the market and was going for a song because it had major cracks and was unmortgageable. Most people ran for the hills but developers were interested in demolishing it and putting two properties on the site. I was keen that didn't happen so I considered taking it on as an investment. I was aware that once the word subsidence had reared its head, insurance premiums would go through the roof and future buyers would be deterred even if it had been fixed. I spoke to a helpful insurance company who told me that if there had never been any previous subsidence claim (there hadn't) then it would not appear on any database. They also said the wording of the subsidence question varies from insurer to insurer and it was possible to answer honestly and not be penalised. In the end it came down to sealed bids between me and another buyer who also wanted to restore as a family home. I'm a bit risk-averse so I low balled the offer and lost. In the meantime the new owner has set about renovating it. The subsidence was caused by a broken drain which has now been sorted. When it's finished he'll have made 120-150k. I half regret not going for it but at least the house has been preserved and I've got a nice neighbour.

Your sellers may be worried they have an unsellable house and will be willing to negotiate. Living there while it's being sorted might be problematic too so factor in the cost of alternative accommodation if you can. In the end it'll come down to your own attitude to risk. Good luck.