My surveyor has put a retention on the property value

Answer

This is a way of saying he or she believes the property is worth £X but would not recommend the bank lends all of this until a particular problem, say the damp, is checked.

The amount he is suggesting gets held back is known as the "retention" but it is not meant to suggest that this is how much any suspected works will cost - it is a usually a much larger amount to cover all eventualities.

So lets take an example where you have offered £200,000 for a house. The surveyor has said he agrees the property is worth £200,000 but he has placed a £40,000 retention on the valuation until the roof is checked out by a specialist.

£40,000 is, in this situation, probably double the cost of a new roof but as the surveyor is not a roofer he can't be accurate and so needs to go high on the retention - a kind of "just in case and then some".

You'll need to organize for a roofer to go round and give their take. They might say (and they often do) everything is fine. They might punt for a bit of work because ... well its a roofing company.

You then send the roofers report to the surveyor and he removes the retention.

On the other hand if the roofer says the current roof has come to the end of its natural life and a new one is needed for £20,000 you can go to the vendor and say "I didn't know about this" and you can see of there is space to renegotiate.

At the same time you forward the report to the surveyor who changes the retention to the real figure of £20,000.

All being well you renegotiate the buying price to £180,000 or somewhere close (remember roofs generally need major work every 20 years so the vendor might not be willing to help you fund all the work!) and you have a survey valuation that will allow you to buy the property.

To find out more about how to handle retentions pick up a copy of my ebook How to Really Buy a Property.

For more information read the section on retentions in What A Property Survey Really Means.

Search Results for 'retention' in
How to Really Buy a Property

"... surveyor may decide that the property is worth the money you are prepared to pay as long as he can be sure that a certain issue is not going to be a major problem. He may, for example, believe the roof is at the end of its natural life and will need to be replaced. This could cost over £10,000 and may affect the property value. He will therefore place a retention on the value. This may say, "I agree the property is worth £250,000 once the roof has been checked. Until this has been done I am not convinced the property is worth more than..."

"... types of survey and which ones are worth the cost; Why surveyors should never estimate the cost of potential works; Why retentions don't suggest the cost of repairs; The difference between rising damp and penetrating damp; How to check more than a structural survey covers and pay..."
"... on flats generally annoys the vendor who knows they can probably sell to someone else a little less awkward or a little less naive. - retentions in a Survey - If the surveyor, carrying out any of the above surveys, believes the property is worth the price you have agreed to pay for it all is..."
"... retention can be a small amount or the total price agreed (usually in the case of suspected subsidence or other major structural issues). The best way to deal with them is as described in the remainder of this chapter. Take them in your stride, in most cases the issue is much smaller than the surveyor believes and retentions are removed after investigation of the..."
"... and Nicki had successfully offered on a two bedroom lower ground floor garden flat just off Islington Green in London. They had seen no end of properties and although this one was above their original budget they stretched to afford it. They then cut costs by going with a lender that had the lowest fees. The surveyor that looked at the property was a self employed individual who agreed that the property was worth £240,000 (their offer) but said £5,000 should be held back as a retention because of damp in the..."

Search Results for 'retention' in
Property FAQ

Search Results for 'retention' in
Property Terminology