Retention

I have come across a couple of instances of retention recently and thought that it might be an opportunity to the run the rule over this little spanner that the lenders have thrown at you.

A retention is an amount of money held back by the lender because the surveyor has found some essential repairs that need dealt with. It is deducted from the loan amount!

The first inkling that you may have that a retention is on the horizon is when you examine the Home Report. To find the retention, scroll down to the actual survey report prepared by the surveyors which is found at the end of the survey part of the Home Report. There will be a box for "Comments for Solicitors" and it is likely that the rention will be detailed there.

The retention will identify the defect and likely cost for rectification. This amount will be held back by the lender until the works are completed. Normally what happens is that after the date of entry the works are instructed by the purchaser. The surveyor goes out to re-inspect after the works have been completed and will then write to the lender to say that the work has been completed satisfactorily. The retention is then sent to the either the purchasers or more likely their solicitor. If you are lucky then you may get the retention payment before you have to pay the contractor.

You may be able to get the retention reduced if you can supply a specific quote to rectify the defect but there is no guarantee that the lender will agree to this. It's worth a shot though if the retention is eye watering. It won't be the first time that a surveyor has over egged a retention.

Big drawback with a retention is that it comes straight off the loan amount. You will have to make sure that you do your sums to ensure that you have enough in the kitty. Best do this before you make the offer, after all you don't want to leave yourself short!

Get in touch if you need any advice.